MGMA Insights: Building Effective Administrative Structures in Medical Practices
Download MP3Hey, everyone. This is Daniel Williams, senior editor at MGMA, host of the MGMA podcast network. I am here today with Dawn Plustidge. She's an MGMA consultant, and she's exploring the ideas of medical practice operations, administrative structures in those practices, and a lot of other issues related to medical practice operations. Dawn, welcome.
Daniel Williams:Good to see you again. Thank
Dawn Plested:you so much. Thanks for having me. I'm very excited to talk about this topic. Very, very relevant, very important to what we do. So thanks again for having me.
Daniel Williams:You got it. So we've got a lot of questions. We're gonna try to get through these as in as thorough and as complete a fashion as we can. So the first question I have for you is what is the importance of administrative structures in a medical practice, and how does it relate to the advanced strategy operations perspective?
Dawn Plested:Yeah. So your administrative structures are really the backbone of your medical practice. It's foundational. And I will say this, I think that so many medical schools, and this is my little soapbox, don't do a lot of training on the front end with providers on how to run their medical practice. And you have physicians who are just brilliant, excellent clinicians coming out of school or mid career looking to start their medical practice.
Dawn Plested:And there's a ton of enthusiasm around taking ownership over their care delivery model, but there's maybe not the science and attention that needs to be paid to your administrative structures. And laying those out well and thoughtfully and strategically on the front end, it's crucial for ensuring your efficient operations, that you're compliant with regulations, just general delivery of patient care to ensure that your revenues are flowing and that your expenses are managed. From an advanced strategy and operations perspective, effective administrative structures really plays a central role in aligning your goals with your functions. So it ensures that your resources are used, they're used effectively, that you're ready to adapt to change in the healthcare environment, that you can anticipate changing and moving landscape around you. Again, I say again, because I mention this every time we do one of these podcasts, but COVID had such a profound impact on the industry.
Dawn Plested:And you can really see the difference between medical practices that were ready to anticipate and pivot and move with changing and unexpected circumstances and those who weren't. And frankly, at the foundation of that is really effective administrative structures, because those are that that concept's predicated on the idea that you're ready to pivot as changes occur.
Daniel Williams:Okay. So given the idea that you are gonna make some changes there, develop the structure you want, how does leadership then contribute to shaping administrative structures in a practice? And then what are the implications of different leadership models?
Dawn Plested:Yeah. So leadership is foundational. There's a cliche that goes culture eats strategy for breakfast, and it's a age old business cliche that everybody's heard a thousand times. What that means is the culture of your organization really defines what you're going to accomplish, and your best of intentions are defined by your organizational culture. Why do I talk about culture when you ask about leadership?
Dawn Plested:Because leadership defines what your culture is going to look like. And it it has an, a profound impact on your administrative structures. You really can't build out your medical practice. That build out occurs under leadership. And there's a number of different leadership models that people have heard of.
Dawn Plested:You have servant leadership. You have the classic authoritative leadership or hierarchical leadership. You have transformative leadership. There's rule by committee. There's a number of different leadership styles, and that impacts your decision making, communication.
Dawn Plested:It can impact the patient engagement and experience, employee engagement, patient satisfaction. It will very much have an impact on your ability to pivot. Back to what we talked about in the previous question, if you're not a nimble organization, first of all, I ask, why are you an independent practice who is not a nimble organization? You should be able to move. You're not, in theory, bogged down by bureaucratic layers that you can see in these larger Byzantine systems.
Dawn Plested:And so one but but with that said, you have to have your administrative structures correctly in place, and that will come to a leadership style. And I do wanna say within that leadership style, there there are a number of different styles that I just listed out that can be effective at different times and in different circumstances. But I think throughout, you really have to have the ability to trust and delegate to your employees and have the structures in place from an administrative perspective that allow you to have the confidence that there are guardrails up and that you can release some some of that control to the folks you work with. Otherwise, you won't have that ability to pivot and be nimble.
Daniel Williams:All right, Dawn. What factors then should be considered when choosing the appropriate organizational structure? I know you talked about some of the different ones. What are those factors then that you're looking for?
Dawn Plested:Yeah. So in terms of your org structure, first of all, there are a number of different types, you know, that you'll have varying degrees of control over. You're gonna have everything from a solo practice, group practices, partnerships, hospitals, ownership models, integrated health systems, for profit structures, telehealth companies.
Daniel Williams:And
Dawn Plested:really, of course, now we're seeing, and I'm getting a little far afield in terms of org structure, but I think it makes a difference. You see these kind of alternative healthcare environments such as CVS or Rite Aid, some of the pharmacies are getting into it for a little while there. Amazon was giving it their best shot. And those would of course change your org structures. But your traditional ones are really your solo practitioner, your partnerships, your group practice, your hospital employed model, and your integrated health system.
Dawn Plested:In terms of if the sky's the limit, if you get to decide what your practice looks like, what you really want to consider is a number of different factors in determining what that org structure should be and what makes sense for you. You're going to want to consider what your own goals are, what type of medicine you want to practice, what amount of autonomy, and in coupling with that autonomy, what amount of responsibility you want to have over the business functions of your practice. You're going to want to consider the size of practice you want to have as well as the size of the patient population you want to serve. You're going to think about your specialization, any kind of regulations, both locally at the state level, at the federal level. And so I think those are your primary factors that really should play into what that organizational structure looks like.
Daniel Williams:Thanks for that, Dawn. So next issue I want to talk about here in relation to organizational structures is related to staffing considerations. So when you're developing that structure, what strategic staffing considerations should be taken into account and base those on patient volume, services offered, and any other factors as well?
Dawn Plested:Yeah, so staffing, the million dollar question. This is something that practices really need to pay close attention to. I recently did a session, a podcast session, and we touched on staffing and just the challenges involved in that. And I'll say this. There's a couple reasons, well, few reasons why I would say that this is so important to your strategy.
Dawn Plested:And number one is because staff tends to be one of the larger costs to a medical practice, Ensuring that you have the staff that you need doing the roles that they need to be doing is critical. And you also need to make sure that you have the budget to cover that and that you're allowing and allocating the resources needed to support your staff and to support the size of the staff that you need. I think the other reason it's such a large area of concern is because staff can be very highly specialized depending on the role that they're going to fit for your organization. So having a handle on who you need and what you need them to do is key. And then recruitment can take, can be very all consuming.
Dawn Plested:So that's a very, that's a very big consideration. And then of course, the elephant in the room, which is the staffing shortage we've experienced, particularly since COVID. The burnout levels in healthcare are just extraordinary and have been extraordinary in recent years. And that really just leads to a vacuum of availability in your labor pool. And so you need to be very strategic about this.
Dawn Plested:As you mentioned, looking at it through the lens of that patient volume, the services that you're looking to offer, you need to think through strategies for recruitment. That should play into your strategic planning process. That should be part of your long range work that you're doing as you build out your staffing model. And you need to be thoughtful about both recruitment, but also retention. You really want to make sure your compensation packages are competitive.
Dawn Plested:You want to invest in your staff, help have them feel and sense and understand the growth opportunities for their career. And provide ways for staff to develop within your own organization. Nobody wants to work the same job indefinitely and really with no hope of career advancement or growth or additional challenges. You want to really think about your training. I see training as being an area that a number of practices skimp on.
Dawn Plested:And I can't tell you the number of times that I have been called in to do an operational assessment for an organization. I go to their varying departments, and what I find is you have some people who are doing everything perfectly, fantastically. They could write a textbook on it. But you have other people just doing it ridiculously. And it's a completely nonstandard process, and it's because there's no standardization in the training.
Dawn Plested:Start with documenting your training processes, your expectations, have a standard operating procedure, and then get serious about training. Just because you've got this person over here who's doing everything perfectly and can write a textbook on it actually doesn't mean that they can train. It's a skill. Teaching other individuals how to do the work is a skill. So really investing in that training goes hand in hand with your staff development.
Dawn Plested:Then I would also say when you're thinking about your staffing, culture is just a huge part of that. We see with the younger generation that they want a purpose driven work. They want purpose driven work. They want to feel that they are making a difference with what they do. And that needs to just here's the good news.
Dawn Plested:Healthcare is a fantastic place to provide purpose driven work. We are not pushing pencil sales here. We are saving people's lives, and we have a huge opportunity to impact people's health in such a positive way. There can be nothing more meaningful. But we can lose sight of that pretty darn quick if we're not very thoughtful about the culture we're trying to build.
Dawn Plested:So you really want to work on that culture of patient care, having that mission, that vision, that clarity of your values and your purposeful driven work. And then foster, build a positive work environment. So you're working on patient driven work. It doesn't have to be grueling. It can, we can have fun.
Dawn Plested:We can care about each other. We spend more time with our coworkers than we do with our families in a lot of cases. And you should like the people you work with. Build an environment where it's enjoyable to be around each other. It's enjoyable to spend time together.
Dawn Plested:I think that's very critical when you think through your staffing structures.
Daniel Williams:Okay. Another key aspect in any structure is what the health information system looks like. So talk about that. Walk us through that process. What are the key considerations for implementing EHRs, practice management systems, whatever else or whatever other platforms you may need in that practice?
Dawn Plested:Yeah. So, you know, your tech tools have an opportunity to be one of the biggest time savers and cost savers for your practice, and they have the potential to be one of the most costly soul sucking components of your practice. It really is that important. I really, so I will say this. I think the tools available to us today are just extraordinary.
Dawn Plested:The list goes on and on in terms of what you can automate. The question that you always need to start with is, what do we need? And then you really, at the front end, need to employ so much due diligence in a review of the technology tools that you're considering. There is no end of vendors who will promise you the moon. You really have to dive deep to figure out can they deliver?
Dawn Plested:And not everybody can. And I'm here to tell you that can be soul crushing, as a small practice or a practice startup. But quite frankly, at any level, if your EHR is not effective, not effectively aligned with your other technology pieces, not user friendly, it is just going to be such a resource and time drain for your practice. It just there can be I can think of few things that would have a more negative impact on your practice than that. And so one thing that I do want to say is a potential risk area that I see for a number of practices is they either seem to focus really heavily on if the EHR is a clinical fit for the physicians, or they're heavily focused on does it do what needs to be done on the revenue cycle side of the ledger.
Dawn Plested:It is not an eitheror proposition. You really need to make sure that you have an EHR and you have the tools and technology, so a practice management system, payment management system, that can handle both sides of the practice, because one without the other is not effective. And there is a balance to be struck. I have never met yet a doctor who wants more clicks in their EHR. And I get it.
Dawn Plested:But some clicks are going to be necessary to ensure that your billing is happening in a timely and efficient and effective manner. And so you need to find what's going to be the most effective method to get both the revenue cycle flowing and the clinical side flowing correctly. You need to think about all sorts of things. You need to think about your patient management, data access, patient portals, of course, billing processes, scheduling. And then I strongly feel that interoperability, particularly with other tools and technology, is such a key piece.
Dawn Plested:Your EHR really needs to work and work with a lot of different tools. So while I'm not a shill for the commonly used EHRs out there, There is something to be said for working with a known vendor because the interoperability is stronger with new and incoming technologies. And again, I don't want to spend too much time on artificial intelligence and some of the additional technologies that are available. But the tools that are being made available to us are really happening at the speed of business. It's just daily, there's a new opportunity to innovate, standardize, automate different functions of the medical practice.
Dawn Plested:That is only as effective as how well those tools can integrate with your EHR.
Daniel Williams:Okay. So let's go, Dawn, to the next key aspect, one one of the building blocks of a medical practice. That is the financial management side of it. When you're building out this structure, What are the key decisions you need to make in terms of whether it's budgeting, revenue cycle management, any kind of strategies for cost optimization, revenue enhancement? Anything else you wanna share with us there?
Dawn Plested:Yeah. Financial management is probably the key part of a successful practice. And I would say maybe the most challenging part. Again, I've worked with so many amazing clinicians and physicians, But financial management isn't core learning in med school, and that's fair. And fabulous practice managers out there.
Dawn Plested:And again, a lot of focus on the patient safety and quality side of the ledger, which is incredibly important. Financial management needs to be the backbone of your practice. So let me say this. I think you need to think about your financial management in terms of revenue. So you need to start with your foundation, which is your budget.
Dawn Plested:No practice should be without a budget that's going to talk about your assets, your liabilities, your expenses, and your revenue. But layered right on top of that is your revenue cycle management. And I think that there is some confusion in practices that revenue cycle is your billing. And really, revenue cycle starts from the moment the patient makes contact all the way until you've done final collection, bill fully paid, services and clinical services completed. Every step of the way impacts your revenue cycle.
Dawn Plested:And so you really need to have a handle on that. And as mentioned before, your EHR and your practice management system has a huge impact on that revenue cycle system. Automate where you can. Standardize where you can. Make sure your training is on point and solid, consistent, and standardized.
Dawn Plested:Very key. And then look at the reports. That it's shocking the number of practices that don't have a regular mechanism in place for reviewing their reports. Look at your AR, look at your billing, look at your denials, look at your expenses, look at your revenues. Try to understand what the flow is in terms of patient volumes or services, and adjust staffing accordingly.
Dawn Plested:Make strategic decisions and make it based on solid data, which there is no data more solid than how your finances are running. Really think about strategically, consistently think about growth. Think about adding service lines. Think about how you're going to grow your practice. At no point should you grow your practice just for the sake of growing.
Dawn Plested:But at all times, you need to be considering the financial health of your practice, and growth is a very important part of that overall picture of your financial health.
Daniel Williams:Okay. Another piece of that is how do you improve patient engagement and satisfaction? And by doing that, how do you look at that, a medical practice design, so you have a patient centric administrative process that builds these out? How do you do that?
Dawn Plested:I think with all human interactions, so human centered design, that old buzzword, what's the core of it is communication. You really need to make sure, and communication is not a one way street. It's you info dumping or telling the patient what you think they need to hear. It's a two way street. And so patients really need to have a feedback loop.
Dawn Plested:They need to have a mechanism where they feel heard. And you really need to be thoughtful throughout the design of your practice operations to ensure that, listen, the patient is actually driving this show and understanding what they have to say, and this is a really key part. And you can see that being problematic in any number of levels for practices, whether there are a number of challenges in just scheduling an appointment. I've worked with practices where there will be two to three phone calls to get insurance information and patient demographics and so on and so forth, just to get the patient scheduled, to get a new patient in the system and schedule. How frustrating for the patient.
Dawn Plested:How much that must make them feel like they're not being heard or listened to or cared about. And then you see it all the time when a patient goes in to see the doctor. I understand that there is a balance and you can have patients talking to you for two hours if you let them, but a patient needs to be heard in that exam room. And there is nothing that makes them feel less heard than a doctor who bustles in and sits down at their computer and asks them a few questions and pokes a stethoscope at them and bustles out in five minutes. They want to talk about why they're there.
Dawn Plested:And so I think just ensuring that there is, again, an open door communication process. Think about all the places where there is a patient touchpoint, whether it is scheduling, whether it is within the office, whether it is follow-up with results. And think about, A, how you can streamline that information in terms of the timing to get the patient to the end result that they're looking for. And then are there multiple ways you can offer that information or that interaction to occur? Some patients, for example, on scheduling may prefer online scheduling.
Dawn Plested:Some may prefer a phone call. Some may prefer text. Figure out what the mechanisms are that you can offer multiple resources to that patient so that they can communicate in the way that feels most comfortable to them.
Daniel Williams:Okay. Time for a couple more questions then. You mentioned compliance earlier. So what are the challenges then involved in regulatory compliance, risk management in the practice? What do you set in place to mitigate those risks to make sure that you are compliant?
Dawn Plested:Compliance is a big one. And one of the bigger challenges for most practices, think very few practices can afford. Nor do they need a full time in house legal counsel. And yet regulatory has the potential to be one of the biggest hurdles facing a practice. So really, there are a number of ways to stay on top of it, but you need to start with a good compliance assessment.
Dawn Plested:Make sure that you have in place a robust policy and procedure manual, that you have an employee manual in place, that you have somebody walk through with you the HR and the OSHA needs for your practice. You want to think through what are the state and federal regulations specific to your specialty and get a handle on what those policies and procedures need to look like. Get it documented. Get it trained. Make sure that your training process with staff has a documented process to it.
Dawn Plested:So it's not a simple lunch and learn or a morning meeting, and then everybody goes on their way. Have a formal training and sign off on these important regulatory considerations. From a financial perspective, you should have a compliance manual in place. Fraud, waste, and abuse is a huge focus at the federal level. You do not want to get hung up on that.
Dawn Plested:And you really want to think about what is your risk management framework? Think about continuous quality improvement initiatives. Work to mitigate the risks by ensuring compliance, reducing errors, ongoing training. A really great resource tends to be your professional liability insurance companies. They'll provide some free training to you and your staff and help you stay on top of that.
Dawn Plested:They don't want you to get in trouble either, But don't rely solely on them. You're going to find webinars, different pieces of information. You can send a designated employee who maybe takes on your risk and safety to some smaller conferences. And make sure that you have individuals who are designated as responsible for areas of compliance so that you can ensure that you're staying on top of those things.
Daniel Williams:Okay. In the remaining time, I want to ask you one more question because you have covered so much ground here, and it's a lot for somebody to take in. So what are the some of the key lessons learned, some of the takeaways for our listeners regarding administrative structures in in a medical practice?
Dawn Plested:Yeah. I think the key that I would really share is be strategic, be thoughtful, be intentional with your design. So be strategic sounds a little broad. Set aside time annually for your strategic planning and integrate these considerations into that strategic plan. Make sure that you're adaptable.
Dawn Plested:The environment changes so quickly and there is so much data coming in that you really need to be nimble enough to pivot as needed. Keep your focus the focus. Have a handle on what your mission, your vision, your values are, and stay centered on that. Remember who it is that you're there to serve. You're there to serve the patient.
Dawn Plested:Think through the lens of your patient and what makes for good patient care. What would you want your mother, your father, your spouse, your child, yourself to experience in a similar situation and design based around that and really focus on continuous improvement. Effective leadership, financial management, technology adoption, those are critical pieces for success in the medical practice administration.
Daniel Williams:All right, Dawn, it's always great catching up with you. Thanks again for joining us on the MGMA podcast.
Dawn Plested:Thank you so much for having me. I appreciate it.
Daniel Williams:Yeah, that is going to do it for this episode of the Consultant's Corner, MGMA podcast. We've had our guests, Dawn Plusted, an MGMA consultant back on with us today, talking about administrative structures at a medical practice. We will be using this as part of a series talking with different consultants and MGMA experts and healthcare experts out there. So be on the lookout for those. And thanks for being an MGMA podcast listener.
