Managing a Profitable Medical Practice

Editor’s Note: This is an excerpt from The Business Side of Rheumatology Practice, Chapter 5: Managing the Practice.

Managing a medical practice isn’t easy. Besides providing high-quality care for the patients you see every day, you also have four very important management functions: planning, organizing, leading, and controlling.

You plan during the development of goals and strategies; organize by making and finalizing decisions about where, when, and by whom each job will be performed; lead by keeping your staff motivated, supporting your staff’s ideas, and giving clear directions and expectations to staff; and control by observing and keeping track of all progress towards goals, striving for performance improvement, and making positive changes where necessary.

Managing a profitable practice also involves implementing and analyzing policies and processes that direct business and clinical operations, and finding ways to improve them. You can avoid major process malfunctions by creating and maintaining official, written processes that will develop and differentiate the practice. These processes act as guidelines that a practice can use to attract new patients, better existing relationships and provide consistent high-quality services. As the practice owner, you and your practice manager can set standards and communicate properly with staff in order to keep the practice running smoothly with the use of established processes.

Key categories of processes that form a medical practice include, but are not limited to:

• Personnel;
• Medical records;
• Ancillary test reporting;
• Financial management;
• Appointment scheduling;
• Patient clinical care;
• Risk management and quality-improvement materials management;
• Information systems;
• Compliance;
• Patient communication and access;
• Medical staff management;
• Office management;
• Central billing office/billing and collections department;
• Facilities or satellite offices (if the practice has more than one); and
• Marketing management.

The use of technology in practice can serve to attract and retain patients as well as lead to more efficient workflow. Many different systems are available and offer a sort of “medical office in a box” approach to technology, but taking a gradual approach is often more appropriate for a small practice with a tight budget. Interoperability, or hardware compatibility, is the key when using this tactic. Creating a customized system as opposed to buying from a single vendor can keep the practice from being locked into high-cost service contracts and expensive systems that do not quite perform as they need to. Identify what is required of the practice’s hardware and software and find computers, scanners, printers, an external hard drive, telephone, cell phone, PDA, paper shredder, and system backup to fulfill these needs.

Key clinical and administrative information technology systems include:

• Electronic health records;
• Electronic prescribing;
• Practice management system; and
• Website.

Making the decision to manage a practice does not come lightly. There are a multitude of risks involved, and day-to-day operations must be handled carefully. Managing a practice is an ongoing business—although there can be a lot of burnout with micromanaging, you must keep in mind that no one will care for your business as much as you do.

For long-term success, be an effective leader and manage according to the needs of the practice. There are many resources that are available to physicians on proper management of a business. Now more than ever, it is important for you and your managers to examine specific areas of your practice to measure its profitability and understand your practice’s position, identify irregularities, and guide future decisions.

Practices can increase profitability through education and hands-on training. The ACR Practice Management department provides a wealth of valuable tools on the ACR website to assist with both office and clinical support.

From letter templates and clinical forms to coding information and audit services, start with www.rheumatology.org/practice when you have a practice management question.