Leaving a Multi-Specialty Group to Start My Own Practice

When I finished my residency in Pediatrics in 1992, I went to work as an associate with a large multi-specialty group. I learned a lot about taking care of patients in an outpatient setting but I was an employee of the group and had no control over my hours or staff or coworkers and I had no input in making practice policies. After I started there, the partners had sold their interests to a management company and signed non-compete agreements. After I had been there for 2 years, I was offered a partnership but would have had to sign a non-compete. I was reluctant to do that without looking at the management structure of the group. What I found was that the management group was in charge of all financial decisions such as salaries and wages, overhead and operating expenses. There was no incentive for them to watch expenses because all of these things (including their salaries) were paid first. The physicians got paid whatever was left over but had no opportunity to have any impact on reducing expenses.

I made the decision to leave the group and start my own practice. I have never regretted that decision because I have control over my own hours, my colleagues, my work environment and how I practice medicine. I love being my own boss, especially now that I am able to be in partnership with Wincy, a doctor who I chose to work with and with whom I work really well. However, that does not mean that I did not hit a lot of stumbling blocks along the way.

Let me start by saying I could have dedicated hours and hours to reviewing contracts, analyzing expenses and setting employee policy, but I had two kids and a husband at home. Building a patient base and providing exceptional care were my focuses and the other aspects of the business were in place, but got very little attention from me.

Administration

My first issue was in the area of office administration. A friend of mine told me it was essential in opening an office to find an office manager who was really, really good. That was great advice but he could not tell me how or where to find this person. Instead, I served as my own office manager and tried to handle everything myself. I would see patients during the day and stay late one night a week to handle administrative issues like payroll, paying bills, checking bank statements, etc. That meant, first, that I was working a lot of hours every week; second, that my employees did not have the benefit of any supervision during the day because I was seeing patients; and, finally, that there was not enough time in one evening for me to handle everything so some things just did not get done.

About 10 months after I opened my office, I had to have surgery and was out of the office for a few weeks. Fortunately for me and the office, my attorney husband, Richard, had decided to close his law practice and pursue other interests so he stepped in and began handling the office administration while I was out. When he took over he began to take steps to increase our revenues like improving our contracts with insurance companies and making sure our receptionist collected co-pays from all of our patients, including the ones she was friends with. He also started finding ways to cut expenses, like changing the type of bank account to significantly reduce bank fees. Having someone with the time dedicated to scrutinizing our revenues and expenses has made a huge difference.

Billing

My second issue was billing. I did not have any billing experience when I opened my office so I signed up with a billing company that was recommended to me. They were paid according to what they collected so they spent all of their time on tasks with the highest return on effort. They posted charges and sent out claims and recorded payments that came back in the mail. After quite a few months, I was reviewing an aging report and saw that we had a lot of current charges and a whole lot of over 120 days charges. We learned that when the insurance company did not pay a charge, the billing company just left it on the books without making any attempt to pursue the unpaid charge. One month I complained about the large amount of uncollected charges in the over 120 day column and the next month I got a beautiful aging report with no old charges on it. They had not collected any of it, they had simply written it off. When I asked for records of what they had done, they brought us a stack of boxes with all EOBs from the past 8 or 10 months in no particular order.

After we fired the billing company, we began looking through the records and found that they had not refiled any unpaid claims with the insurance companies and they had never sent a single patient bill for things that were charged to deductible or were not covered expenses. Richard took over our billing and began to organize procedures for following up on unpaid charges and patient balances. Again, having someone with the time dedicated to scrutinizing our billing practices has made a huge difference.

Staff and HR Concerns

My last issue has been supervision and management of personnel. As our office has grown, hiring and supervising front and back office personnel became a much bigger job. We eventually did hire someone to serve as office manager, at least insofar as employee supervision was concerned. Like many offices, our office manager was a medical assistant who was smart and experienced and got promoted to a management role. We have had two office managers and they have both done a good job but not as good a job as they are capable of doing with some training in management skills. Like most offices, maintaining the level of customer service we want to see as well as keeping a positive team attitude among all of the staff is a challenge.

Again, fortunately for my office and for me, a few months ago my daughter Emily decided to relocate to Dallas. She earned her MBA from Yale and had been working as part of the Key Management Group at Target. She has been working with our staff to implement policies that are improving our customer service skills and improving our office efficiency and environment. Perhaps more importantly, she has been working with our office manager to help her develop management skills that can maximize her performance and turn her into that really, really good office manager we need. Having someone scrutinizing our personnel issues is making a huge difference.

Having an independent medical office is challenging but I highly recommend it. Wincy and I both really enjoy the autonomy we have in our practice, but so many small practices fail. We are really fortunate that we have had the help that we need to make our office not only sustainable but actually quite profitable. That is a direct result of the procedures Richard has instituted and his constant monitoring to make sure we are on track.

Wincy and I are very interested in seeing other independent practices succeed. We have been able to share our experiences and insights with other physicians thinking of establishing a private practice as well as help established practices become more successful. With the expertise of Richard and Emily, we are able to reach more practices and be the group dedicated to the business aspect of running a practice.

If you have any questions or want to talk with me about a decision you are trying to make, please feel free to reach out to me at sue@altussolutionsgroup.com.