Are Practice Management Consultants Worth Hiring?

In the end, the practices who invest in themselves are, almost always, the top performers. You’ll see among best performing practices, that many have engaged – and continues to engage – consultants on matters that are outside their expertise.

This is a guest post from Chip Hart. Chip is a frequent contributor to PediatricInc and former co-host of the highly revered Pediatric Management Awesomecast. When Chip isn’t protecting independent pediatric practices against evil conglomerates, naysayers, and the League of Shadows, you can find him at PCC doing… something (I’ve never figured out what is it that he does at PCC, exactly). 


I will never forget the scene. I was the lonely consultant in the dark and shag-carpeted basement “conference room” of a large pediatric practice and was giving them a stern lecture about their pricing. The practice hadn’t updated its prices in years and was undoubtedly losing money. Lots of it.

Chip Hart and Brandon Betancourt
Working really, really hard.

After my explanation of RVUs and why 105% of Medicare wouldn’t cut it, the senior partner – well, the loudest one, anyway – looked me in the eye and said, “OK, that sounds smart, let’s just raise our prices.” It was the response I was hoping to get.

The youngest and newest partner jumped in quickly, “What?! How can you listen to this guy?”

Uh oh, I thought. His voice cracked, “…I’ve been telling you this same information for almost two years and he just waltzes in here and says ‘Correct your pricing.’ and you do it just like that?”

I honestly thought he was going to cry in frustration and relief. 10-minutes of back-and-forth among them ensued. I just stayed out of it. At the end of the year, the additional $250,000 they collected erased the discomfort and awkward part of the memory for them.

I didn’t forget, however. I remember sitting there thinking, “This poor practice lost hundreds of thousands of dollars simply because they were unwilling or unable to listen to themselves. They had to hear it from someone else.”

HOW DOES THIS HAPPEN?

The answer is both obvious and convoluted. I have often said that the most important and difficult task for any small business is to find and hire good people. Unquestionably, this challenge extends to the hiring of practice management consultants.

Pediatric practices successfully hire consultants all the time without a tremendous amount of consideration – realtors, attorneys, I/T – but when it comes to getting help on the inner workings of the practice, the majority of pediatric offices too reluctant to ask for help.

And when they do ask for help, it’s often ineffective.

Every practice I visit codes imperfectly, yet some practices lose tens or even hundreds of thousands of dollars a year as a result of their inability to address the problem.

Most practices could use help negotiating with insurance companies, yet remarkably few of them do. Many practices need help with a compensation model or managing a challenging partnership, yet most of them just live with the problems and hope it will go away. And so forth.

Physicians, unfortunately, are uniquely susceptible to mis-using consultants, even if it is simply to not use them enough.

You expect most vendors and consultants to try to take advantage of you – all doctors are rich, right? – while having trouble admitting that you cannot solve all of your own problems.

Combine those aversions with the impecunious nature of most pediatricians, and there is no surprise that I meet practices every week who would rather lose another $15,000 this year due to a poorly designed superbill and bad pricing than pay a consultant half that amount to fix the problems.

HOW AND WHEN DO YOU KNOW YOU NEED A CONSULTANT?

There is no magic formula, but try these parameters on for size:

  • When there is an issue that your partnership cannot resolve, or when a neutral third party can facilitate a necessary change in your practice, consider a consultant.
  • When you are not an expert in the matters that affect your practice or if there is simply another party who might be more effective and efficient at addressing the matters, consider a consultant.
  • When your practice is losing more money on an issue than it would cost you to fix, consider a consultant.
  • When the amount of money you would pay a consultant is less than the amount of money you would generate seeing patients, consider a consultant.

Those last two examples are often conjoined in a death spiral of inaction. Many of you don’t want to pay a consultant $20,000 to renegotiate a contract increase of $50,000 annually because “you can do it yourselves.”

Yet, you don’t do it. Or you start the project and sink 10, 20, 40 hours into the task – often worth more to the practice than what you would pay the consultant – and then never complete the job.

Pediatricians, as business owners, are notoriously bad at examining the return on their potential investments and usually focus far too heavily on only the costs.

Pretending to be 100% self-sufficient serves no one except, perhaps, the insurance companies. Your patients don’t benefit, your lifestyle suffers, and you leave money on the table.

HOW THEN DO YOU HIRE A PRACTICE MANAGEMENT CONSULTANT?

First, hiring a consultant involves a lot of common sense. You want a written contract that spells out the terms of your obligation.

The terms should clearly outline your expectations, identify the fundamental goal, and determine conclusion of the contract. Ultimately, it involves a relationship of trust and confirmation. Some suggestions that go beyond the generic:

1 – Pediatric practices are different, don’t let a potential consultant tell you otherwise.

Most medical practice consultants live in the Medicare world and look for “alternative income sources” that just don’t exist in pediatrics.

More importantly, the attitude and (often unspoken) philosophies of pediatric practices differ from other medical specialties. Find someone who knows pediatrics.

2 – Work with a consultant on one or more smaller projects and build up to a strong relationship.

Before you leap into that full payer-mix and negotiation mission, see how well you work together on something smaller, like simply reviewing the state of your existing contracts. If you are not getting the kind of performance you expected, better to have not committed so heavily.

3 – Don’t be afraid to use different consultants for different needs.

Just as you may not be an expert on RBRVS or pediatric compensation models, your consultant may not know it all, either.

Although some consulting resources pride themselves on their breadth of experience, depth is usually more important. A good consultant might look at your practice and identify work that needs doing. A great consultant can identify work that needs doing, but suggests another resource.

4 – Even after you have chosen a consultant, keep an eye out for conflicts of interest.

Although they are impossible to avoid and sometimes even lead to efficient work (like one consultant recommending another), conflicts are often poorly revealed in the industry.

5 – Use your network of pediatric peers to help vet your consulting needs.

Surely, if your potential consultant expects to work with you, he or she can provide you with pediatric references whom they have helped with similar issues. SOAPM is an excellent place for a sanity check.

In the end, the practices who invest in themselves are, almost always, the top performers. You’ll see among best performing practices, that many have engaged – and continues to engage – consultants on matters that are outside their expertise.

Brandon, What Is Your Policy On Keeping Credit Numbers on File? [Pediatric Practice Management AwesomeCast]

I continue to get a lot of questions about our practice’s policy of collecting credit information from all of our patients. So Chip and I thought we’d dig into what is a recognized growing trend.

In this episode, I describe my thoughts going into this decision, some of my concerns, and why we decided to collect them. Chip also asked me how do we go about collecting cards, how did I/we present the idea to parents, where I store the cards and what benefits did it bring to our practice and our families.

I also give out a shou-tout to Mary Pat Whaley from Managementmypractice.com. Mary Pat hosts a monthly webinar on how to implement a credit card on file.

I addition to this recording, I’ve written quite extensively about the issue. If you click on this “link“, you’ll be directed to all things collections from the PediatricInc perspective.

Enjoy!

 

 

Listen 

iTunes link

Today’s Special Guest is SOAPM Troublemaker, Dr. George Rogu [Pediatric Practice Management AwesomeCast]

For today’s AwesomeCast, we get to talk to Dr. George Rogu. If you have spent time on SOAPM, you know who Dr. Rogu is. A troublemaker. That is right. For those of you that don’t know, Dr. Rogu works for RBK Pediatrics in Long Island, NY.

I think this episode is going to be one of my favorite episodes of all time. I learn so much from Dr. Rogu. I even took notes. Dr. Rogu shares with us his experience negotiating with big payers. You will not want to miss the technique he used to pester executives at the insurance company and how one day he got a call from the insurance company executives asking him to tell his patients to stop calling them. He also gives great advice on how to prepare and execute contract negotiations with insurance payers.

We also spent time talking about technology and the approach Dr. Rogu has taken in order to find the best of the best as it relates to technology.

It is a great AwesomeCast. You should definitely listen or watch the YouTube video below. I think you’ll want to take notes on this one.

Enjoy!

To listen to the AwesomeCast, click below.

You can also download the audio version of the episode on iTunes

#23 Step by Step Guide To Setting Prices For Your Medical Practice [Pediatric Practice Management AwesomeCast]

At the end of last year, Chip and I talked about New Years resolutions. I shared a few things I had on my list of things I wanted to accomplish in 2014 and Chip provided several suggestions we could do as a practice. One of Chip’s resolutions for practices, was to adjust our pricing.

I wrote his suggestion down. The truth is, I haven’t looked at our pricing in a couple of years. So I knew it was time.

The thing is, I wasn’t sure if I was setting our practice’s pricing correctly, so I asked Chip to give me some direction. After talking about it a little we came to the conclusion that this would be a great AwesomeCast.

So here you have it. How to set up your practice’s prices, step-by-step.

Audio Only

You can listen to the AwesomeCast by visiting the links below:

iTunes

Pediatric Practice Management Media Cast 

#20 Key Performance Indicators Smart Practice Managers Measure [Pediatric Practice Management AwesomeCast]

Screen Shot 2013-11-07 at 7.42.08 PMFor today’s AwesomeCast, I invited my friend Paul Vanchiere from the Pediatric Management Institute. Apparently, Chip had more important things to do… Pfff. Family. So he was MIA for this recording.

If you don’t know about the Pediatric Management Institute, make a note to visit. Paul and his team are doing some really cool things to help pediatric practices manage their business better.

Paul knows a few things about key performance indicators, why they are important, and most important, how to calculate them. So I sat down with him and asked him a few questions regarding the topic.

On the AwesomeCast, Paul shares with us an area on his website where you can find explanations, formulas, examples and descriptions for all the key performance indicators.

For details check out this link: Calculators – KPI 

And if you want to learn about the seminars Paul and his crew is doing around the country, visit: PMI Seminars

Here are other ways you can check out the AwesomeCast:

#19 NCE, SOAPM and the Independent Pediatrician [Pediatric Practice Management AwesomeCast]

Here you have it folks. The 19th episode of the Pediatric Practice Management AwesomeCast.

In this recording, Chip shares with us a new project he has been working on relating to the independent pediatrician topic; we discuss some of the best NCE sessions and what you can expect at each of them, as well as talk about a write up our AwesomeCast got in the quarterly SOAPM newsletter.

 

 

Here are other ways you can check out the AwesomeCast:

If you will be at NCE this year, make sure to say hello. I’d love to get a chance to meet you.

 

#18 Is the Independent Physician a Dinosaur? [Pediatric Practice Management AwesomeCast]

ExtinctionNot too long ago, you couldn’t avoid reading in the media about how the independent doctors  were becoming extinct.

Pundits and experts in the field stressed that if independent doctors, those that own their own practice, didn’t join, sell, merge or retire all together, they were going to walk the same path as travel agents, video stores and mom-and-pop own book stores.

I’ve subscribed to a different thought.

I’m crazy enough to believe that there will always be a place for the small independent practice.

Sure, practices will have to adjust, figure out new ways to meet the demands (just like any other business) of a changing healthcare landscape.

But I’ve argued that even though travel agents aren’t around anymore, airlines, hotels and car rental companies are. Even though video stores are a thing of the past, Hollywood hasn’t stopped making movies. If anything, we have access to more video content than ever before.

But it has been a hard sell (not that I’m really selling anything) to convince people that the end of the world for private practices is not a certainty for all.

Recently, I’ve received great news from the consultant fronts. In conversations with Susanne Madden from the Verden Group, Mary Pat Whaley from Managemypractice.com and the Pediatric Practice Management AwesomeCast’s very own, Chip Hart with PCC, it seems that the independent private practice pediatrician is on the rise.

They all have shared with me that in recent months, their offices have field numerous inquiries from pediatricians looking to breakaway from the, let’s say, industrialized, corporate, factory style medicine, and start their own practice so they can practice medicine on their own terms.

Chip and I couldn’t wait much longer to talk about this topic because it is an area we are both very interested in. So for this week’s episode, we dedicate almost a full hour on the topic of being an independent physician.

We talk about what it means to be independent, the different kinds of independency (yes, there are several kinds), what are some of the trends out there and what to look for when exploring other options for your practice.

Here are other ways you can check out the AwesomeCast: