Updated: Apr 7
Medical practice management is a major undertaking that seems to become more complex and challenging with every passing year. Once a part-time job that was often delegated to a physician’s family members, managing a medical practice today requires a wide range of skills and experience to navigate complicated financial, legal, and staffing issues that can impact even the smallest players in the healthcare industry.
Whether your medical practice employs its own practice manager or relies upon an external practice management consultant, there are many steps you can take to improve your practice’s operations. Here are a few medical practice management resources, tips, and advice that can help your medical practice services run smoothly and enable sustained growth over time.
What is Medical Practice Management?
There’s plenty of things that go on behind the scenes at a medical practice. While physicians must also keep up with patient care, they also must run a business. Medical practice management are the administrative tasks that keep a medical practice up and running efficiently so physicians can deliver care to patients.
Managing a medical practice involves everything from medical billing and claims processing, metrics reporting, appointment scheduling, and organizing patient data. Whether through the help of medical practice management software, in-house staff, or outsourced consultants, managing an efficient and productive medical practice is possible with these tools.
Why Effective Medical Practice Management is Essential
The components of a highly successful practice don’t just involve delivering the best care to patients, but also optimized medical practice management. Managing a medical practice ensures that all operations are running efficiently and smoothly so that your patients have a better patient experience and you’re receiving your due revenue. It’s a chain reaction that leads to more patients and better healthcare, and eventually a profitable practice.
While balancing patient care and running a business can be a challenge, practice management resources and tips can help develop your practice’s operations and care while making meaningful changes in your overall management.
Medical Practice Management Resources
From EHRs and document management to clinical practice management systems, dozens of new products and tools – many built by upstart young technology companies – are changing the face of medical office administration as we know it. Here are some of the practice management resources that can enhance managing a medical practice.
Resources from Lean Startup Management
The healthcare landscape is always changing, so healthcare providers must adapt and evolve to the changing market. Surprisingly, tech entrepreneurs can provide advice and lessons on achieving success for even medical practices.
First published in 2011, Eric Ries’s book The Lean Startup has become the seminal guide for tech entrepreneurs around the world. His management ethos aims to turn the growth and scaling of a technology company from an art into a science by providing a framework for entrepreneurs to test their hypotheses, meet their customers’ needs, and stay flexible enough to redirect (or “pivot”) their businesses when necessary.
While not all of the methodology of lean startup management can be incorporated into medical practice management, the key principles of the lean startup ethos apply pertinently to businesses across all industries - including medical practices. A vital key to improving your medical billing outcomes is to view your medical practice as a business, not just a vehicle for delivering patient care. Here’s how to utilize several of Ries’s top “lean” principles for your own practice’s success.
Seize Opportunities to Create New Revenue Streams
The term “entrepreneurship” has been around for decades, and it didn’t always call to mind the image of tech developers building apps in their garages! Entrepreneurship is about launching, building, and growing businesses that seize opportunities and solve problems. By nature, your medical practice solves problems (i.e., the health issues faced by your patients). But what opportunities is your practice seizing? Consider how you can better serve your community and create new revenue streams by offering additional services. Telemedicine and group visits are some of the ways you can expand your boundaries.
Importance of Strong Management
Lean startup methodology dictates that founders must gear the management of their companies specifically to the context of their businesses, and that applies fervently to the medical office setting as well. How much consideration do you give your employees and the unique experience of working for your practice? How much information do you give them on medical practice goals and how their efforts help you meet them (or not)? How are they motivated to help you achieve better financial outcomes? To see improved bottom-line results, it’s imperative that you never, ever neglect to provide your team with strong direction and management.
The fundamental activity of a startup is to build a product, measure how customers respond, and learn whether to pivot or persevere – and the same goes for your practice. Consider a big change you’ve made at your practice in the last year, whether it was a rearranging of your staff, bringing aboard a new physician, or contracting with a medical billing service. How did your patients respond? How did you assess the outcome of your decision? How did you know whether to stick with the new direction or try something else? All medical practices must monitor their data, review their business outcomes, and learn from every one of their decisions. Otherwise, it can be far too easy to spend too much time on the wrong path for your practice.
Enhance Your Medical Practice Management with an MSO
With managed care plans on the rise, many consumers are responsible for a greater portion of their care costs. This translates to many practitioners that want to earn revenue from managed care patients have little choice but to buy into a physician-hospital organization (PHO) or sell out to a larger group or hospital.
But there is a third option available to these healthcare practices. By working with a management services organization (MSO), providers can essentially straddle the line between the independent and dependent options for operating a practice. An MSO is a business that provides non-clinical services to providers to help those providers better manage their business concerns. To determine how attractive an MSO relationship may be for your practice, be sure to ask yourself the following questions:
How important are managed care patients to your medical billing performance?
As of 2020, approximately 40 percent of Medicaid patients are enrolled in managed care plans. Yet as healthcare shifts further toward-managed care-first models, they’ll grow more important in the years to come – so now may be a wise time to find a transitional way to bring them into your practice.
Do you need longer-term solutions than an MSO can provide?
But there’s a downside to that “transitional way” mentioned above. Most healthcare-industry stakeholders don’t believe the MSO model will be around forever; long-term, it will likely be phased out by the rise of Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs). If you’re more interested in exploring those approaches than in maintaining your practice’s autonomy, you may be wise to take the bigger leap to an ACO or PCMH model now instead of using an MSO as a short-term solution.
How qualified is the MSO support system when it comes to your specialty?
MSOs are most popular among specialist physicians who still want or need to accept indemnity patients to grow their revenue. But being the only practice in your specialty in a given MSO network may create challenges if you have specialized administrative or medical billing needs, like dermatology, acupuncture, and other specialists often do. Working with an outsourced medical billing company is often a smart way for those practices to improve their overall performance.
Best Practices for Managing a Medical Practice
Update Your Medical Policies Guide
Like many other areas of your practice, policy-driven tasks like medical billing are likely a matter of routine. If your staff members know how to do their jobs well, your practice probably appears to run like a well-oiled machine. But is that machine operating at optimal efficiency?
To assess the effectiveness of your medical processes and physician practice management, it’s important to put your policies down on paper so you can review and update them periodically. In our experience, small practices often don’t do this, relying instead on legacy staff and institutional memory to educate newcomers on how their software works, what their steps are, and who is responsible for certain process-related tasks (such as medical billing).
If your practice operates this way and the entire end-to-end process is housed only in the heads of your staff, you could be headed for trouble if they leave or retire. In a worst-case scenario, relying heavily on your team in the absence of written policies can potentially put you at risk for embezzlement.