I was not surprised to find from our survey of practice owners that their worst nightmare in business would be their practice manager resigning. This scenario rated higher than tax fines, FairWork complaints, Medicare audits and fraud because, by and large, practice owners put so much responsibility into practice managers’ hands. Moreover, many practice owners do not really know what a practice manager actually does, to keep the business running.

In many practices no resources are invested in documenting the intellectual property held by the Practice Manager. The nightmare is realised at the time of a resignation, when there is no way to handover that knowledge to a new Practice Manager.

So let us imagine the scenario.

Jenny the loyal PM of the past six years tenders her resignation. Jenny writes that she is burnt-out and wants a simpler life opting to do admin and bookkeeping for a local plumber instead of running your practice.

 

What would a practice owner do?

After catching their breath, they recognise that they should have spent more time listening to Jenny over the years. They should have created more opportunity for her to develop her management skills, bring in exert help to reduce her workload and to invest in documenting some of the practice workflows, processes and procedures. Their immediate focus would turn to her absolutely critical (and undocumented) operational role in financial handling, banking, bookkeeping, paying staff and distributing revenue to doctors. At some stage the penny might even drop that she is a signatory on the practice bank account!

During this immediate uncertainty the typical practice owner would turn their mind to recruitment. They would commit to recruiting “Jenny 2.0”, someone who is even better and take this opportunity to try improve their admin team. Someone new who will save the day……

This scene will* play out in 10 medical practices today and 50 this week in Australia.

My concern is that replacing Jenny with Jenny 2.0 will not lead to any material improvement. It will not reduce the risk of the nightmare scenario happening again. It will not let the practice owner sleep easier. And it will not reduce the risk of producing another overworked, burnt-out Practice Manager.

To make sure that Jenny’s loss creates an opportunity for positive change, there are some really important steps a practice owner should take:

What practice owners should do when their Practice Manager resigns:

Step 1: Write a Position Description – to understand the role that your PM was supposed to fill

The Australian Association of Practice Managers (AAPM) optimistically defines the role of practice manager as “someone who performs…. financial management, human resource management, planning and marketing, information management, risk management, governance and organisational dynamics, business and clinical operations, and professional responsibility.”

This position description sets an impossibly broad range of responsibilities that would stretch even the most highly trained administrator.

So to properly design the role for the new Practice Manager, a tailored position description must be the first step. This is also an opportunity for practice owners to really understand what is required to run the practice.

The best starting point is to consider the primary role needed is someone to manage the administration office. Consider the role of an Office Manager: someone who will need to coordinate and train the whole administration team; provide cultural leadership; understand the functional operations of the practice; and connect the moving parts. While this person will have the capability of filling a front desk role, their primary activities will be making sure that the administration team and infrastructure are operational.

These roles are the core of what any practice will need for their new recruit. Of course the position description should include a responsibility to maintain documentation all of the practice processes, documentation of administration activities and to report regularly to the practice owner about these activities.

There are many other duties that need to be covered in order for a practice to function, but those duties should never get in the way of the core requirements to keep the office running, and running well. There is a tendency in medical practices to pile-on all of the responsibilities covered in the AAPM definition without any regard for whether or not the role is realistic. Making it impossible for any Practice Manager to do the job well.

Is the position description realistic?

Step 2: Assess the need

In Step 1 the critical need for excellent office management formed the basis of the position description. So what does a Practice Manager NEED to do, and what can be done by someone else?

For this Step, a list of all of all the specialised activities needed in the practice should be produced. A judgement will need to be made about how these duties can be filled, including: bookkeeping; payroll; strategy; budget; recruitment; review of legal documents; negotiating contracts, leases and commercial deals; financial reporting; risk assessment; and organisational dynamics. Is it possible, fair or reasonable to add these activities into the Office Manager position description?

All of these specialised activities are essential for practice operations, but they all require a specific skill set and training. They take a lot of time. These activities inevitably take a lot more time for an under-resourced or under-qualified Practice Manager that an expert. And worse, when mistakes are made they become very expensive mistakes.

While the next Practice Manager may have training and some capability to perform a number of these duties, adding them to the role will come at the cost of reducing their effectiveness in the primary role.

Step 3: Add in expertise

Practice owners at this stage will have (1) an achievable position description for Office Manager, and (2) a list of additional specialised duties that need to be filled.

The most important improvements a practice can make when replacing a Practice Manager will be achieved in this Step 3. Here, he capability of the practice and the management team can be substantially increased. Costs can also be reduced and the risks to the practice minimised. Perhaps, most importantly, medical practice owners can improve their quality of their life!

The specialised duties listed in Step 2 can ALL be performed with outside, expert help. By engaging subject matter experts who work on a pay-per-use basis, external service providers can supercharge the practice. Filling these roles with expertise and timely help, the next Practice Manager will have less stress, and highly capable team surrounding them and a much lower risk of error.

For example (see table): A qualified bookkeeper will complete bookkeeping inside a Practice in about one-third of the time it will take a typical Practice Manager, with a lower error rate; a payroll system will reduce the risk over underpayment of staff, and time-theft by employees; a Business Consultant working on Strategy will provide a meaningful and expert advice to improve business outcomes and financial position; Hiring a Recruitment Service may have up-front costs, but it will save the Practice Manager time and usually provide a level of guarantee ; the practice Solicitor will review contracts at a price, but it will reduce the risk to the business; a Business Consultant overseeing financial reports will empower the practice owner with their insights into the business; and a Gap Analysis to assess organisation efficiency from an expert consultant can save tens of thousands of dollars per year.

Comparison of Practice Manager multi tasking with external expertise

Bookkeeping

Practice Manager

QualityCostOutsourced ExpertiseQualityCost

Other benefits of outsourcing

3 hrs/week

*

100%1.5 hrs/week

*****

60%

Lower error rate,          reduced financial risk

Payroll

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

2 hrs/week

*

100%

0.6 hrs/week

*****

85%

Expert award interpretation, reduced risk of staff time theft

Strategy & Business Planning

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

16 hours

**

100%

8 hours

****

100%

Better outcomes,  improved profit

HR & Recruitment

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

8 hours

**

100%

6 hours

****

120%

Time efficiency,        improved fit for roles

Negotiating Deals

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

 

*

100%

 

****

100%

Financial improvement

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

 

*

100%

 

*****

250%

Reduced risk

Financial Reporting

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

 4 hours

***

100%

2 hours

*****

120%

Better quality insights, increased profits

Organisational Dynamics

Practice Manager

Quality

Cost

Outsourced Expertise

Quality

Cost

Other benefits of outsourcing

4 hours

**

100%

2 hours

****

100%

Reduced costs

This list will allow practice owners to focus their attention on what is readily available to support their new Practice Manager. It also makes recruiting that person easier, knowing that there is no expectation to demand a high level of competency in all of the business skills.

Step 4: Recruit and engage

With the new position description in hand, and a recognition of the scope of external services that can be brought in, practice owners can confidently advertise and interview for a new Practice Manager. By focussing on the core competencies practice owners are now able to identify the best candidates. We recommend that when candidates nominate previous ‘experience’ with some of the specialised skills (see Step 3), their competency should be viewed with scepticism unless they have had formal training.

From the candidates interviewed, choose the next Practice Manger by determining can best fill the role in the position description, who has demonstrated leadership experience and who can proactively problems solve with nous. Do not be distracted by the add-on experience of un-trained specialised skills or experience with your practice management software! Where needed these skills can be taught or out-sourced.

Practice owners should next engage the specialised services that will support the Practice Manager and the business going forward.

The lowest hanging fruit is usually bookkeeping and payroll. In our view these are activities that should ALWAYS be provided by an external provider, to reduce costs, minimise the risk of fraud and maximise the compliance with employment law. Even better, these duties can all be done off site. Contact Hoxton MPM Medical Bookkeeping and Payroll.

A contract based Business Manager can work as a management mentor, business advisor or extra pair of hands when crises emerge for the new Practice Manager. Working on coherent strategy, planning and financial reporting this expertise can powerfully improve the performance and structure of a practice. The outcome here should be seen in terms of reduced stress, happier staff and doctors and better financial performance. We recommend that practice owners engage industry experts who work on an hourly rate. For further information contact Hoxton MPM Practice Management Advisory Services.

All practices should have an interested solicitor already engaged. Use them for legal documents and reviewing of employment contracts. Consider discussions with recruitment services to help fill difficult roles. Use the contracted Business Manager to re-design HR systems, organisational structures and position descriptions.

Finally, many practices that we work with have many in-built inefficiencies. From under-utilisation of practice software, to redundant and duplicate processes, and even to paying staff to print out faxes in order to scan them into the records (!). A “Gap Analysis” can identify these process inefficiencies and also suggest remedial work that the new Practice Manager can set about doing. It would not be unusual for a Hoxton Gap Analysis to find $20k p.a. worth of savings in the smallest of medical practices. External expertise reviewing the organisation and process dynamics can be beneficial and is part of the Practice Management Advisory Services that Hoxton MPM provide.

Step 5: Enjoy with confidence

Jenny 2.0 would be a mistake. A re-imagined, highly competent team without single points of failure is achievable. External and outsourced resources empower a practice, and should be viewed as the modern way to meet all of the increasing governance, organisational, reporting and compliance obligations of a practice management team.

Moreover, bringing in outsourced solutions will allow practice owners and practice managers to happily complete their roles successfully. Better financial outcomes. Less risk. And a happier team.

Replacing a Practice Manager is an opportunity to make a big difference in a difficult industry.

To discuss these ideas further, please feel free to book a 30 minute obligation free discussion with one of our Principal Advisers.

Supercharge your Practice Manager

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