Medical Practice Management in the 21st Century THE HANDBOOK Medical Practice Management in the 21st Century THE HANDBOOK Marjorie A Satinsky MBA with Randall T Curnow Jr MD MBA Radcliffe Publishing Oxford (cid:129) New York Radcliffe Publishing Ltd 18 Marcham Road Abingdon Oxon OX14 1AA United Kingdom www.radcliffe-oxford.com Electronic catalogue and worldwide online ordering facility. © 2007 Marjorie A Satinsky All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the copyright owner. Marjorie A Satinsky has asserted her right under the Copyright, Designs and Patents Act, 1998, to be identifi ed as Author of this Work. Neither the publisher nor the authors accept liability for any injury or damage arising from this publication. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN-10 1 84619 023 1 ISBN-13 978 1 84619 023 0 Typeset by Egan Reid Ltd, Auckland, New Zealand This book is dedicated to John A Fallon, MD, MBA, FACP Table of Contents Foreword ix Preface x About the Authors xi Acknowledgements xii Introduction xiii Section I: Getting Started 1 Creating a Strong Foundation for Your Practice 1 2 Organizing and Managing Your Practice 5 3 Business Planning 17 4 Marketing 27 Section II: Managing Finances 5 Introduction to Financial Management 39 6 Revenue Cycle Management 53 Section III: Recruiting and Managing Staff and Outside Resources 7 Human Resources 69 8 Physician Issues 89 9 Using Outsourcing Effectively 103 10 Hiring and Managing Consultants 113 Section IV: Improving Healthcare Delivery and Clinical Outcomes 11 Quality of Care 117 12 Using Information Technology to Enhance the Quality of Care, Operational Effi ciency, and Revenue in Your Practice 129 Section V: Ensuring Compliance 13 Corporate Compliance 147 14 An Overview of HIPAA Compliance 159 15 HIPAA Privacy Rule and Security Rule Concepts 169 Appendix A: Steps for Creating a Strong Foundation 171 List of Additional Appendices Appearing only on the Website 185 Index 187 Foreword In a world that is rapidly changing, physicians fi nd that the business side of practicing medicine can lead to stress and anxiety. Running a successful and fi nancially profi table practice is increasingly challenging. Many blame outside forces for the lack of success. “It is the government,” “It is the insurer,” “I cannot fi nd good people.” The blame game may lead to some emotional relief, but it does not solve the issues of surviving in a tough environment. Another common approach is presuming that working harder and seeing more patients will result in a better outcome. This leads to burn out and frustration. Working harder and longer doesn’t address and correct. Behaving in the same old way produces the same old results. A better method of addressing the challenges of managing a medical practice is to introduce sound business practices, including best practice, into your offi ce. This approach requires that you are current and professional in the approach to the business of medicine. It involves the introduction of proven systems that involve all staff. Working as a team, you and your staff decide how to deal with the outside world of which you are a part. In my experience, most problems in the offi ce are self-infl icted. It is likely that someone elsewhere has had a similar problem and found an effective way to solve it. For clinicians, fi nding solutions to business problems is like learning to fl y an airplane. If you are unfamiliar with practice management, the business of medicine can be a world of downdrafts, hard landings and bumpy rides. Before you learn to fl y, you need a good fl ight manual. Medical Practice Management in the 21st Century: the handbook is such a manual. It is written by experienced people who have successfully dealt with practice management and taught it to practicing physicians. The authors take a pragmatic approach that will help streamline procedures, develop a digital offi ce, and implement systems to ensure harmony among staff and patients. They know where the mountains are and how to avoid crashing into them. This book is essential for any clinician planning to open a new practice or attempting to improve the quality and effi ciency of an existing practice. Most practices run in routine crisis mode. If crisis is routine it is not crisis at all, but a failure of management to act. Using the pragmatic approach presented in this book will allow a clinician to get out of “routine crisis” and back to the profession of helping people. Utilizing this book will improve your health and the health of others. Read and learn . . . John Bachman, MD Sanders Professor of Primary Care Mayo Clinic, Rochester November 2006 ix