Over the years, I have been continuously amazed at the number of physicians, nurses and other health providers who leave the "bedside" practice to pursue other careers within the healthcare industry. Some providers take hospital-related administrative positions while others accept roles in various types of healthcare entities. Regardless of where they go, it is critical that they have sufficient management skills to successfully assume their new responsibilities. Of course, it would be easy, but expensive and time consuming, to obtain an executive MBA. However, there are alternatives such as “certification” courses, programs of varying length which provide new knowledge in specific areas. I believe that most of us need some form of additional education if we are to be successful in our future healthcare environments.
Looking back, I wish there had been a program of management study when I made the transition from clinical doctor to VP Medical Education at Orlando Regional Medical Center and later when I started Sterling Healthcare. Being a Chemistry major in college and graduating after 3 years, I had no time for even basic business courses. I had to learn about business while “on the job.” Healthcare has become very complex and effective leaders need to be well versed in many areas. This is true for hospital department heads, physicians with busy practices, physician owners of ASCs, managers of diagnostic centers, medical entrepreneurs, hospital board members; and the list goes on. Every day I encounter situations where business and leadership training would have made a big difference in the outcomes.
One need look no further than the headlines to find a perfect example of how lack of understanding can turn a situation from bad to critical. While we are all aware of the crisis at Jackson Memorial, this situation is not unique among safety-net providers across the country. In most cases, the severity of the health system’s problems are not initially understood by their Boards. For example, Board members need to understand the difference between Gross Charges and Net Revenue. Understanding how to make the calculation accurately may make the difference between making and losing money. At Jackson Memorial, board members were shocked to learn that the methodology that had been used previously had been incorrect and thus what was perceived to be a $40 million dollar loss, turned out to be a $244 million loss. The hole to be climbed out of suddenly got a whole lot deeper.
This past year, I was asked to serve as a financial advisor in a bankruptcy of a chain of diagnostic imaging centers. The debtor repeatedly told the Judge that there was $4 million in accounts receivables. I looked at a Date of Service reports from the billing company and immediately realized that the actual “collectable” receivable balance was in fact $1.1 million. As a result of my analysis, I was able to convince the bank, the secured lender in the case, to take a substantial reduction for settlement of their claim. Once again, fully understanding the numbers and the methodology made a very big difference!
Recently, a hospital that my firm consulted for decided to seek “critical access” designation. Such designation had financial as well as operational implications for the hospital. Many members of the Board of Directors thought it was a good idea only because they had been told so by the company that had been hired to manage the hospital. Given the fact that the average daily census was 4-5, on the surface, it seemed like this was the right concept at the right time. What was not taken into consideration was the fact that the family practitioners and the internists on the hospital’s medical staff did not want to admit patients of those who might have otherwise been admit-able. Another option for the Board, had they had more knowledge of the complexities of the situation, would have been to delay the “critical access’ designation and focus on recruiting additional physicians. Many physicians today are seeking to become employees of hospitals. As such, hospital leaders need to understand all of the issues physician/provider employment involves. Treatment of physicians as “independent contractors” versus actual W-2 employees may create greater liability for the entity. Leaders should be familiar with the history of the independent contractor issues and the IRS, as well as the 20 common law tests and Section 530 relief/exemption from the rules. Once that issue is determined, there are a variety of ways to compensate physicians. Knowing up front, which have been successful and which have failed will impact the success of the entity’s employed physician model. In addition, understanding the difference between the hospital‘s governing body and the medical staff by-laws will help tremendously.
Perhaps the most difficult areas for new healthcare leaders are budgeting and strategic planning. Most physicians in their 50’s and beyond never had to use Excel, yet I don’t know how anyone would be able to prepare a budget without using it in today’s environment. Knowing how to read financial statements and understanding billing, collections and the accounts receivable/cash flow cycle is critical to building a healthy practice. All too often I encounter practices with little understanding beyond their current bank balance. These days one must not only understand the concepts, but also the technology. Such skills are invaluable to any rising healthcare leader.
Use of technology includes instant communication with Blackberrys and other smart phones, implementation of electronic medical records, as well as online appointment scheduling and prescription refills. Proper use of these technologies can make a big difference in the efficiency and effectiveness of a physician’s practice. I recently consulted with a busy cardiology practice where lots of time was lost searching for charts that were misplaced around the office. Staff was not answering phones and scheduling appointments because they were away from their desks chasing charts. The practice has since implemented an EMR system which has eliminated those problems. In addition, front office staff communicates with the doctors and medical assistants via e-mail and messaging to laptops and smart phones to convey patient messages and to alert them about important information, in real time, without leaving their desks. Both appointments and patient satisfaction are up as a result.
Finally, marketing of healthcare has also taken on new dimensions. It used to be that we relied solely on referrals, and written messages. Today practices have websites, doctors participate in Webinars, advertising and direct mail are more prevalent, and branding, while underappreciated, is beginning to take hold in medicine. Physicians need to be more creative to stand out in the crowded field. This extends not only to attracting patients, but also to recruiting staff. Today you are just as likely to see ads for employees on Craig’s list as you are in JAMA.
Given all of the issues we currently and will encounter in the future, the question is how to provide current and emerging healthcare leaders the tools they need to succeed. The good news is that there are a multitude of educational offerings today to fulfill virtually every need. In addition to an MBA, a number of universities have courses on weekends which can lead to certification or if for-credit can transfer to degree programs. Professional development extends beyond the clinical setting and organizations need to value leadership skills the same way we value medical training. Learning management, leadership, and business skills is no different than keeping up with one’s specialty. Things change and evolve. What is important is dedication and commitment to change and evolve as well.
