“When we brought on our CEO three years ago, we wanted to expand the practice, hire more providers, and bring in more patients. We used financial forecasting to transform the ser- vice culture within our practice, and it really paid off,” said Dr. Spencer, a member of the Texas Medical Association Ad Hoc Committee on Health Information Technology. Premier Family Physicians, Dr. Spencer explains, wanted to
improve patients’ experience with their first point of contact with the practice. To that end, he and the physician leaders of the practice worked with Mr. Steinle to determine whether an idea to revamp front-office phone procedures was financially feasible. “We wanted to get rid of our automated call answering sys- tem and have nurses answer all patient calls. We knew we’d need to hire more staff to achieve that, so Rich did some fore- casting and determined at what point the move would pay for itself. It required an increase in overhead early on, but we were able to get all the doctors on board with the idea by showing them the financial model,” Dr. Spencer said. Financial forecasting involves estimating the business’ pro- jected income and expenses and using the information to de- termine profitability. The result: Premier Family Physicians unintentionally in-
creased its volume of appointments — and its revenue. Ad- ditionally, Dr. Spencer says satisfaction surveys indicate Pre- mier’s patients like speaking to a person each time they call the office. “We found that once nurses started taking calls from pa-
tients directly, they were able to more efficiently assess pa- tients’ needs and schedule appointments. With the help of our CEO and his financial staff, we’re able to measure the financial impact these kinds of decisions have,” Dr. Spencer said. He adds that since implementing the change to phone-an- swering protocol, the practice has gone from seeing 400 new patients per month to seeing 900. Dr. Spencer acknowledges that having nurses take patient calls isn’t the only reason for the revenue and patient volume increase but says it certainly has made a difference. “Physicians are full of ideas to make patient care better, but they may be reluctant to put some ideas into action because they don’t know how to make them work from a financial standpoint,” he said. Dr. Spencer’s story illustrates the importance of physician involvement with the financial management of their medical practice and why they need a basic understanding of the busi- ness side of medicine. Dr. Spencer realizes not all independent physicians have
the resources to hire a CEO to run financial reports and assess the practice’s financial health. He encourages physicians to turn to TMA for help. (See “Business Management 101: Help From TMA,” page 23.)
“Independent physicians need someone’s financial expertise if they want to remain independent in the current health care environment. TMA has a number of resources to help physi- cians get a handle on their practice’s finances,” he said.
20 TEXAS MEDICINE March 2014
Get the full financial picture
Seven years ago when Christopher Crow, MD, a Plano fam- ily physician, set out to launch Village Health Partners and Legacy Medical Village with his physician partners, he sought the expertise of Lance Spivey, who ran the financial services firm StratiFi Partners at the time. Dr. Crow says the collabo- ration with StratiFi Partners grew into a new business ven- ture.
Dr.Crow and Mr. Spivey started StratiFi Health, which provides independent physicians with strategic, financial, and operational advice. Dr. Crow is StratiFi Health’s CEO, and Mr. Spivey serves as president. Dr. Spencer and Mr. Steinle actually met with Dr. Crow and partnered with him to model Southwest Medical Village in Austin off of Village Health Partners and Legacy Medical Village. Dr. Crow, a member of TMA’s HIT committee and past chair of TMA’s Council on Socioeconomics, says the partner- ship shows the value of physician collaboration. “When I met Lance, he helped the practice see the full fi- nancial picture, analyze important data, and make strategic growth decisions. At the time, we had one office location and three physicians. We have three locations and 30 physicians and nonphysican practitioners today and hope to have 50 by late 2015,” Dr. Crow said. That level of growth wouldn’t have been possible without dedication to financial oversight by the practice’s physician leaders and the help of Mr. Spivey, Dr. Crow says. “The practice is at a point now where we can consistently
trend and forecast. The numbers tell the story, and then we can look at what’s affecting the practice’s actual financial out- put and production to guide our decisionmaking,” Dr. Crow said.
Like Dr. Spencer, Dr. Crow agrees that having a clear pic-
ture of the business’ financial performance requires collabora- tion with an expert.
“Most physicians and their staff have access to financial
reporting tools, but most of us need someone to pare them down, analyze them, and summarize the challenges and areas for opportunity,” he said. Mr. Spivey says it’s crucial that physicians keep their finger on the financial pulse of the medical practice and regularly review business reports. “Most physicians didn’t go to business school. They need to consult internal or outsourced expertise to provide them the fi- nancial information they need, analyze it, and help them take appropriate action based on the numbers,” Mr. Spivey said. Transforming the financial side of a medical practice into a
model of success is no easy task. At Premier Family Physicians, for instance, Mr. Steinle says he generates reports on cash flow and patient visits for physicians each week. On a monthly ba- sis, he produces a physician financial summary, quality reports, and a revenue cycle management report that details claims submissions and error rates; payments and charge totals; out- standing claims; a breakdown of aging accounts receivable; collection rates; and more.
“Our mantra for the financial side of the business is ‘We can’t manage what we can’t measure.’ We’ve developed a best
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