New administrators need to learn all aspects of ophthalmic practice

October 1, 2008

New administrators at an ophthalmic practice should start by learning every non-medical aspect of the practice, including finances, computer maintenance, patient satisfaction components, and staff requirements and rewards systems.

Key Points

Dallas-You've finally made it. You've landed that job administering an ophthalmic practice. Now it's your first day on the job. Where do you start?

The answer, according to Steve Robinson, OCS, COE, a health-care practice consultant with Advantage Administration, Dallas, and a former practice administrator, is that you've got to become familiar with every non-medical aspect of the practice, because you are now responsible for all of them.

In a recent presentation, "So now I am the boss. What do I do next?" Robinson described what he called the "road map" for the new administrator of an ophthalmic practice.

The place to begin, he advised, is getting to know the practice's financial situation. Do so by studying the practice's profit-and-loss statement and its balance sheet. "You've got to know the financial health of the organization," he said.

Along the same lines, it is a good idea to look at W-2 statements for all employees over the past 3 years to find out who is being paid what and how salary increases have been trending. And while doing that, find out who handles payroll for the practice.

"I recommend having it done by an outside firm. It takes away all the curiosity-seekers who like to know how much everyone else makes," he said.

Meeting with the practice's professional service providers, such as lawyers and accountants, should be a high priority for the new administrator because they can often provide a more objective view of the practice, Robinson said.

The status of outstanding claims often provides insight into the practice's overall financial condition.

Robinson cited a national study that found that the average for current accounts receivable is between 46 and 50%; between 17 and 20% of accounts are in the 31-to-60-days overdue range, 9 to 12% are in the range of 61 to 90 days overdue, and 6 to 8% are between 91 and 120 days overdue.

"What you want to see is that number in 91 to 120 days is not something like 40%," he advised. "If it is, you've got a real problem on your hands." He urged new administrators to find out how the practice re-ages its accounts receivable and who is responsible for handling that process.

Even if accounts receivable are in line with national averages, it's important to find out who, if anyone, in the practice works them. "If there's no program in effect, you need to get to work on it," he said.

Write-offs of bad debts are a frequent drain on practice finances and should be examined carefully, Robinson advised. "Just because the insurance company sends an explanation of benefits and says 'write this off' doesn't mean you have to do it. Find out who has the authority to write off. It should be you, the administrator."

Because employee embezzlement occurs in one out of four medical practices, Robinson said, new administrators should get to know the practice's procedures for handling money. Make bank deposits daily, he advised, and ensure that the person making them is different from the person who fills out the deposit slips. Deposit receipts should be brought back to the office immediately and checked against the amount on the deposit slip.

Another area vulnerable to employee theft is the cash drawer. "If lots of people have access to the drawer and it comes up short at the end of the day, what do you do? So you need some form of cash management program." Similarly, it's important to control access to the practice's checking account and bill-paying procedures, he said.

"You think, 'These things could never happen in my practice,' but it could. You show me your practice, and I'll show you how to steal money out of it. It's easily done," Robinson said.

Like most other businesses, medical practices today rely heavily on computers for many aspects of their operations. "You need to find out who handles your computer maintenance. You don't have to be a computer genius yourself, but you need someone who is," he said. It's also important to have an emergency plan in place in case the practice's server goes down for an extended period, Robinson said.

Along with finances, new administrators should learn whether physicians, staff, and, above all, patients, are satisfied with the practice.

"You may have wonderful doctors, a great staff, and super marketing, but you've got to have happy patients. And they won't necessarily complain if they're not happy; they'll just go elsewhere, because in most cases they have a choice," he said.

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