Merge separate office operations painlessly

Practices on a collision course

(Editor’s Note: This is part of a continuing series on medical practice mergers. See Physician’s Marketing & Management, November 1997, p. 144, and PMM, December 1997, p. 164, for other articles included in this series.)

What happens when two practices that have competed head to head for 20 years merge? Chaos and mayhem, according to one administrator who has been there. Nowhere do the difficulties in such situations manifest themselves more than in deciding which operational procedures and office systems will hold sway in the merged unit.

While there are few things that can make it easier, perhaps others can learn from the experience of Bay Orthopaedic and Fracture Clinic and Millicoma Orthopaedic Clinic in Coos Bay, OR. The two started talking merger in 1993 after one of their biggest referral sources — a multispecialty practice — decided to bring in its own orthopedist, says Tom Potts, administrator of the merged unit, South Coast Orthopaedics.

On Jan. 1, 1994, the two clinics united, but for over a year, it was only a merger on paper. "The practice operationally remained as two separate entities," says Potts, "with the same staff, management, and philosophies as before."

When Potts joined the organization in the spring of 1995, he faced a daunting task — unifying the group, including making all of the policies and procedures uniform throughout the practice.

The differences ranged from how to file, to what computer system to use.

Potts started with the easier problem — the chart-filing system. One practice filed numerically, the other alphabetically; one filed dictation by body part, while the other filed by correspondence type. Potts says his first step was to work with medical records staff to design a new chart that both practices could work with efficiently. He took that chart to the board along with arguments on why it was the best one to use.

A decision was made to file alphabetically by body part — a kind of compromise between the two pre-existing practices. But it was not an easy conversion, says Potts. "The difficult part was physically changing the numerical charts to the new formats. We attempted to do this as charts were pulled for appointments, but we didn’t make any progress."

When the group relocated to a single facility, the staff spent several days combining and changing charts.

According to Bette Waddington, CMPE, a consultant with the Medical Group Manage- ment Association Management Consultants in Englewood, CO, it sometimes helps to have committees made up of staff from both practices make these types of decisions.

For instance, one Wisconsin group with which Waddington worked had two obstetrical practices in the same building. "They had separate forms, sheets, and schedules," she says. Rather than waste time bickering, a committee allowed the practices to make decisions they could all live with. "If no executive decision can be made, then get a team together to decide," she says. "If they start to develop relationships with each other, they find it harder to be rude. They may even come up with new forms, new policies, and a new culture that will help a merger be successful."

But Waddington says you should save the committee decisions for major items. "Some things don’t merit a committee," she says. "If one uses a scheduling book and one uses an electronic scheduler, you really don’t have time to do a committee. Bite the bullet and make a choice. You’ll save time in the long run."

The computer system was a bigger challenge for South Coast, says Potts. Millicoma was using the Medic Information System, while Bay Ortho was using Alcon. The board decided to continue using the Medic system — based on the salesman and on the recommendation of Potts’ predecessor.

"The conversion was a nightmare from the start," says Potts. Alcon refused to cooperate in providing format information that Medic could read and convert. Medic was also uncooperative. "I finally had custom programming done to convert the Bay Ortho information to Medic," says Potts.

Another week was spent cleaning up the converted information — finding duplicate accounts, balancing the balance forward accounts receivable, and manually inputting accounts that were not included in the conversion tape.

During the week that Medic had the conversion tape, the staff had to manually track every change to an account, every new patient, and every appointment for future input into Medic. Potts had planned four days to convert — including a weekend — but actually spent five on the project.

This particular transition worked only because there was no other choice, Potts says. "The contracts were signed before I started." The process was so arduous, and the help from both of the programs’ companies so poor, that Potts is going to look for a completely new system in 1998.

Waddington says many merger partners make big mistakes in deciding which information systems to use simply because they do what South Coast did: They choose the one based on which salesman they like best. "You have to decide based on which system is best for the practice."

If both systems are touted by staff, then go through a request for proposal process in house, she advises. "Set up a committee of people from both practices who will be using the systems and let them make the decision. If they are part of the process, they will buy into it."

Although this is a potential problem area for merger partners, it was one where Potts had a surprisingly easy time. "Both practices were small and didn’t have written policies in place," he says. Actually writing human resource policies, job descriptions, and procedures, and implementing a pay scale was easy.

In general, Waddington says merger partners should conduct a personnel due-diligence prior to unifying. "Take both personnel policy manuals and make a little matrix which defines the key pieces in each of them which you want to retain."

For instance, if one group gets seven holidays and the other gets five, you need to determine which policy you will follow. "If you cut back to five, what is the trade-off for the employees who are losing out?" she asks. "You have to know not just what changes you will make, but their impact and how to address it."

When making personnel policy changes, be sure to ask the employees for their opinions, advises Waddington. "That way, they feel they are part of the decision-making process, and it will help allay some of the frustration and anger that always occurs in a merger."

Waddington says that sometimes the little things mean a lot. "Which scheduling system, even the office furniture you choose, can make a big difference to the staff," she says. Her best advice is that all your decisions should be based on meeting the needs of the practice. "If one system or policy meets your needs, don’t go out to find a third option just to stop an argument."

Bette Waddington, CMPE, Consultant, Medical Group Management Association Management Consultants, Englewood, CO. Telephone: (303) 697-5216.

Tom Potts, Administrator, South Coast Orthopaedics, Coos Bay, OR. Telephone: (541) 267-5211.