When a full practice means lost revenue

What to do when your practice is at capacity

To outsiders, it seems like an ideal situation: a full patient panel, busy physicians, and a strong revenue stream. But for mature practices, a full practice has a downside. Falling reimbursement requires doctors to see ever-increasing numbers of patients; a full panel puts your preferred provider standing on the line; and for your loyal patients, the increasing business means longer waits and less time during appointments.

The answer could be to hire more physicians or physician extenders. But if you do that, you may need to expand your facility. For other practices, adding a physician is like suspend- ing family planning: Gestation takes a long time, you don’t know what you’ll get, and the thought alone can cause some partners to leave a practice.

"In this day and age, I don’t know a practice that can afford to turn away patients," says Gail Holman, FACMPE, MBA, practice administrator at Dermatology Associates of Atlanta.

Recognizing the problem

There are several clues that a practice needs to expand. "We have a three- to four-week wait right now," says Holman, noting that two weeks is normal among dermatology practices. For cosmetic surgery patients — mostly private-pay patients — the desired wait is three days. "When you can’t meet those simple goals, and your due diligence finds a lot of no-shows, you know you have to do something quickly," she explains.

The practice began to search for a new physician last year, and one has been hired to start in July. A further search will get under way to bring another on board in 1998.

Stan Zagorski, executive director of Associated Physicians of Wyoming Valley in Kingston, PA, has seen his practice grow from four physicians in one office to 21 doctors in seven locations over the last 15 years. "You have to know objectively how many patients one doctor can see in a day," he says. While the number will vary from physician to physician and specialty to specialty, it’s usually from 20 to 45, he says. "A physician who sees a lot of Medicare patients will see fewer than a pediatrician. They just take longer."

When your medical staff start exceeding that capacity, be concerned, Zagorski says. "If you have too many patients in a day, then quality suffers."

He uses standards set by the Medical Group Management Association of Englewood, CO, as a guide, as well as information from the American Medical Association on the numbers of specific specialties necessary per 1,000 population on a state-by-state basis.

"But remember that the real needs will vary across the state," Zagorski warns. He says a practice needs to extrapolate from those numbers — such as a family practitioner for every 10,000 population in Pennsylvania — based on its location, the employment level of the community, the number of elderly patients, and the economic health of the population.

More than one solution

Once you determine there is a problem, Holman says, you have to decide what to do. "There is no one answer," she says. "It really depends on the personality of the practice and its long-term goals."

Doing an efficiency study can shed light on areas where the practice can streamline, Zagorski says. And every practice should look at its patient panel to determine if there are non-compliant patients who can be removed. (For more on withdrawing care, see story, p. 81.) But neither of these are long-term solutions.

Hiring new medical staff

The obvious approach is to hire more medical staff, and Zagorski says you should start with physician extenders. "We hired physician assistants, and the patients responded really well," he says. "Some of the doctors weren’t as thrilled." But physician assistants and nurse practitioners can free up valuable time that physicians spend on simple procedures and patient education at a fraction of the cost of hiring another doctor. Only if the mid-level professionals provide good outcomes should a practice hire a new doctor, says Zagorski.

That rule is subject to bending in some specialties, Holman says. In the past when the practice was full, it hired physician extenders. "But in our specialty, it’s hard to find someone with appropriate training," she says.

Practice goals also interfered with hiring another extender: Practice leaders want to do more cosmetic procedures, which PAs and nurse practitioners are not qualified to do.

Some smaller practices may not welcome an additional doctor. As long as service to existing patients is not compromised and all partners are happy with the financial side of the practice, Zagorski says choosing not to grow is a valid option.

If, however, the practice administrator knows that patients are unhappy with how long they have to wait for an appointment, with emergency coverage, and with the overuse of the telephone as a way to provide care, then Zagorski recommends doing a patient survey and confronting the physicians with facts and figures. "Doctors don’t always see the big picture," he says. "You have to learn to appeal to the scientists in them."

Cramped quarters

Adding a physician can cause as many problems as it solves, however. For instance, when the new physician comes on board, the space in which Holman’s practice operates will be too small. The practice has discussed expanding to a new location. The new physician initially would work part time in the existing office — where his progress could be monitored — and part time in a new facility, she says. But because the practice is a fully accredited ambulatory surgery center, funding a new office would be expensive. "We might share with another group," she says.

Other options for expansion

There are other ways to expand the space you have without spending money. Holman’s practice, for example, operates on one Saturday and one weeknight per month.

"Whatever you decide to do, you have to know what the critical mass is for the area in which you work," Zagorski says. For his practice, the magic number is 35 to 40 practitioners, with an increasing emphasis on primary care providers. "If you plan effectively and base your growth on research and objective data, you shouldn’t run into many problems."