Many orthopedic surgeons have outstanding clinical skill and technique in the operating room, but that doesn't always translate to great business sense and group leadership. Orthopedic surgeons who have aspirations of becoming leaders in their group can take extra steps to achieve a higher level of understanding about the business side of their practice. Here, surgeons and industry experts discuss how surgeons can position themselves as future group leaders.
1. Align yourself with other professionals. It's important that physician leaders align themselves with other types of professionals to run a successful business. "My partner and I have created a very successful business model and one of the reasons we have been successful is through our alignment with outstanding managers and staff," says Matthias Wiederholz, MD, an interventional pain physician and founding partner of Performance Spine & Sports Medicine in Lawrenceville, N.J. "Don't try to have a full-time clinical schedule and expect to be full-time leaders as well."
One of the biggest factors in the long-term success of orthopedic groups is the ability to bring in a non-medical CEO to guide the physicians in making business decisions for a profitable practice.
"You need someone who is outside of medicine to bring the true business sense to the table and balance the physicians' good clinical sense," says Craig Levitz, MD, a principle of Orlin & Cohen Orthopedic Associations and director of sports medicine and chairman of the department of orthopedics and orthopedic surgery at South Nassau Communities Hospital in Oceanside, N.Y. "We have a lawyer who is our CEO. Once we make clinical decisions, he advises us on the profitability of those decisions. He also makes sure we have proper legal advice so we aren't violating Stark laws or other regulations."
2. Stay updated on industry trends and regulations. For physicians who are primarily focused on their clinical practice, going back to school and earning an MBA may be difficult. Instead, discussing business transactions with non-medical professionals is helpful. Surgeons can also learn about management tips and trends from reading online articles referred by knowledgeable health care administrators. Alexander Vaccaro, MD, PhD, an orthopedic spine surgeon at Philadelphia-based Rothman Institute and Thomas Jefferson University, says that Rothman CEO Mike West provides practice partners with education and guidance on business issues through sharing oral presentations and written articles.
"When we began our practice, none of our partners had formal business background," says Dr. Vaccaro. "Mike West was able to teach us about the reality of acquisitions, changing regulations and healthcare legislation. Now he sends us e-mails twice per week with different articles about ASC management, business models, ect."
3. Find a mentor. Young orthopedic and spine surgeons who aspire to become leaders someday should work with a mentor whose leadership they admire. The mentor is often a senior partner in the group or orthopedic surgery department head. "Young surgeons can learn from the successes and failures of their mentor," says Jay Geer, principal at Miller Geer & Associates, Los Angeles-based public relations and marketing communications firm specializing in health. "Physicians who are already leaders must be able to compromise, consensus build and negotiate with others; all these skills are important for future leaders to refine."
In addition to working closely with a single mentor, young physicians can surround themselves with positive leaders and take note of their skills. "The more positive influences you have available to you, the more likely you will become a strong and effective leader," says Dr. Wiederholz.
4. Join professional committees. Young physicians don't become practice president right out of medical school, but they can position themselves for this role by joining committees within hospitals or professional societies. Now more than ever, hospitals are seeking physicians to participate in committees focused on cost-savings, efficiency, infection control and patient satisfaction. Professional societies also need surgeons volunteering their time to make sure the organization runs smoothly.
"Participating in different committees, with the professional societies or other functions in the community, is one way physicians can exercise their management skills and learn more about leadership," Mr. Geer says.
This preparation can start as early as the physician's medical school and residency training. "If you are a resident physician, strive to be the chief resident," says Dr. Wiederholz. "If you are in an academic position, strive to be a department head. Take on the challenge of leadership before you move into private practice."
5. Become familiar with your expenses. Physicians who take on the responsibilities of running a practice must have a good understanding of the group's expenses. Expenses can include salaries for practice staff, outsourced management services, office materials, utilities, taxes and building expenses. When negotiating these rates, group leaders must know industry standards so they don't lose money in the long run.
"Real estate professionals love to work with physicians because physicians will sign the worst leases in the world," says Dr. Levitz. "Physicians are smart and think they can write a lease themselves without a lawyer involved, but they are taken advantage of."
Once the physician has an understanding of what the expenses are, they must know where the capital for expenses is coming from, especially if your group has taken a lien of credit. "I have seen physician practices where they kept taking money from a lien of credit to pay their expenses," Dr. Levitz says. "They thought they were making a profit but they were literally losing money every month. You really have to understand your expenses."
6. Understand how you are paid. Learning about practice cash flow is an important first step in understanding the financial side of your business. If surgeons can track where the money is coming from and where it goes, they are more likely to make good business decisions in addition to good clinical decisions.
"Nobody would start a business without any idea of how much money they are taking in — but doctors do that all the time," says Craig Levitz, MD. "Keeping an eye on cash flow will allow you to be paid the maximum amount for what you are doing, and your data will help you maximize your time."
For example, Dr. Levitz says some surgeons might find that contracted reimbursement for procedures they focus their practice on, such as hip arthroscopy, might not cover the time, effort and material necessary to perform it. Physicians must be aware of this situation and devise a plan for solvency.
7. Keep track of payor contracts. Know what each payor contract pays for different procedures and follow up with those claims to ensure maximum reimbursement, says Dr. Levitz. "Understanding how you are paid really boils down to understanding what your contracts with providers are," he says. "You have to know what is in those contracts and what your responsibilities are in signing them. There needs to be follow up to make sure you are getting paid agreed upon rates. Using all this data, you should have a sense of how much you are making per hour."
When surgeons know their reimbursement rates for each carrier, they can become experts on their coverage. When you are paid at a lower than contracted rate, you must know when to challenge the claims, says Dr. Levitz.
8. Stay business-minded, even with charitable cases. Many physicians, like Dr. Levitz, believe charitable cases are necessary in certain circumstances to provide the type of care patients need. For example, if a patient who can't walk needs durable medical equipment that isn't covered by the insurance company, Dr. Levitz may provide it anyway. However, physicians must understand the economics of their situation before providing charity care to remain profitable despite the loss.
"You have to do things for free and give them away because we don't want to lose the flavor of who we are as physicians," he says. "But you also have to be a smart business person — you can't just provide these things for free because it might be convenient."
9. Learn to get along with other people. There have been many instances of large orthopedic groups imploding because the top leaders were constantly at odds with each other, says Mr. Geer. Successful practice leaders have positive relationships with their partners and colleagues, which is why they are able to sustain a position of power.
"Traditionally, orthopedic, spine and neurosurgeons are really independent," says Mr. Geer. "If you are part of a group, you have to get along with the other partners and be able to make business decisions together. Orthopedic and spine physician leaders must be the glue that holds the group together."
Staying at one practice for several years helps physicians grow into the spot where they can work with others because they have demonstrated a commitment to the group. "The successful surgeons have been around a long time and understand how important it is to have good chemistry among the partners," says Mr. Geer.
10. Gain the respect of those around you. Physicians who want to become strong leaders must gain the support of their partners, which begins with gaining the support of the practice staff. One of the best ways to gain support from the people you work with is by treating them respectfully. "If you provide respect to all your team members, I think you will get the same respect back," says Dr. Wiederholz. "The foundation of every good leader is respect for their colleagues."
As managers, physicians also need to understand how to handle a situation when a problem occurs. Good physician leaders will take it upon themselves to fix the problem instead of placing blame on others. "When things go wrong, it's management's fault, not the staff's fault," says Dr. Wiederholz. "I think that's one of the most common mistakes managers make — not taking responsibility for things that go wrong."
Related Articles on Orthopedic Practices:
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1. Align yourself with other professionals. It's important that physician leaders align themselves with other types of professionals to run a successful business. "My partner and I have created a very successful business model and one of the reasons we have been successful is through our alignment with outstanding managers and staff," says Matthias Wiederholz, MD, an interventional pain physician and founding partner of Performance Spine & Sports Medicine in Lawrenceville, N.J. "Don't try to have a full-time clinical schedule and expect to be full-time leaders as well."
One of the biggest factors in the long-term success of orthopedic groups is the ability to bring in a non-medical CEO to guide the physicians in making business decisions for a profitable practice.
"You need someone who is outside of medicine to bring the true business sense to the table and balance the physicians' good clinical sense," says Craig Levitz, MD, a principle of Orlin & Cohen Orthopedic Associations and director of sports medicine and chairman of the department of orthopedics and orthopedic surgery at South Nassau Communities Hospital in Oceanside, N.Y. "We have a lawyer who is our CEO. Once we make clinical decisions, he advises us on the profitability of those decisions. He also makes sure we have proper legal advice so we aren't violating Stark laws or other regulations."
2. Stay updated on industry trends and regulations. For physicians who are primarily focused on their clinical practice, going back to school and earning an MBA may be difficult. Instead, discussing business transactions with non-medical professionals is helpful. Surgeons can also learn about management tips and trends from reading online articles referred by knowledgeable health care administrators. Alexander Vaccaro, MD, PhD, an orthopedic spine surgeon at Philadelphia-based Rothman Institute and Thomas Jefferson University, says that Rothman CEO Mike West provides practice partners with education and guidance on business issues through sharing oral presentations and written articles.
"When we began our practice, none of our partners had formal business background," says Dr. Vaccaro. "Mike West was able to teach us about the reality of acquisitions, changing regulations and healthcare legislation. Now he sends us e-mails twice per week with different articles about ASC management, business models, ect."
3. Find a mentor. Young orthopedic and spine surgeons who aspire to become leaders someday should work with a mentor whose leadership they admire. The mentor is often a senior partner in the group or orthopedic surgery department head. "Young surgeons can learn from the successes and failures of their mentor," says Jay Geer, principal at Miller Geer & Associates, Los Angeles-based public relations and marketing communications firm specializing in health. "Physicians who are already leaders must be able to compromise, consensus build and negotiate with others; all these skills are important for future leaders to refine."
In addition to working closely with a single mentor, young physicians can surround themselves with positive leaders and take note of their skills. "The more positive influences you have available to you, the more likely you will become a strong and effective leader," says Dr. Wiederholz.
4. Join professional committees. Young physicians don't become practice president right out of medical school, but they can position themselves for this role by joining committees within hospitals or professional societies. Now more than ever, hospitals are seeking physicians to participate in committees focused on cost-savings, efficiency, infection control and patient satisfaction. Professional societies also need surgeons volunteering their time to make sure the organization runs smoothly.
"Participating in different committees, with the professional societies or other functions in the community, is one way physicians can exercise their management skills and learn more about leadership," Mr. Geer says.
This preparation can start as early as the physician's medical school and residency training. "If you are a resident physician, strive to be the chief resident," says Dr. Wiederholz. "If you are in an academic position, strive to be a department head. Take on the challenge of leadership before you move into private practice."
5. Become familiar with your expenses. Physicians who take on the responsibilities of running a practice must have a good understanding of the group's expenses. Expenses can include salaries for practice staff, outsourced management services, office materials, utilities, taxes and building expenses. When negotiating these rates, group leaders must know industry standards so they don't lose money in the long run.
"Real estate professionals love to work with physicians because physicians will sign the worst leases in the world," says Dr. Levitz. "Physicians are smart and think they can write a lease themselves without a lawyer involved, but they are taken advantage of."
Once the physician has an understanding of what the expenses are, they must know where the capital for expenses is coming from, especially if your group has taken a lien of credit. "I have seen physician practices where they kept taking money from a lien of credit to pay their expenses," Dr. Levitz says. "They thought they were making a profit but they were literally losing money every month. You really have to understand your expenses."
6. Understand how you are paid. Learning about practice cash flow is an important first step in understanding the financial side of your business. If surgeons can track where the money is coming from and where it goes, they are more likely to make good business decisions in addition to good clinical decisions.
"Nobody would start a business without any idea of how much money they are taking in — but doctors do that all the time," says Craig Levitz, MD. "Keeping an eye on cash flow will allow you to be paid the maximum amount for what you are doing, and your data will help you maximize your time."
For example, Dr. Levitz says some surgeons might find that contracted reimbursement for procedures they focus their practice on, such as hip arthroscopy, might not cover the time, effort and material necessary to perform it. Physicians must be aware of this situation and devise a plan for solvency.
7. Keep track of payor contracts. Know what each payor contract pays for different procedures and follow up with those claims to ensure maximum reimbursement, says Dr. Levitz. "Understanding how you are paid really boils down to understanding what your contracts with providers are," he says. "You have to know what is in those contracts and what your responsibilities are in signing them. There needs to be follow up to make sure you are getting paid agreed upon rates. Using all this data, you should have a sense of how much you are making per hour."
When surgeons know their reimbursement rates for each carrier, they can become experts on their coverage. When you are paid at a lower than contracted rate, you must know when to challenge the claims, says Dr. Levitz.
8. Stay business-minded, even with charitable cases. Many physicians, like Dr. Levitz, believe charitable cases are necessary in certain circumstances to provide the type of care patients need. For example, if a patient who can't walk needs durable medical equipment that isn't covered by the insurance company, Dr. Levitz may provide it anyway. However, physicians must understand the economics of their situation before providing charity care to remain profitable despite the loss.
"You have to do things for free and give them away because we don't want to lose the flavor of who we are as physicians," he says. "But you also have to be a smart business person — you can't just provide these things for free because it might be convenient."
9. Learn to get along with other people. There have been many instances of large orthopedic groups imploding because the top leaders were constantly at odds with each other, says Mr. Geer. Successful practice leaders have positive relationships with their partners and colleagues, which is why they are able to sustain a position of power.
"Traditionally, orthopedic, spine and neurosurgeons are really independent," says Mr. Geer. "If you are part of a group, you have to get along with the other partners and be able to make business decisions together. Orthopedic and spine physician leaders must be the glue that holds the group together."
Staying at one practice for several years helps physicians grow into the spot where they can work with others because they have demonstrated a commitment to the group. "The successful surgeons have been around a long time and understand how important it is to have good chemistry among the partners," says Mr. Geer.
10. Gain the respect of those around you. Physicians who want to become strong leaders must gain the support of their partners, which begins with gaining the support of the practice staff. One of the best ways to gain support from the people you work with is by treating them respectfully. "If you provide respect to all your team members, I think you will get the same respect back," says Dr. Wiederholz. "The foundation of every good leader is respect for their colleagues."
As managers, physicians also need to understand how to handle a situation when a problem occurs. Good physician leaders will take it upon themselves to fix the problem instead of placing blame on others. "When things go wrong, it's management's fault, not the staff's fault," says Dr. Wiederholz. "I think that's one of the most common mistakes managers make — not taking responsibility for things that go wrong."
Related Articles on Orthopedic Practices:
8 Big Questions on Orthopedic Practice Management Answered
Low Cost Orthopedic Implants: 5 Things to Know About Buying at Wholesale Price
10 Marketing Strategies Orthopedic Practices Can Apply Now