Investing in executive leadership for your practice

Episode 24: Investing in Executive Leadership for Your Practice

I see far too many practices that underinvest in executive leadership. I can speculate on the various reasons for this, not the least of which are cost and ceding control, which feels uncomfortable. And, as we mentioned in episode 8, we see far too many times where the spouse or another family member is involved in running the practice to the detriment of the business. Perhaps they were installed at the outset when the practice was getting started, and they’ve just stayed. In many cases beyond their usefulness, or their ability. Some are simply not that interested, but they won’t hand over the reins. The practices stagnate or grow much more slowly than they would if they had professional management and leadership.

This is not to say that ALL situations where a family member is involved are horrible, just that many are underperforming.

If this is your practice, it’s time for a heart to heart: is this really what they want to be doing? Are they good at it? Would they rather be doing something else?

Again, I understand the desire to have a trusted family member doing this for you, and it sets up all kinds of odd dynamics, much as you think it won’t, or it won’t happen to you, or you’ll be different… I want to say gently, anyone who is related to the physician owner and has a position of authority creates an odd dynamic plain and simple, just by virtue of the relationship. Now, I don’t want to the known as the podcaster who instigated a whole bunch of divorces by suggesting you make some changes that your spouse may not welcome! I do want to encourage you to do what’s best for your business…in the long run, that’s best for your spouse too.

In thinking about leadership for your practice, there are two distinctly different levels:

The first usually carries the title of Clinic Manager or Practice Manager or Office Manager. In many cases, this is someone who has worked their way up over the years from front office or medical assistant to a lead role, and then potentially into an assistant manager or manager role. Frequently, they don’t have a lot of formal education, although they do have a lot of “street smarts” and good instincts, which has gotten them pretty far! We generally see these folks managing groups of 1-5 physicians and salaries range from $50,000 – 100,000 per year depending on their years of experience and the size and subspecialty of the group.

The second level of leader for clinics are Clinic Administrators or Practice Administrators – this is a higher level of professional, usually someone with more formal education – a Bachelor’s degree at a minimum and frequently a Master’s degree. Most have many years of experience running medical groups, and they may have other degrees and certifications as well. We generally see these people managing groups of 10 or more physicians, and salaries range from $100,000 – 250,000 or more per year depending on their years of experience and the size and subspecialty of the group.

A quick note here – the people in these roles usually make a large distinction between the two levels, although I hear physicians using the titles interchangeably. If you get one thing from this episode, please understand there is sensitivity to titles with many people, and get the distinction: if they have “manager” in their title, it is a lower level position at a smaller clinic (or they manage one location of a much larger group), and if they have “administrator” in their title, it is a higher level position. Same with CEO, COO, or anything else in the C-suite.

There are many different degrees and certifications for people who run clinics – here is a breakdown:

• MBA = Masters in Business Administration – a 2-3 year graduate level program which has a heavy emphasis on finance, marketing, governance, and business strategy
• MHA = Masters in Health Administration – very similar to an MBA, but focused on healthcare
• MPH = Masters in Public Health – somewhat similar to an MHA, but with a focus on public health resources and population management. We see several programs that combine MD with MPH.
• CMOM = Certified Medical Office Manager – a program put out by the Practice Management Institute which ends with a standardized examination
• CMPE = Certified Medical Practice Executive – a program put out by the American College of Medical Practice Executives, which is closely related to the Medical Group Management Association – it involves a standardized examination
• FACMPE = Fellow in the American College of Medical Practice Executives – this is for CMPE’s who submit a professional paper to the College for acceptance, which is akin to a mini-thesis.

So, you may now be asking, why should we spend all that money on someone with more education or certification?

Completion of these programs has provided them additional training in Finance, HR, IT, Patient Care and Safety, Quality, Leadership and we would expect a proven track record as well.

This doesn’t mean that they’ll be a perfect fit for you, but there’s a higher probability

that they will be qualified to do the job and that they will be able to manage expenses, and look for additional revenue for you.

When we recruit, we seek out technically qualified candidates, and we run them through several screens to demonstrate several different skills. Once we’re convinced that they have the technical skills to do the job, we can present them to our clients and our clients’ part of the job is to see who is the best cultural fit. Who do they want to hang out with for the next several years? We recommend this two-step vetting as a recruitment strategy any time you’re seeking a new leader.

I frequently speak with physicians who don’t know what is reasonable to expect from their executive leadership. In short, the person or the team who has been hired to run your practice should be your trusted partner and should be looking out for all aspects of the business part of your practice. He or she should be able to create a budget as we reviewed in episode 3 and then manage the revenue and expenses to perform within that budget. They should continually be seeking out ways to save money, and they should also be on the lookout for new sources of revenue. They should also have human resources skills and knowledge sufficient to manage your team as we discussed in episode 23.

There are many other accountabilities for a highly performing leader, and much of the work can be invisible to the clinicians in the practice, so we recommend listing them in a Leadership Inventory form, so you can determine who has accountability for what. We have an example of a Leadership Inventory at our content website at Medical Money Matters Podcast.com.

As a final note about executive leadership, please remember to conduct an annual performance evaluation of your practice’s leader with a commensurate adjustment in salary each year. Your number one executive partner deserves what he or she will be doing for all of the other staff in the practice. If this is uncomfortable or unfamiliar, I recommend requesting assistance from a local consulting group.

Join me for our next episode where we’ll talk about the strong partnership you form with your executive leader: the powerful leadership dyad.