Managing a medical practice: The ultimate guide

Introduction: What It Takes to Manage a Medical Practice

Managing a medical practice is not for the faint of heart. As with any management or business operation, it requires skills that don't necessarily come with being a medical professional.

Responsibilities typically involve managing the day-to-day operations of the practice, overseeing the finances, ensuring the staff are looked after and the patients receive the care they need. If you're just starting out your first challenge is building airtight processes that are well-defined and can be delegated... so you can focus on putting out fires.

On top of this, managing a medical practice requires a comprehensive understanding of healthcare regulations and compliance in order to function effectively. Given the sheer scale of most medical practices, managing one well can be a big ask.

Why Effective Practice Management Matters

Without effective practice management, a medical business is in danger of falling apart.

That might sound a bit extreme, but keep in mind that most practices are full of people already focused on performing difficult tasks.

Good practice management helps all the big key performance indicators move in the right direction (revenue, staff turn over, and patient satisfaction just to name a few). Poor practice management leads to a whole array of not-so-good-things like legal issues, unhappy patients, and issues keeping the lights on.

Here are five "headlines" of why effective practice management matters.

1. More efficient operations

Proper practice management organises routine tasks such as appointment scheduling, billing, and client communication. This means that practices can be automated, which frees up time for strategic planning and reduces manual admin work.

2. Better experience for patients

When your practice is supported by mature processes and governance, it's easier for your team to provide better service to patients, which makes them more likely to return.

3. Accurate financial management

Practice management ensures that your finances are up-to-date and accurate. Bills get paid on time, money is collected, and you have a clear picture of your financial health. This is a hugely understated challenge in managing any business.

4. Avoiding legal issues

When practice management is in place, you're much less likely to run into legal issues through malpractice or not following the correct rules and regulations.

5. Scalability

When your practice management works, you can grow the business without having to work your team (and yourself as the manager) to the bone.

Challenges in Managing a Medical Practice

Some of the benefits I've covered above overlap with the challenges of managing a medical practice. I don't want to get too bogged down in listing these challenges. However, I'm about to list some tips for managing a medical practice, so it makes sense to provide some context into the challenges you might have to overcome first.

Regulatory Compliance

Healthcare practices need to adhere to a range of regulations, including HIPAA, OSHA, and Stark Law. It can be difficult to keep up with all the ongoing requirements.

Cash flow

Processing claims and ensuring that the practice is being reimbursed for the work they do is a complicated task due to the number of errors and mistakes that can occur.

Staff Management and Retention

The only way to provide well-rounded, quality healthcare over an extended period of time is to build quality processes and hand them off to your staff. But this is easier than it sounds because you first need to attract the right team and then create the right conditions (i.e. paying well, building the right culture, and making staff feel appreciated).

Patient Satisfaction and Retention

Keeping patients happy and ensuring they keep coming back has a lot of variables, and it completely depends on your industry. However, as a general rule of thumb patients expect results served with a smile. If anything along the journey interrupts that goal, you risk the chance of "patient churn" (the opposite of retention).

Technology Integration

Making technology fit your processes usually carries some learning curve and requires workarounds. Even if you're using a software product specifically designed for the kind of work you do (i.e. physiotherapy), you're likely going to have to change how you do business to align with the software.

Then there are the "other" technologies, like patient booking systems, telehealth systems, accounting, patient record management, and the list goes on. As your practice grows, these systems need to speak to each other, or you risk losing a bunch of time on double data entry. Setting up these kinds of integrations can be tricky and expensive.

Data Security

Australian medical records have their own fairly complex handling rules. To start with, they must be stored on Australian soil and be completely secure.

Financial Management

Predicting and managing expenses and revenue isn’t straightforward when running a practice.

Adapting to Healthcare Trends

Keeping up with the latest medical trends can be difficult.

Scheduling Optimization

Ensuring that patients are seen on time and that providers aren’t overbooked is a big task.

Marketing and Patient Acquisition

Attracting new patients and keeping your brand in the public eye is essential to running a successful practice.

Creating the Right "Practice Atmosphere"

As the practice manager, you're responsible (whether directly or indirectly) for the practice fit-out. Meaning the kind of tables, seats, lighting, plants, and decorations that are used in your practice. Patients expect "the best" of everything, so you need to make sure you're keeping up to date with the latest equipment and also creating an inviting and safe atmosphere.

This sounds like an afterthought compared to some of the other challenges, but very few professionals in the health space are also interior decorators or have an encyclopedic knowledge of the current gear.

Tips for managing your medical practice

A well-organised and efficient clinic runs smoothly and will make your job so much easier. For the most part, the success of your practice will rely on the effectiveness of how you manage it.

I've written these tips (in my opinion) their order of importance.

Implementing Standard Operating Procedures (SOP)

An SOP is a set of step-by-step instructions compiled by an organisation to help workers carry out routine operations. For example, what do you do when a patient wants a refund on their treatment? How does a new patient book in? How do you hire a new staff member?

SOPs come with their own challenges. They require a decent amount of effort to set up and maintain, but if you get this part right then scaling your practice becomes much easier.

I don't want to go too deep on how to create SOPs, but I highly recommend you read Buy Back Your Time by Dan Marell or Clock Work by mike Michalowicz. While these books are specifically written for health practitioners, they provide excellent frameworks to guide you on turning your business into a set of SOPs.

Stay on top of legal and ethical compliance

In Australia, the health industry is one of the most heavily regulated sectors. For a medical practice, there are many rules and regulations that you need to follow, and it can be overwhelming.

Unless you've already established a way of staying on top of compliance practices, you might need to invest in software to help, such as Gensolve Practice Manager or PowerDiary (we're not affiliated with either brand). These are practice management software that can help you run a compliant practice.

You may also need to engage a consultant to help guide you through a compliance audit. Compliance audits are an excellent way to ensure you are meeting all your legal obligations.

Streamline Financial Management

Your business should be paying its bills and making a profit, and you should have money in the bank. The problem with financial management is that it can be time-consuming and complex. There's tons to think about and keep visibility over.

One of the best ways to streamline financial management is to invest in good accounting software. Xero is a popular choice (especially for Australian health practices). It helps you manage your accounts, payroll, and invoicing all in one place. It is easy to use and relatively inexpensive.

Build a Strong Team

Assuming that you're running a practice and not just managing a solo operation, you'll need a strong team of people to help it function. Your team will likely consist of a mix of practitioners, administration officers, and marketing staff.

It should go without saying, but all these people need to be good at what they do and be passionate about your business.

The best way to build a strong team is to take your time hiring (fire slow, fire fast!) and make sure that everyone is on the same page. A great resource on this topic is The Ideal Team Player by Patrick Lencioni.

You will also need to have a solid SOP for finding the right candidates, interviewing them and ultimately coordinating their onboarding. This process sounds simple, but it's not. Most large organisations have dedicated recruitment staff for a reason. It's time-consuming and requires a lot of man-management.

Leveraging Technology for Better Practice Management

You can use technology to automate tedious tasks, attract new patients, and run your business more efficiently. We've already mentioned a couple of technologies for financial management and staying compliant, but you can introduce hundreds (even thousands) of other solutions to help manage your business. The question is, what technologies should you be leveraging?

The most obvious places to introduce technology to help with managing your medical practice are practice management software, booking software, and communication systems. These suits are designed to help with a range of common situations you'll run into on a day-to-day basis.

You can also use technology to attract new patients to your clinic. This includes things like a well-presented website, a comprehensive Google My Business profile, and an online booking system.

You can use technology to improve the treatment options in your clinic. This includes investing in the latest equipment and treatment options.

Enhance the Patient Experience

There are many ways you can enhance the patient experience. For starters, you should make your patients feel comfortable, safe, and welcome in your clinic.

Comfort and safety are Alevo's bread and butter. We help improve your patient experience through ultra-high-quality treatment tables and seats. You want your patients to be as comfortable as possible when they are in your care. This will help them feel more relaxed and will go a long way toward enhancing the patient experience.

While this is a self-promotional plug, ensuring your patients are as comfortable as possible should be up the top of your "to do" list.

Optimise Scheduling and Appointments

There are a few different ways you can optimise scheduling and appointments. You can invest in a good scheduling system. This will help you manage your patients’ appointments and make sure your practitioners are getting the most out of their day.

A good scheduling system will also help you reduce no-shows and cancellations (ultimately helping your bottom line).

A booking system won't do everything for you. It's a tool that supports your process, so it's super important to figure out a watertight SOP for booking before you commit to a piece of software.

If you want to get serious about how you handle scheduling, it's worth conducting regular schedule audits. This will help you keep an eye on the performance of your scheduling system and make sure you are making the most out of it.

At the end of the day, the more patients you see, the more money your practice can make. So, getting this part of your operations right is a big deal.

Create a system for managing Inventory and Supplies

I know a lot of the advice we've given boils down to "invest in something to help", but the reality of achieving practice efficiency is leaning on systems to do a lot of the heavy lifting.

Managing inventory is no different. It's worth finding a good inventory management system to help keep track of all your supplies and alert you when you are running low.

These systems let you set a minimum and maximum stock level for all your supplies and ensure you don't get caught running out of important stock. The exception to this advice is if you're running a practice where you almost never carry stock.

As with my last suggestion for scheduling, you'll need to have some kind of SOP in place for inventory management to allow for stocktakes, sending off purchase orders and paying suppliers.

Long-term Marketing for Patient Acquisition

Successful marketing is all about laying the foundations for future growth. Most of the "cost-effective" ways to do this take a decent amount of time to yield results.

Content writing, SEO and social media promotion fall heavily into this bracket, but can be worked to achieve a scaleable patient acquisition engine.

There's too much to unpack within each of these topics to go into specifics in this article. But one concluding thought here is that you need to find what works best for your practice and then commit to it for a minimum of six months.

Outsourcing Non-Core Functions: Billing, HR, and IT

One of the biggest challenges of managing a medical practice is having enough time to do everything. The more responsibilities you can offboard, the more time you'll have for things only you can handle.

Outsourcing is a great way to manage your billing, HR, and IT. When you outsource these functions, you're finding a specialist who is already an expert and will be able to do the job effectively.

Sometimes you'll need to coordinate with these kinds of contractors to make sure they stay "on script", or adhere to your SOP.

Conclusion: Mastering the Art of Medical Practice Management

Doing a great job of managing your medical practice boils down to having solid processes that are supported by the right tooling and used by a committed team. As the manager, it's your responsibility to put these pieces in place and keep them locked together. If you can achieve that, then your practice will run like a well-oiled operation.