Thinking about recruiting a clinician? Hiring one may be an excellent idea, especially if you're juggling a heavy workload and want to grow your practice.
However, before you place ads on job boards and conduct interviews, ask yourself this key question: Can you afford to pay another clinician and run a profitable practice?
Unsure about the answer? Read on to discover best practices to follow when hiring employed clinicians.
Hiring a new clinician could be a boon for your practice. But it could also spell doom and prove to be a costly mistake if you don't do the math, says PCC's Chip Hart.
''Your goal when hiring a new associate should be to boost profitability, or at least break even, and see more patients,'' Hart says. ''You should never take a financial loss to hire an additional clinician without expecting to become profitable in a short time.''
As a rule of thumb, Hart recommends that the total remuneration for an employed clinician shouldn't exceed 30% of the revenue the clinician generates.
Why? On average, medical practices spend between 60% and 70% of their annual revenue on overhead costs such as medical supplies, rent, and software. So, if you allocate a substantial amount of your practice's revenue towards salaries, it will affect your profit margin.
Sure, you may want to offer lucrative salaries to attract the best talent and edge out other practices searching for talent. However, you shouldn't offer wages based on what other practices are paying.
''It doesn't matter what your competitors are offering. Ultimately, as a medical practice owner, you need to maintain profitability. Otherwise, you'll dent your practice's bottom line,'' says Hart.
Crunching the figures and evaluating your margins is just one part of the jigsaw puzzle when it comes to employing a new physician. Next, you'll want to hire a suitable candidate, as hiring the wrong one could cost your practice nearly $17,000 annually. Ideally, you should hire a candidate whose personality, work ethic, and medical knowledge match those of your practice.
When interviewing candidates, pay close attention to what they value other than money. Why? Nowadays, more employees are searching for personal value and purpose-driven work, even at the expense of generous wages.
''Employee clinicians today value flexible schedules and time off as much as money. So, when you talk about cash, talk about other non-monetary perks too,'' says Hart. Assessing other motivations will help you come up with the perfect compensation package.
Medical practices compensate employed clinicians in various ways. While there's no one-size-fits-all payment model that's suitable for all practices, here are some common payment models you may want to consider for your pediatric practice:
Nearly 33% of medical practices use a straight salary payment model. This means they offer clinicians a fixed wage with no additional incentives.
While a straight salary model can be beneficial for financial forecasting and planning and provide a stable income for clinicians, it may not fairly compensate physicians who see many patients or consistently exceed expectations.
Many group medical practices pay employed clinicians based on the number of patients they see. In fact, volume-based compensation is the most common payment model for more than eight out of ten primary care physicians.
Regardless of the popularity of volume-based compensation, the emphasis on healthcare reform has led to more medical practices offering productivity-based compensation. This compensation model compensates clinicians based on their performance.
While productivity-based compensation can lead to enhanced patient care and physician productivity, implementing it can be challenging and may require careful tracking of particular metrics.
That said, some common key performance indicators for pediatric practice you may want to monitor to determine the performance of employed clinicians include:
Many medical practices use hybrid payment methods, such as salaries with bonuses or a fixed fee visit with productivity bonuses. In fact, around 61% of practices use a salary with bonuses payment model. This model rewards clinicians based on metrics such as revenue generated, patient volume, or patient satisfaction.
While hybrid payment models can incentivize clinicians to work harder and boost morale, they can affect your profitability if your practice doesn't perform well financially. They can also be more challenging to implement than single-payment models.
Hiring a suitable clinician and running a profitable pediatric practice can be challenging. But it doesn't have to be.
At PCC, we have over three decades of experience offering revenue cycle management solutions designed to streamline your financial operations so you can focus on what matters most — providing quality patient care. Contact us today to learn more about how we can improve your practice's efficiency.