7.6.07 - Issue # 278 Forward This Newsletter To A Colleague

Nancy Caudill
Senior Consultant
McKenzie Management
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Is Your Employee ‘Outstanding’ in Your Field?

Dr. Sam Stout – Case Study #127

  • Dr. Stout owns a general family practice in a midsize community in the western half of the United States.

Dr. Stout came to McKenzie Management with several concerns but one issue that was really nagging at him was expressed this way:

 “I have an employee that has been with me for 8 years.  I haven’t given her a raise for the past 2 years for various reasons.  She is asking for one now and I feel that we need to evaluate her salary.  I don’t want to pay her more than the “going rate” in our town.”

It is important to observe that experienced, peak performing, “top notch” employees generally are not paid… “going rate”.

Let’s look at some practice facts for Dr. Stout:

Dr. Stout’s practice facts:

  • 15-year old established practice
  • Renee, the Practice Coordinator has been with the practice for 8 years
  • Collection to Production percentage is 98.5%
  • Accounts Receivable ratio to Net Production is 1.2
  • Hygiene Retention is 85%

Renee was Dr. Stout’s only business employee and it was obvious during the on-site analysis of Dr Stout’s systems that she was good at what she did.  As I continued to analyze the practice statistics, it was also obvious that she knew how to collect money, stay on top of insurance claims, keep the hygienists and doctor busy, and manage the accounts receivables.

At dinner on Monday evening after spending the day with Renee, I said to Dr. Stout, “Doctor, Renee is an outstanding employee.  Did you know that?” 

“Well, the patients really like her and she has been loyal to me.  She always comes in on time and doesn’t miss very much work due to illness.”

Now doctors, this is NOT the definition of an “outstanding” employee.  This better describes the doctor’s pet dog…loyal, comes when you call, seldom sick, etc.! Dr. Stout has a Practice Coordinator that is out-performing many employees in a similar position and he doesn’t even know it.  I explained to Dr. Stout what  makes Renee outstanding:

Outstanding Practice Coordinator Abilities:

  • Patient retention at 80% or better
  • Accounts Receivables at 1x or less the monthly NET production dollars
  • At least 10 reactivated past due recall patients per month
  • No more than 12 % of the total A/R over 90 days
  • No outstanding insurance claims over 60 days
  • Collecting at least 45% “over the counter” at the time of service
  • …and she still has the time and patience to be professional and pleasant to everyone

THIS is an outstanding employee.  What is sad is that Dr. Stout didn’t even know that he had a special employee because he was not monitoring the performance of the practice, including the performance of his staff.  If he had, he would know what kind of work she was doing for him.

McKenzie Recommendations:

  • Review the % of staff gross wages compared to the practice collections for the past 12 months. The percentage should fall within the normal range of 19-22%.
  • Be proud of the fact that he has such a great employee and pay her for her performance.  It is NOT important to pay her the “going rate”….she deserves more that the average employee in your area doing what she does.
  • Dr. Stout was provided with an Employee Salary Review form to help him determine how much you can increase her salary and still maintain your gross salary overhead expenses to around 20%.  With an employee such as Renee, push your goal to 22%.  Not only is she worth it, but you should see a return on investment with system goals and monitoring.

Conclusions:
Dr. Stout is an example of a doctor that has outstanding performers in his office and he doesn’t even know it.  It is imperative that you monitor your practice statistics to determine how your staff performs AND you reward them accordingly.

Many times a doctor will have an employee that is performing “within normal limits”, not outstanding, but they perform well enough that you don’t dismiss them.  They should be paid accordingly.

Please don’t leave your exceptional employee “standing in your field” getting rained on!  She/he will seek shelter elsewhere and you will be the loser.  Give them the umbrella that they deserve!

If you would like more information on how McKenzie's Practice Enrichment Programs can help you IMPLEMENT proven strategies….. email info@mckenziemgmt.com.

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