Project: Practice Turn Around

Practice Description: Surgical practice - 8 physicians w/ extensive ancillary services.

Project Term: 10 Months

Existing Situation:

• Practice experienced significant overhead increases during previous 2 years.  Overhead reached 44% during previous 12 month period.
• Billing Department was struggling with a Days in Accounts Receivable of 112.85. 
• Problems in Human Resources including 25% annual turnover and a net increase in employees of 22% and 28% increase in payroll over the previous 12 month period.
• Partner physicians were frustrated with inconsistent cash flow, perceived inefficiencies and lack of information/expertise to evaluate management performance.
• Practice CEO had added department managers and line managers to insulate her from front line employees.
• Practice had no formal strategic plan and no method to evaluate opportunities for expansion of services.

• Developed new operational reporting structure to evaluate performance.
• Designed and implemented performance benchmarks for all departments and employees with corresponding evaluation criteria.
• Created strategic plan to include expansion of ancillary services and addition of two surgeons over the following three years.
• Imposed moratorium on all hiring without partner approval.
• Taught CEO to better lead and manage employees, reduce bureaucracy and cultivate employee skills.
• Identified and implemented cost control strategies to reduce overhead.
• Implemented practice wide standards of operation to maximize billing efficiency.
• Implemented billing department standards to improve collections and initial claim accuracy.

• Practice overhead reduced to 36% in first 12 month period following start of project.
• Days in Accounts Receivable reduced to 48.62 after six months; 42.59 after twelve months.
• Practice staff reduced by 18%; payroll reduced by 22% via attrition.
• Enhanced net cash flow of practice by more than $2,000,000 during first 12 month period.
• Physicians enjoy reporting and performance benchmark structure providing understanding of current practice performance.
• CEO provides better leadership to employees and better understands the priorities of the partners.

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