Practice strategy: The master plan for GPs and specialists to address the practice management insufficiency of their businesses

Facts and Figures from the German Health Care System

What it’s all about

In the search for development opportunities and future chances of outpatient health care, one central starting point and design parameter is usually not taken into account: practice management. But its quality is currently in a bad way. This white paper describes why practice management is so important and what GPs and specialists can do against its insufficiency.

1 Practice management as a prerequisite for needs-based patient care

The term „practice management“ refers to the totality of all regulations, instruments, measures and behaviour,

  • which are used in the action areas of planning, organisation, market research, leadership and cooperation, time and self-management, patient management, marketing and financial management of medical practices of all disciplines and
  • whose interaction guarantees the operation of the practice.

Practice management functions as a transmitter of the medical competence of physicians, the activities of medical assistants and the resources used into the actual care of patients. It depends on the quality of its organisation

  • the extent to which the skills of the doctors and the abilities of the staff are made available to the patients in the form of comprehensive assistance,
  • it also determines how quickly practice teams can react to changes of any kind, implement them and benefit from them (example: digitalisation),
  • and last but not least, it affects costs, turnover and profit.

In this context, smoothly functioning practice management is based on the implementation of the best practice standard, i.e. the systematic use of business management methods, instruments and management behaviours that ensure that internal and external requirements for practice work are met.

2 Practice Management Insufficiency (PMI)

If practice management is not capable of organising practice operations in such a way that they meet the requirements of everyday work and basically function smoothly, this is referred to as practice management insufficiency (PMI). The reason for its occurrence is that

  • the selection of precautions taken and measures implemented is incomplete and / or incorrect, or
  • their implementation is inadequate and / or incorrect.

This creates a vacuum, because internal and external requirements for practice work are not adequately met.

3 Causes

Interviews and market research surveys with and of GPs as well as specialists uncovered a number of reasons that – isolated or in combination – cause practice management insufficiency and make it a systemic disease:

Inadequate know-how

Management techniques are still not a comprehensive part of medical training and physicians deal with the topic only little on their own initiative. But even doctors‘ interest groups do not vigorously pursue appropriate knowledge transfer, and practice management is not given adequate importance. Since doctors in private practice pay a lot of attention to guidelines and standards, they therefore receive a completely wrong and unrealistic signal.

Missing understanding of the system

Practice management is based – as already described – on different areas of action that are interconnected and mutually dependent. Changes in one area on the one hand have an impact on the other action sectors, but often also require corresponding adjustments there in order to be able to work synergistically. Practice owners are not aware of these interactions and hardly pay attention to them. They usually think of problems in monocausal terms, try to identify „the“ malfunction of practice management and eliminate it with the help of individual measures. However, practice management is a multifactorial process that must be examined in its entirety.

Too little analysis activity

  • So far, only thirty percent of general practitioners and specialists have conducted a professional practice analysis, and the realisation rate of other surveys is even lower.
  • If analyses are carried out, the wrong methods are often used, for example school grade scaling in satisfaction surveys, so that the results are misleading. Another mistake is to focus on symptoms instead of causes.
  • Overall, reliance on one’s „gut feeling“ dominates instead of generating and using objective data. If patients or staff do not complain, it is assumed that no problems exist.
  • This results in extreme discrepancies between self-perception and the perception of others. For example, two thirds of the practice owners believe that they manage their staff well, but only 20% of the MFAs confirm this assumption.
  • Likewise, external influences – keyword „bureaucracy“ – are blamed for problems that occur. It is certainly annoying, but calculable and can therefore be planned into processes, so it is not a PMI cause.
  • Another argument is that the number of patients is too high. This impairment of practice operations can certainly occur on a seasonal basis, e.g. in times of flu or in regional monopoly situations. In the long run, however, the situation is an expression of a misalignment of practice management, triggered by inappropriate ordering behaviour or too few staff.
  • In addition, many practice owners and MFAs face the problem that the work overload caused by PMI does not allow them the freedom to carry out optimisation analyses.

Rejection of business management views

„I am a doctor, not a businessman!“: Physicians in private practice have an extremely distant relationship to the term „business administration“. This is mainly due to a profound misunderstanding, because

  • most associate it solely with financial management („…my tax consultant takes care of that…“),
  • a primarily monetarily motivated medicine
  • and/or demands for a rigorous economisation of the health system.

Overall, the term and everything associated with it are rejected as rather unethical. But this is a mistake, because 2/3 of the activities in medical practices follow the rules of business administration.Designed as an aid

  • systematises the actors participating in the economic process,
  • points out principles according to which they can act in their sector and field of activity, and
  • provides methods, instruments and ratios in order – depending on the individually chosen principle of action – to organise the work as optimally as possible.

Business management is thus free of demands and specifications and provides aids for the work content of the individual company, e.g. for a medical practice, to optimally fulfil the goals of the practice owners – qualitatively (e.g. quality of care) as well as quantitatively (e.g. practice profit) (best practices).

Negotiating the entrepreneurial status

In the business management system, medical practices are service businesses, as opposed to production businesses. In this context, the term „entrepreneurial practice management“ refers to the systematic use of validated methods, instruments and behavioural patterns in general practitioners‘ and specialists‘ practices, which, taking into account the practice’s objectives, are both future-proof and flexible in order to

  • the best possible quality of medical care for patients,
  • a balanced and motivating quality of work for doctors and medical assistants as well as
  • economic success.

This form of practice management is geared towards always being able to act proactively and successfully in the multi-layered events of the health care system with all its imponderables – and not only being able to react passively without greater freedom of decision. However, very few doctors adapt the entrepreneurial role for themselves and use the tools.

Little willingness to change

„We have always done it this way.“ is a belief system that shapes the German medical profession. This is also reflected in the results of staff surveys, in which female staff complain that their practice managers hardly respond to their suggestions for improvement and requests for change. A further indication is the fact that in most practices the management has not been adapted, or only insignificantly, since the founding, takeover or cooperation.

4 Symptomatology

The first symptoms of PMI appear insidiously at first, in the form of anger, stress and dissatisfaction, both within the team and on the part of the practice visitors. They are usually attributed to individual work situations, but increase in intensity as they progress.The main symptoms of PMI are:

  • Permanent lack of time
  • Frequent overtime
  • Increasing work pressure
  • An increasing error rate
  • Dissatisfied patients
  • Conflicts in the practice team
  • Demotivation.

In addition, there are also symptomless progressions that arise from hidden risk factors and that only become effective in the medium to long term, but then abruptly.

5 Degrees of PMI

Based on the descriptions of doctors and medical assistants as well as patients and – in the case of specialist practices – referring physicians, PMI can be roughly divided into four PMI grades:

  • PMI Grade I

Practice teams report no major problems occurring during their work, but risk factors exist but have not yet taken effect.

  • PMI Grade II

Physician/doctor and staff members are continuously exposed to recurring problems in their work performance. However, they are not yet perceived as very serious and affect the quality of work only to a lesser extent.

  • PMI Grade III

The practice management is characterised by a multitude of daily occurring problems, which in their interaction have a permanent and noticeable effect on the quality of work, the practice team itself and the patients. The working atmosphere is characterised by changing intensities of hecticness and stress, first patients complain, work remains partially undone.

  • PMI Grade IV

Practice teams are hardly able to cope with the daily workload. There is a lot of overtime, patients are constantly leaving, and the influx of new patients is disproportionately low.

6 The PMI and its consequences for medical practices

The type and intensity of the effects of a PMI vary from practice to practice depending on the respective causes and their manifestations, but the most common are the following five general consequences:

  • Patient care and support are worse than they could be, because medical services do not fully benefit patients. For example, doctors who are under time pressure interrupt their patients‘ symptom descriptions after only a few seconds and make decisions without knowing all the facts. In addition, there are information and communication deficits in the cooperation with other service providers.
  • The workload of the team is greater than necessary, they work long hours, but the work result is only below average in comparison, because the work is unmanageable. Efficiency and productivity of the practice team are limited, creating a hamster wheel effect. Over time, staff develop mechanisms to deal with PMI and its consequences, but these selective adjustments do not solve the underlying problems. In some cases, they even exacerbate the negative PMI effects.
  • PMI generally limits the performance and development possibilities of a practice, because important activities are neglected because there is no time for them (e.g. qualification of the MFA, implementation of necessary changes, etc.), flexibility and responsiveness decline, as does work motivation.
  • The evaluation of the practice’s performance deteriorates due to a successively growing dissatisfaction of the patients, and the willingness to recommend the practice to others also decreases.
  • The practice result does not correspond to the possibilities.

7 The prevalence of PMI

About 2/3 of German medical practices are affected by PMI in varying degrees and manifestations. This large number results from the fact that general practitioners and specialists on average do not even use 50% of the precautions necessary for a smoothly functioning practice.

8 Diagnostics and therapy

The central problem for GPs and specialists is therefore primarily that „the“ practice management is a conglomerate of many different areas of action that are closely interlinked and to a large extent condition and influence each other. Only when these areas – from planning to patient management, leadership, organisation to marketing, market research and controlling – mesh like finely tuned cogs, management excellence is achieved.On the positive side, most misalignments – once recognised – can be corrected by the organisation itself without outside help. The problem is therefore not the concrete optimisation, but the identification of the causes of insufficiency.

Classical solutions only help to a limited extent

In this context, the application of tips, tricks and advice provided to practice owners by various sources does not lead to a noticeable change in their work, because this is – as described – only possible in a holistic way.

Seminars sometimes impart knowledge on individual or several of these interdependencies, but the contents inevitably follow the principle of „one-size-fits-all“, so that the participating doctors – returning to their practices – have increased knowledge, but still no plan for concrete action.The last resort is to use consultants, but a complete analysis of the practice management is too expensive for many doctors.

Back to the beginning

A general practitioner or specialist who wants to improve, develop or realign his practice management in the context of his goals, or simply improve his practice results, first needs a status description of his work. The concept of key performance indicators (KPIs) is particularly suitable for this purpose, as it

  • solves the aforementioned problem of the complexity of practice management by generating orientation parameters,
  • offers the possibility of determining the actual state of practice management without great effort and
  • at the same time identifies strengths, but also deficits as well as unused opportunities and risk factors.

With the results of this initial analysis, concrete target parameters for the practice work can be defined and monitored and controlled simply but comprehensively in perspective by means of follow-up examinations.

How the indicators are created

KPIs are parameters that are created by comparing the practice management data of a medical practice with objective and representative measured variables. For this purpose, with the help of structured analysis forms (doctor, staff, patients, referrers, if applicable), the design of the practice management is first described and made quantifiable in the later evaluation by means of scaling. In this way, not only the type and intensity of the regulations used for practice management are recorded, but also their effects, so that a kind of X-ray image of the practice work is created.

Insights via benchmarking

This information is then subjected to a best practice and a specialist group benchmarking. The best practice comparison shows whether all the regulations, instruments and behavioural patterns that ensure smooth practice operation are actually implemented. The specialist group ratio provides additional information on the extent to which the practice management under investigation meets the minimum market standard. From the KPIs determined

  • results in a detailed status overview of the strengths, weaknesses, threats and opportunities of the examined practice with a detailed action plan for improvements, changes and developments, furthermore
  • individual practice management development goals can be formed on the basis of the practice strategy and monitored with regard to progress in implementation.

Thus, a KPI status report corresponds to a balanced scorecard for practice management.

„Easy-to-use“ and „Ready-to-go“

The special feature of the KPI concept is that the collection of the necessary information can be done using simple questionnaires alone without the need for an on-site consultant. The doctor’s questionnaire takes about 30 minutes to complete, the staff questionnaire is completed in about 20 minutes. This is supplemented by a patient survey in which up to 100 practice visitors can be interviewed. No specialist knowledge or supplementary materials are required to complete the documents.

KPIs open up choices

On the basis of the KPI status report created from the questionnaire data and the associated action plan, practice owners are able to decide whether they want to implement the listed suggestions themselves with their teams or resort to external help. In the second case, the prior preparation of the Balanced Scorecard leads to a significant cost saving, as the consulting objective for external help can be precisely delimited and defined.

The instrument for determining KPIs

The instrument suitable for determining KPIs is the Practice Management Comparison©. The analysis determines all practice-relevant indicators without the need for an on-site consultant and, in addition, an average of almost 40 possible improvements for the practice work.