Mastering the medical mindshift: Professional practice management is always business-based

Data, facts and instruments on the German health system

What it’s all about

Physicians in private practice have a distant to negative relationship to the term „business management“. Ignorance and prejudice are mainly responsible for this. But this attitude means that important tools that can acutely improve patient care, ensure the flexibility needed for transformation in the medium term and secure the success of the practice in the long term are not used.

Most of the work in medical practices is of a business management nature

„Business management, that’s what the accountant does!“
„The care of my patients cannot be expressed in key figures!“
„Economisation is damaging medicine!“
„I am a doctor and not an entrepreneur!“

Most practice owners do not realise that the quality of patient care is not only determined by their medical skills.

is not only determined by their medical skills,
but above all by the quality of practice management, i.e. by the way diagnostic and therapeutic services are transferred to patients.

The work of a medical practice is business management-based

Two thirds of the work in the „service enterprise of a medical practice“ is of a business management nature and can be designed through associated methods and instruments in such a way that a largely smooth functionality is created (best practice standard). This includes not only areas of action such as planning including the development of a practice strategy, but also market and patient research, personnel management, marketing, organisation and communication up to accounting and controlling.

The doctor determines the direction

However, the goals pursued here are not of a general nature, e.g. in the form of striving for profit maximisation, as doctors mistakenly assume, but are defined individually by each practice owner. In essence, business administration is designed to help him achieve his goals. It is free of demands and specifications and provides tools for the activities of the individual company, e.g. for a medical practice, to fulfil the goals of the practice owner as optimally as possible, both qualitatively and quantitatively. This also includes aspects such as work-life balance.

Key figures – the MRI scan of practice management

One such tool is key figures. They solve the problem 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 all areas mesh like finely tuned cogs can a smooth practice operation be achieved. Key figures such as the benchmarking-based Key Performance Indicators (BKPI) make it possible,

make the complexity of practice management manageable and comprehensible by condensing it into key orientation parameters,
to determine the actual state of practice management without great effort, and
at the same time identify strengths, but also deficits and risk factors as well as unused opportunities and possibilities for improvement.

With their help, concrete target parameters for the practice work can be defined and monitored and controlled in a simple but comprehensive way. One such indicator is the Best Practice Score (BPS) of practice management. It provides information on the extent to which the best practice standard is implemented in a medical practice. Currently, this score for German medical practices is 53%, which on the other hand means that 47% are not implemented, a deficit that is negatively felt by practice teams and patients on a daily basis.

Examples of practical business management aids

Walkway analysis

Another very pragmatically oriented tool for organisational optimisation is the walkway analysis, because the spatial arrangement of the contact points and the coordination of work or the walkways resulting from it have a significant influence on the time available for patient care. In an internal medicine practice, for example, the distance between the materials room and the treatment room was 36 metres. The number of aisles / MFA and the time needed for this resulted in the practice team spending almost two hours per day with running time between the two practice points. Relocating the materials room directly next to the treatment area – a corresponding option existed – freed up this time daily for other work.

Utility analysis

Situations in which various alternatives are available for selection and several criteria are relevant for the decision at the same time are the field of application of utility value analysis, which is also known under the names „scoring model“, „utility analysis“ or point evaluation method.It makes it possible to evaluate even more complex alternatives for action and to systematically make the optimal selection decision by means of the personally relevant criteria and priorities. Both quantitative and qualitative selection variables can be used, which can be individually adapted to one’s own environment and decision-making situation.

Break-even analysis (break-even analysis)

With the help of this easy-to-perform analysis, the point can be determined – the so-called break-even point – that separates the loss zone from the profit zone for a service or an offer – e.g. IGeL. The break-even analysis thus examines when the costs are covered by the revenues. Consequently, at the break-even point itself there is neither a profit nor a loss, it is a neutral point. Only when it is exceeded is a profit made, but when it is not reached a loss is made.

The benchmarking practice analysis

It is a system that has been tried and tested for many years for simple, fast and cost-effective benchmarking-based assessment of the status of business management practice.

All regulations and instruments of practice management are analysed in a 360-degree view in the form of a doctor survey: From planning to organisation, leadership, marketing and IGeL work, self-management to financial management, supplemented by the determination of teamwork quality and patient satisfaction.

The unique feature of the system is a double comparison of practice results:

On the one hand, the practice analysis results are compared with the average results achieved by practices in the same specialist group (specialist group benchmarking),
on the other hand, a comparison is made with the results that characterise above-average successful practice enterprises of all subject groups (best practice benchmarking).

The implementation offers the user fourfold benefits:

they recognise where their own practice „stands“ (business position determination, qualitative business comparison)
they find out to what extent their practice work is suitable for implementing the practice strategy in a targeted way, and
an „optimeter“ identifies previously unused optimisation approaches.

Conclusion

Digitisation, changing patient requirements and the general change in the framework for action mean that the work for physicians in private practice will become more multi-layered and complex in the coming years. Business administration can support practice owners in successfully navigating this change with their businesses, both in terms of caring for their patients and fulfilling their personal goals. The Practice Management Comparison© shows how the management of a general practitioner’s or specialist’s practice is set up in terms of business management.