What it’s all about

Doctors in private practice have a distant to negative relationship with the term “business management”. This is mainly due to ignorance and prejudice. However, this attitude means that important tools that can improve patient care, guarantee the flexibility required for transformation in the medium term and ensure the long-term success of the practice are not utilised.

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

“Business management, that’s what the tax consultant does!”
“The care of my patients can’t be expressed in figures!”
“Economisation is damaging medicine!”
“I’m 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, but above all by the quality of practice management, i.e. the way in which diagnostic and therapeutic services are transferred to patients.

The importance of business management knowledge is also evident today when it comes to countering the negative effects of inflation and cost increases. Most practice owners think primarily of cost reductions when it comes to countermeasures, but the appropriate strategy is to increase efficiency, effectiveness and productivity. Benchmarking studies of practice management show just how large the reserves are: on average, German GPs and specialists do not implement half of the best practice standard for practice management in their practices. It describes the regulations, instruments and behaviours that are essential for smoothly functioning work, even under changing requirements.

The work of a medical practice is based on business management

Two thirds of the work in the “service company medical practice” is of a business management nature and can be organised using the associated methods and instruments in such a way that it functions smoothly to a large extent. This includes not only areas of activity such as planning, including the development of a practice strategy, but also market and patient research, personnel management, marketing, organisation and communication through to billing and controlling.

The doctor determines the direction

However, the objectives pursued are not of a general nature, e.g. in the form of striving to maximise profits, as doctors mistakenly assume, but are defined individually by each practice owner. It may, for example, be a question of providing the current volume of services at a lower cost. In essence, business management is designed to help doctors achieve their goals. It is free of requirements and specifications and provides tools for the activities of the individual practice operation 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

Key figures are one such tool. They solve the problem that “practice management” is a conglomerate of many different areas of action that are closely interlinked and to a large extent mutually dependent and influence each other. Smooth practice operations can only be achieved if all areas mesh together like finely tuned cogwheels. Key figures such as the key performance indicators (KPIs) make it possible to

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

With their help, concrete target parameters for practice work can be defined and monitored and controlled in a simple but comprehensive manner.

Further examples of practical business management aids

Route analysis

Another very pragmatic tool for organisational optimisation is the walking route analysis, as the spatial arrangement of the contact points and the coordination of work and the resulting walking routes 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 walks per employee and the time required for this meant that the practice team spent almost two hours a day walking between the two practice locations. Relocating the materials room directly next to the treatment area – a corresponding option existed – freed up this time for other work every day.

Utility analysis

Situations in which there are various alternatives to choose from and several criteria are simultaneously relevant for the decision are the field of application of utility analysis, which is also known under the terms “scoring model”, “utility analysis” or point evaluation procedure.
It enables even more complex alternative courses of action to be evaluated and the optimum selection decision to be made systematically using the personally relevant criteria and priorities. Both quantitative and qualitative selection parameters can be used, which can be customised to the individual environment and decision-making situation.

Break-even analysis (break-even analysis)

This simple analysis can be used to determine the point – the so-called break-even point – that separates the loss zone from the profit zone for a service or offer, e.g. self-payer offers. The break-even analysis therefore analyses when the costs are covered by the revenues. Consequently, there is neither a profit nor a loss at the break-even point itself; it is a neutral point. A profit is only made if it is exceeded, but a loss is made if it is not reached.

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 current status of business management practice work.

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, management, marketing and 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 the 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),
Secondly, a comparison is made with the results that characterise above-average successful practice companies in all specialist groups (best practice benchmarking).

The implementation offers the user fourfold benefits:

he recognises where his own practice “stands” (economic positioning, qualitative comparison of operations)
he learns to what extent the practice work is suitable for implementing the practice strategy in a targeted manner and
an “optimeter” identifies previously unused optimisation approaches.

Conclusion

Digitalisation, changing patient requirements and the general change in the scope of action mean that the work of registered doctors in Germany will become more complex and multifaceted in the coming years. Business administration can help practice owners to successfully navigate this change with their businesses, both in terms of patient care and the fulfilment of their personal goals.

Outpatient care of the future in Germany: Not without business knowledge