Medical Practice - We Need to Control Expenses.

Control Expenses Now!

At the monthly board meeting the financial statement is reviewed and payroll costs are higher than expected based on either the budget or a comparison to same period last year. Doctor A asks about overtime and you acknowledge that there has been a lot of overtime recently. A motion is passed and all agree that no overtime, if necessary it must be approved by the employees supervisor.

How many times has this scenario played out in your practice? Maybe a better question is how many times a year is this question asked!

This change required a decision and discussion as well as a monitoring plan. All went well for how long? One pay period, two pay periods, two months?

The better approach would be to ask the question why was their overtime in the first place, in other words looking at the root cause(s) and developing a plan to change/transition related to the root cause makes more sense. Simply telling the staff no more overtime changes nothing except creating an awareness. Staff has heard this before and reacts like OK I’ll just keep on doing things. Some may not report their time, others may develop an attitude that says I won’t get things done until the next day.

Root cause analysis as to why there is overtime is a very helpful approach. One simple way is to use the “5 why” approach, ask the employee why they had overtime up to 5 times. It could be scheduling, doctor being late, consult reports not received, denials, refunds, or who knows. The 5 why approach drills down a little deeper to find out exactly what the root cause is. Once identified a transition plan can be developed and implemented.

Then in six months the board report can indicate that changes have been made to cut overtime, not by demanding but by improving how things have been done differently to improve care provided to the patient.

This may seem simplistic, it is not. This requires you to ask questions, take the time necessary to drill down and to work closely with your providers and team to achieve the goal.