To Lease or Not To Lease? That is the Question!




When it comes to equipping a medical practice, there are endless things to consider. Modern technology is so rapidly-changing, that it can seem like a bad investment to purchase anything except office furniture and exam tables!


Recently, I helped draw up a business plan regarding the purchase of an MRI machine. I calculated the net income, and how many patients we outsourced, and also how payments from insurance companies might factor into the equation. In the end, it made business sense, but the variables were tricky.


Some lease agreements are good bargains. For instance, there's the "buck-out" clause, which allows the practice to buy a piece of equipment for $1 after the lease runs out. This can be a good way to get a good deal and keep an item properly updated throughout the terms of the lease.


Here are some good rules of thumb regarding negotiating an equipment lease:

• Can you transfer it? This is important not only in case you sell your practice midway through the term, but also if you bring on other partners who will share in the liabilities and assets.



• Will it automatically renew? Some leasing companies insert an "evergreen" clause into contracts. This is a time period prior to the end of the term when the customer has to notify them of their intent regarding the equipment. If this clause is in effect, and the customer neglects to notify the company in time, the lease automatically renews for another period.



• Be clear on the end costs. A leasing company will usually have a provision giving them permission to charge you for damage or unexpected depreciation on the equipment. Be sure to get specifics on this beforehand, so there will be no misunderstandings at the conclusion of the lease.



• Avoid indeminfication clauses. A lease company will try to protect itself from lawsuits by including such a clause, making the practice liable should a patient sue the company due to an injury caused by their leased equipment. Never allow this in your contract!



• What are the tax benefits? Some states allow you to claim depreciation from leased equipment. Ask your accountant if yours does.



• Who will do the equipment maintenance? Be clear on what maintenance the vendor is willing to do on the machine. Will they repair all of the components? Again, get as specific as possible.

It always pays to negotiate. Dare to ask, and see what happens. If you can, wait until you're near the end of the company's fiscal year, when they're more ready to cut a deal. After all, a lease is a long-term commitment with nasty penalties for getting out early (if they let you).

I've tried to cover a lot of the bases here, but I'd love to know any other tips you'd care to share. Would you rather buy or lease? Any horror stories or things to avoid? As always, your comments are welcome!

Some Management Tips



Today, I thought it would be nice to jot down some of my principles of management. Mind you, I am not trying to say that I know better than anyone else--anyone who reads this blog knows I am very open to public opinion--but I do think my years of experience, trial and error, have made me very good at my job.



First of all, one of my main rules is no one on my staff is allowed to feel a job is beneath them. We cross-train, and if a person has extra time to help someone else, they will do so. I am not exempt from this policy, by the way. I am usually the first person in and the last person to leave, and I make a point of helping file and take phone calls when my schedule permits. I've found that leading by example is a very potent message.



Another key tenet is that I act as an advocate for my staff. When someone has a legitimate complaint with something, I do everything in my power to rectify the situation. Also, when a clerical staff member has a problem, I tell them to blame me, so I will be the one to take the heat from the medical staff. It's crucial that my staff trusts me to act on their behalf.



Everyone has a voice. During our weekly meetings, anyone is allowed to speak their mind on anything work-related. The physicians are there as well, and it creates a real spirit of camaraderie. I've worked at places where doctors have been more aloof, and you can tell by the way their staff acts. I feel the doctors are as obligated as I am to show an interest in the people who work for them. After all, they're upper management.



This past year I have also experimented with a new system to encourage better attendance. Most people view sick time as "mental health days," but in a medical practice, it can make things much more stressful. As I've noted, we cross-train, so people are able to fill in the gaps, but to discourage unnecessary sick time, I offered bonuses of $250 for every 6 months of perfect attendance. I timed it for January (right after the holidays) and July (prior to a new school year for those with children and an extra summer bonus for others).



The effect was astonishing. At least half of our staff had perfect attendance, and the good will their financial reward engendered boosted office morale considerably.



A medical office is a fast-paced environment and change is a constant. By managing with the above rules in mind, and letting the staff know that policy changes aren't written in stone--that there is always a trial period for implementation, to smooth over the rough patches--the stress level can remain low. We feel like a real team, and that translates to a good place for patients to come visit.



As I noted at the beginning of this post, I'm very curious what you think. What management tips have helped your practice? What do you think of mine? Any comment is much-appreciated.

The Danger Within


When it comes to litigation, of course doctors fear malpractice the most, but in fact their employees are also a potential source of lawsuits. A good office manager insulates the practice as much as possible from being sued through vigilance and continual consultation with outside experts such as lawyers and accountants.



For example, I know of a practice that was ruined when an employee who originally filed a lawsuit claiming discrimination. During the course of his investigation, their lawyer discovered that the doctor had been paying the employee as an exempt, salaried worker, which meant he wasn't giving them overtime. Unfortunately, this employee should've been classified as non-exempt (hourly) and so the doctor was liable for all of the overtime not just for this one person, but several other staff members as well. A good accountant would've made this clear, and the problem could've been rectified prior to it reaching such a dangerous point of no return.



Another important aspect of medical practice safeproofing from legal hassles is to maintain strict compliance with the Occupational Safety and Health Administration (OSHA) worker safety rules. Consult with a lawyer and stay on top of any changes in regulations regarding potential contamination issues such as disposing of medical waste, properly handling soiled linens, and precautionary measures to avoid contact with bodily fluids.



One of the key pieces of advice our lawyer gave me was to document everything. Not only do I have our harassment policy spelled out clearly in our employee manual, but I have every new employee read and sign an acknowledgement of it. Just doing that simple act is an important step toward avoiding conflict.



When problems do arise, I make sure to write down the source and reasons. Everyone--doctors included--has attended meetings on what is and isn't appropriate. Although we are a medium-sized practice, everyone is well aware of the rules and who they can turn to if the person directly above them is the cause of their woes. The key is to not frustrate or make any staff member feel like they have no recourse.



So far we've been pretty lucky. Situations sometimes arise, but we have dealt with them in a professional manner. That's the best you can do. Respect your employees and hope that they accord you the same courtesy.



Any good stories regarding this topic are welcome in the comment section. Have you ever had a problem which required conflict resolution? How did you deal with it? I'd love to hear from you!

Open Access



There is a great article in Slate.com about "open access," which is a scheduling method that allows practices to see patients on the same day. We have been using this system where I work for a few years now, and I can tell you it works.



When I first started here, our patients had a standard wait time of roughly three weeks before they could see their primary care physician. Then I came across research that showed it was possible to minimize waiting times and do the work as it comes, and not plan for it in the future, which only frustrates the patient and causes extra work maintaining a backlog of appointments. It also reduces no-shows significantly, since a patient is far more likely to come in on the same day they call.

Mind you, it took a lot of overtime at first, and it was a solid two months before we were able to whittle the appointment book down to a managable size. We now schedule about 30% of our patients in advance, and leave the rest of the slots open for people who call that day. For us, Thursday has proven to be a particularly busy time, so we stay open later.

Here's a handy reference for anyone wishing to implement open access:

1. Move toward advanced access by working down your backlog of appointments.



2. Roll out the new system by showing, not telling, patients how it works. When we try to explain our systems, we often make them overly complicated.



3. Begin offering every patient an appointment on the day they call your office, regardless of the reason for the visit.



4. If patients do not want to be seen on the day they call, schedule an appointment of their choosing. Do not tell them to call back on the day they want to be seen.



5. Allow physicians to pre-schedule patients when it is clinically necessary ("good backlog").



6. Reduce the complexity of your scheduling system to just three kinds of appointments (personal, team and unestablished) and one standard length of time.



7. Make sure each physician has a panel size that is manageable, based on his or her scope of practice, patient mix and time spent in the office.



8. Develop plans for how your practice will handle times of extreme demand or physician absence.



9. Encourage efficiency and continuity by protecting physicians' schedules from their colleagues' overflow.



10. Reduce future demand by maximizing today's visit.

At first, some of our doctors were very skeptical about this approach. The backlogged schedule is a classic sign of success in a medical practice--proof that you are thriving. Unfortunately, it is not beneficial to the patients, and it creates a static sense of bureacracy.

This new approach actually bonded the doctors and staff, giving them a renewed sense of purpose. It also streamlined our practice, since it forced our doctors to really analyze how and when certain patients should be scheduled for return visits.

As an added bonus, word of mouth was fantastic, and we wound up with an increase in patients (every customer survey we have done nets us high marks). Personally, I enjoy the freedom of spending each day doing work that is current and in the moment. To quote the motto of one of the doctors who developed the system, we "do all of today's work today."

Does your practice use the "open access" system? If so, how is it working? If not, what do you think of it? I'd love to hear your input!