3 Steps to Controlling Staff Cost

After provider compensation, costs for support staff are the biggest expense of running a medical practice. Even with good practice management, providers and office managers often feel as if they can never get staffing levels just right – an understandable feeling as there are many variables involved in achieving and maintaining staffing success.

Since work generally expands to fit the time available, excess staffing costs can result from employees being added during periods of high work load – such as during flu season – or when converting to open-access scheduling. Staff members may then be permanently retained even after work patterns change, seasonal impact ends or short-term projects are completed.

On the other hand, understaffing may reduce costs over the short term, but it usually increases the emotional costs of physician stress and staff complaints of overwork, and it can reduce efficiency to the point where costs increase as a percentage of collections.

Here are 3 steps to determining the appropriate staffing balance for your practice:

Establish a Budget

Typically the most productive doctors have higher-than-average staff counts. Their personnel budgets are higher, but so are their profits. Establishing a staffing budget is one of the solutions to finding the right staffing balance. Providers should first look at benchmark data for practices that are similar to theirs. Here are two of the best online sources for staffing data:

• For small/solo practices: National Society of Certified Healthcare Business Consultants (NSCHBC) (www.nschbc.org)Statistics Report for small and solo practices.
• For large/multi-specialty practices: Medical Group Management Association (www.mgma.com) Costs Survey.

According to the data, median staffing for solo and small primary care practices is three to four full-time equivalent support staff per doctor, presuming there are no non-physician providers or ancillary services and approximately 20 to 25 patient office visits per day. The budget for this level of staffing is typically around 20 to 24% of gross collections.

Adjust for Your Practice

The next step in determining the proper staff size for your practice is to adjust the benchmarks for staff count and costs in order to account for any particular circumstances related to your practice; this can include staff productivity, payer mix, capitation payments, use of quality measures and local wage levels.

Once you have tailored the benchmarks to suit your circumstances, you will have a custom benchmark that can be used to evaluate staff costs and can be easily updated as needed. For example, if the surveys show that costs have increased 2% in a particular year, then you can apply that adjustment to your custom benchmark.

Obtain Input from Staff

The final step is to discuss your findings with your staff members and solicit their input for staying within budget, and then review the data monthly.

The bottom line to investing in the effort of budgeting, just as it is in investing in other good practice-management behavior, is a flowing, more profitable and less stressful practice.

Source: https://medicaleconomics.com