Percent of Overhead Responsibility

Q.:  What percent of the overhead should I as a new physician in a practice accept?

A.:  To answer the question, and it is a multi-faceted one, since there are many different types of overhead.

There is only one formula however, that works every time, and saves a lot of grief down the road.  The formula is that the physician pay only his direct expenses and not indirect expenses.  For instance, if you are sharing space with Orthopedic Surgeons – you only want to pay for your direct overhead – not their accounting, marketing, employees, etc. for which the physician has no benefit.  The physician sharing space should account for the exact sq footage he/she is utilizing, have his/her own dedicated staff for which he/she pays for, and pay the percentage of billing for only what he/she collects.

What is generally done, and is a huge mistake, is to share equally the expenses of the overall practice with all of the physicians in the practice.   An Ortho practice has huge expenses, most of which are not related to anything the PM&R physician generates.  This later ends up in huge disputes, and almost always ends with the PM&R doc leaving and not on so good terms.

The percentage of overhead cannot be calculated by percentage unless he is in his own practice, and then that is driven by the market values, i.e., cost of lease space, employees, marketing, etc.   Most of our practices have an overhead of around $6,000 per month before PRS fees and physician salaries.  Most physicians take a set salary, and then take bonuses with the surpluses.

Answer contributed by Liz Lee, President, PRS, Inc. a practice management and billing company that works mostly with physiatrists, 817-284-9850,1-800-324-4777, 817-284-3425 FAX,  Website:  PRSinc.com

Interview mistakes for experienced doctors

You’ve done it before. . .  interviewing that is.    You’re not a newly graduating resident.  You have experience, know-how, wisdom, and more.  Prepare for an interview?  No, you’re thinking, I don’t need to.   Give thought to what I’m going to say in the upcoming interview; no, you’re thinking I don’t need to.  Yes, you should!  Just as the newly graduating resident might be perceived as being green, not confident and shy, the opposite is true of many experienced doctors who interview.  That is, experienced doctors are sometimes perceived as being too knowledgeable which often is perceived as being too set in their ways to be flexible.

Being overly confident during an interview may be perceived as being obnoxious which converts to the thought that the experienced doctor will be overly demanding of staff.   Experienced doctors who talk too much during the interview are perceived as not being good listeners so therefore not being good team players.  Also the old saying goes that the more you talk, the more you show what you don’t know.

Not asking questions at an interview is perceived as being overly confident and that the same doctor will not be open to working with the new administration.  Just as the resident needs to learn in an interview to find the balance between speaking up and listening, so too does the experienced doctor.  However for the experienced doctor, it’s more the converse in that the experieced doctor needs to listen more and speak less.

Billing Services

A physiatrist who is contemplating a position as an independent contractor asks me today about billing services.  I found out the following information.
1)  Bruno Stillo, Physiatry Billing Specialists, 800-835-4482, charges a percentage of collections depending on the level of service.  I said a 28 bed census and he said the receipts would be  $500K+.
He said at the outset you give him charges and an initial face sheet with the patient information.  He builds a data base.  You fax him the charges weekly.  He puts 1 week’s charges on a grid.  He takes care of doing the billing.  You get the receipts directly; you set up a PO box.  You send him by Fed Ex the deposits you make.  He posts the payments and goes after the unreceived claims payments.  Bruno will also help with any billing issues as needed.  He aims to keep his physiatry clients on a long-term basis.  Bruno will also get you on Medicare and whatever payor panels there are in the area.  He can also help you identify what your collections should approximate if you’re considering a new position and can give him the charges for the procedures.
2.  Liz Lee, PRS Inc, www.prsinc.com, She charges 7.5% – 8% of collections for inpatient services.   I didn’t ask her the process as I presume they’re similar.
I don’t endorse either of these entities as I haven’t used them but they specialize in physiatry so they should have a good handle on physiatry billing.

Questions to Ask Candidates

Here’s a list of questions to ask physicians you are interviewing for a position with you:

1.   Give me an example of your leadership skills.( If your job qualifications involve leadership.)

2.   Give me an example of your problem-solving skills.

3.   Wht is your secret to handling difficult patients?

4.   For experienced candidates:   How have you contributed to the growth of your medical group’s practice?

5.   For experienced candidates:   What would you change about your current situation?

6.   What are you most proud of regarding your professional accomplishments?

7.   How does this opportunity compare with others that you are considering?

8.   What do you think of our community and its amenties?

9.   If an offer were extended, what would you be looking for in terms of a compensation package?

10.   What attracts you about our opportunity?

11.   Where are you considering practice opportunities?

12.   What are you seeking in your new position?

Preparing for the Interview

One of the advantages of using  my services is that I try to collect as much information upfront about an opportunity as possible.   Because all I do is physiatry recruitment  , I know the “lingo” of physiatry.    A simple  example is that  I know and take the time  to ask how many inpatients the hiring entity  expects  the new  doctor to see when a position involves inpatient.   And, if you want more information, I will gladly ask the practice/hospital.   I will do so without revealing your name.     This enables you to get information that you would  may not feel comfortable asking directly.

The same applies for the sometimes uncomfortable subject of compensation.   I try to get as much information about this upfront.   Sometimes the hiring entity says that the compensation is based on experience.   If you want to know a salary figure,   I will ask   you about your years in practice, whether you’re Board Certified and in what fields, so that I can get a reasonable income figure from the hiring entity.

I suggest that you don’t reveal your current income during the interview process.   I’d say something like “I am open to a compensation that is fair and reasonable for the area and my experience.”   You should review your answer to the compensation question and rehearse it in advance so that it sounds confident and natural.

It’s wrong

The other day a physiatrist called me.     I asked him how the new venture that he talked about a year or two was going.   He said not well and that’s why he’s calling about practice opportunities.   He also added that I had a good nose because I had commented when we first talked about his new venture that I had some hesitations about it.     It seems that ventures often have overriding financial goals that ultimately discourage a well-meaning physician.

The title of this article, It’s Wrong, refers to situations that you encounter when you’re looking for a job that ultimately make you say “It’s wrong. . . it’s not a good job for me.”   Here are some examples.

First, if it smells like a fish, it probably is a fish.   Said another way, if your gut tells you something about the practice isn’t right with you, go with your first instinct.   Perhaps it’s the lack of chemistry you have with the doctors in the practice or maybe it’s their philosophy or practice culture that doesn’t jive with your philosophy.

There are red flags, too.     One is whether the position is new or a replacement.   This is one of my basic questions when I’m asked to fill a position.   Being a replacement alone is not a red flag.   You have to dig deeper and find out the reason the past doctor left.   It’s also good to know the attrition rate of the doctors in the practice.   What is the practice’s track record for keeping their doctors?

Another red flag is if the position is with a private practice and is an employee forever position.   Most positions offer the potential for partnership.   If even the potential for partnership isn’t offered, then that’s a red flag.   The subject of partnership potential is an article in and of itself as oftentimes, it’s very nebulous.

Medical Director – Administrative Responsibilities

The other day I received a phone call from a physiatrist   inquiring about  the stipend  for a Medical Director position of a rehab unit.   I hear various numbers across the country and the numbers vary based on the number of beds, the region of the country and the entity.   On average, I’d say the stipend is approximately $75,000.   I always quote on the low side because then you’ll be pleasantly surprised if you’re offered a higher stipend.

The old days of stipends of $150,000 don’t exist much anymore.   Likewise, income guarantees seem to be going by the wayside also.    It’s hard to get a handle on what the average stipends are just as it’s difficult to get statistics on physiatry compensation.

In the same conversation, we talked about the administrative hours and responsibilities required of a Medical Director.   I understand that Medicare requires 20 hours a week.   Administrative responsibilities include staff development, program development and any day-to-day administrative issues.

Please note that the information above is my opinion and may or may not be accurate.   Your comments are welcome.   Please email me at farrhealth@comcast.net