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For Physicians – A Healthy Perspective on Money

April 21, 2022 by Andrew Craigie

In A Perfect World Blog Series – Part Three

By Andrew Craigie,

Are you a physician ready to change the game in your medical practice?

Perhaps your perspective on money and its relationship to your practice has a greater influence on your success than you imagined. We would like to review with you timeless author Michael Gerber and the E-myth physicians perspective on money.  A fresh perspective on money and medicine may suggest areas to examine that can open endless opportunities. Your perfect practice can exist, it’s simply time we look at things through a new lens.

Let’s remove the façade about medicine and money.  The truth is, everyone in healthcare is concerned about money, its sufficiency, its impact on the practice of medicine, how it flows, and what it implies for the future of medicine.  Now, clearly, we could explore this subject from a million different angles.  Today let’s consider the medical practice and how critical it is for physicians and practice leaders to have a healthy perspective on money and medicine.


Think Like Owners

It’s common for leaders to be far too timid about the subject of money with their team.  The truth is, without streams of income and a healthy operating margin, there would be no practice, “no margin, no mission”.  Physicians and practice leaders need to get comfortable talking about the financial aspects of the medical practice with everyone on the team.  Every person in the practice should understand where money comes from, where it goes and what they do in their work that influences inflows and outflows from the practice.

The most engaged team members “own” their work processes; learning to think about how what they do contributes to the profitability of the practice. Using Key Process Indicators (KPI’s) that influence profitability to measure performance is the most effective way to help your team become more mindful of how their work impacts the success of the practice.


Four Factors of Money

Gerber suggests four factors that govern the subject of money: Income, Profit, Flow, and Equity.  It is important to maintain a healthy perspective on the relevance of each to the medical practice.  Without a grasp of these four factors, there is risk of becoming detached and complacent.  The best way to remedy this – every person on the team needs to learn to think like a business owner.

Have team members track their own KPI’s when possible and report how they are doing to the rest of the team.  This may feel awkward at first, but nothing influences ownership more than being responsible to the rest of the “owners” when it is your turn to share your progress.


Income

Income is the money the business produces when someone in the practice performs a service.  Any time an employee in the practice performs a revenue generating service there is the potential to generate income.  When the physician/owner performs a service, they are performing the role of an employee of the practice.  The physician is doing a job in the practice.  As the ultimate practice owner, they should think about how they can duplicate themselves and grow the income of the practice, so the success of the business becomes less dependent on their personal effort.  The best way to accomplish this is for the physician owner to surround themselves with capable people and employ reliable standards and processes in the practice.

Determine how to give every member of the team the opportunity to practice at the top of their licensure, eliminate unnecessary and wasteful work, consider adding members to the team who expand the capabilities of the practice, and leverage new technologies to work better, smarter, and faster.


Profit

Profit is what is left over after the practice has performed a service in the most effective and efficient way possible.  If a practice is producing a profit that is great, but it doesn’t necessarily imply the practice optimized their profit.  What every business owner should consider is if they the work they are doing is contributing to the profitability of the practice.  Is the work consistent with the purpose of the practice?  If not, determine if there is a strategic reason to do this work or put a stop to it.

There are four ways to understand the value of profit to medical practice…

  • Profit is Investment Capital that feeds & supports growth.
  • Profit is Bonus Capital that rewards people for exceptional work.
  • Profit is Operating Capital  that shores up money shortfalls.
  • Profit is Return-on-Investment Capital that rewards the owner for taking risks.
    (Gerber, 2003)

Flow

Flow is an indicator of what money does in the medical practice. Flow measures the here and now, it answers the question of how money is moving through the practice, where is it coming from, where it is going. While an income statement is a look back at what the practice has done, flow is a measure of how much money the practice has, how much it expects to have and how it will be used.

The income statement tells the owner how much money is being spent and where.  Flow provides the same information but, most importantly, it tells the owner when the practice is spending and receiving money.  “Flow is an Income Statement moving through time.”

Managing flow takes effort but doing this properly provides the owner with tremendous insight, clarity, and power to effectively plan and manage the business.  Managing flow helps the owner consider how to increase the velocity of inflows and scrutinize outflows to be more effective, more efficient, or to eliminate unnecessary outflows altogether by stopping what you are doing that produces no value.


Equity

Equity is the financial value placed on your business by a prospective buyer.  Gerber says, “to increase your practice’s value, you have to build it right.  You have to build a practice that works.  A practice that can become a true business is a business that can become a true enterprise.  A practice/business/enterprise that can produce Income, Profit, Flow and Equity better than any other practice/business/enterprise can.  To accomplish that, your practice must be designed so that it can do what it does systematically, predictably, every single time.”  If you don’t accomplish this, you don’t have a business to sell…you just have a job.

To build equity in your business, go to work on your business building a profitable and highly reliable system of practicing medicine.  Build this business as a” totally integrated turnkey system that delivers exactly what you promised every single time.”  Make it so unique and different that it stands out as a hallmark above others.


Key Takeaways…

  • Be honest with yourself about whether you’re filling the employee shoes or owner shoes.
  • As your practice’s key employee, determine the most effective way to do the job you’re doing, and then document that job.
  • Once you’ve documented the job, create a strategy for replacing yourself with someone else (another physician, or even better, another clinical professional performing at the top of their licensure that can do the same work to your exact standards.
  • Use your new employees to manage the newly delegated system.  Improve the system by quantifying its effectiveness over time.
  • Repeat this process throughout your practice wherever you are acting as employee rather than owner.  Leave behind dedicated people using your effective systems.
  • Learn to distinguish between ownership work and employee-ship work every step of the way.
  • We would like to introduce you to a team that can help you succeed in business and life, iPX Physicians https://www.linkedin.com/company/ipx-physicians/ .  iPX is bringing a fresh perspective to the physician office, harnessing advancements in technology and innovative practice design so our physician partners can work on their business and experience the joy of practicing medicine again.

Filed Under: Andrew Craigie, Transformationist

The Physician Lifestyle You Deserve

February 25, 2022 by Andrew Craigie

In A Perfect World Blog Series – Part Two

By Andrew Craigie,

Are you a physician ready to change the game in your medical practice?

You are committed to excellence for your patients, and realize that your business has become all-consuming. It’s time to put into place a new way of thinking, and receive the lifestyle you deserve inside your practice, and within your own life. We would like to review with you a timeless author’s perspective on thinking, and new areas to examine that can open up endless opportunities. Your perfect practice can exist, it’s simply time we look at things through a new lens.


Medical Practice and Family Life

For the physician practicing in today’s healthcare marketplace there are really four pathways to consider: independent practice, group practice (partnership), contracted, or employed. The path the physician chooses is usually influenced by several personal realities such as risk/reward, location preference and, most certainly, lifestyle.  To “tick the most boxes”, many physicians welcome the idea of being in private practice.  The allure of being an Entrepreneurial Physician is genuine; then they learn just how challenging it is to manage the business side of their practice effectively and profitably.  I would like to suggest an even greater consideration, is the toll this can take on personal relationships if they do not have a plan for balance.

The first reality for any physician launching their own practice to realize is that all business is “family” business.  If you are an independent business owner every decision you make about your business, every priority, is influenced by the business and therefore has an impact on your family and personal relationships.  Being the captain of your own ship can be a great joy, but it is very important to remember that your family is also coming along for the ride.

In his book The E-Myth Physician, Michael Gerber shares a story of Keith and his wife Susan.  Keith is inspired to go into the field of medicine.  He and Susan make the sacrifice to put Keith through medical school and residency.  Keith goes to work for a medium size medical practice in Sacramento, California, they start a family and life is good.  Eventually Keith becomes increasingly frustrated with how the medical practice is being managed.  He and Susan talk again and agree to take the risk of striking out on their own, in private practice.  “Thus began the practice of Dr. Roberts.  He quit his job, took out a second mortgage on their home, and leased a small office.”  The practice grew and gradually consumed more and more of Keith’s time, managing employees, negotiating with insurance companies, seeing patients, and paying the bills.  He became consumed by the business and gradually became more distant from Susan.  You can finish the story… It doesn’t take much thought to see how this might end.

Start with a big dream, the dream starts to unravel.  STOP!  As Gerber says, “Business is only business, it’s not your life.”  I can attest, the physician who makes the bold decision to launch their own practice, can be successful, thrive in their medical practice and have a life outside of the business.  To accomplish this, they must plan for life with at least the same level of commitment that they plan for the success of their practice.

Gerber suggests three distinct steps to succeed in life and business…

  1. Innovation: Continue to find better ways of doing what you do.
  2. Quantification: Once that is achieved, quantify the impact of these improvements on your business.
  3. Orchestration: Once these improvements are verified, orchestrate this better way of running your business so that it becomes your standard, to be repeated time and time again.

The principle is simple (but not easy) – Take control of your business; take control of your life.  Take Gerber’s advice start to conceptualize work in three areas: Entrepreneur, Manager & Technician.  Then organize your work and life into day-tight compartments, standardize your work, and commit to a disciplined approach.  I like to think of this as “Clarity of purpose & discipline to process”.  There are tremendous opportunities and innovations in the marketplace of ideas that can help create real margin in your business.  Leverage these opportunities to create more margin in your life also.

We would like to introduce you to a team that can help you succeed in business and life, iPX Physicians https://www.linkedin.com/company/ipx-physicians/ .  iPX is bringing a fresh perspective to the physician office, harnessing advancements in technology and innovative practice design so our physician partners can work on their business and experience the joy of practicing medicine again.

Filed Under: Andrew Craigie, Transformationist, Uncategorized

A New Way of Thinking for the Modern Physician

January 18, 2022 by Andrew Craigie

In A Perfect World Blog Series – Part One

By Andrew Craigie,

Are you a physician ready to change the game in your medical practice?

You are committed to excellence for your patients, and realize that your business has become all-consuming. It’s time to put into place a new way of thinking, and receive the lifestyle you deserve inside your practice, and within your own life. We would like to review with you a timeless author’s perspective on thinking, and new areas to examine that can open up endless opportunities. Your perfect practice can exist, it’s simply time we look at things through a new lens.


Systems Thinking vs Tactical Thinking

The E-Myth by Michaele Gerber[1] remains one of the most sensible and informative books of this era.  Geber’s lessons are pragmatic and effective when put into practice.  The principles of E-myth are timeless wisdom when applied in work and life for medical practitioners of all stripes, particularly those who aspire to own and operate truly great medical practices.

E-myth makes the distinction between going to work on your business versus going to work in your business.  Going to work on your medical practice is Systems Thinking. Going to work in your Medical Practice is Tactical Thinking.

This principle makes rational sense but is particularly difficult for physicians because their bread and butter come from touching the patient; you only get paid for what you do.  While that is true for most practitioners, what if we can figure out how to structure your practice so you can become a “force multiplier”.  More importantly how can your business itself become a force multiplier because you have adopted disciplines that make it so?

Consider just three areas ripe with opportunity for the physician who is committed to changing the game in their medical practice: workflow, process standardization, and technology.

Start by examining your workflows, observe how your team and patients move through your practice identify bottlenecks, duplication, needless handling of information.  Redesign your workflows to eliminate waste and improve reliability.

Next, test your solution and see if it achieves the gains you hoped for.  If the changes work, adopt them, if not, modify your approach and test the changes again.   Once you have settled on the best process, document it and train everyone on your team to follow the established standard.  By doing this, you will reduce confusion, frustration and improve consistency of outcomes.

Lastly consider how you are deploying technology.  For example, most medical practices use electronic medical records (EMR’s) but surprisingly, many fail to fully realize the features of these systems and the benefit they can bring to the medical practice.  Look at how your EMR can facilitate communication in your practice.  Are you using the features in your EMR to enable efficient communication?  Integrated document handling, telephone orders, patient portals and lab interfaces are just a few features that are standard in most systems.  Incorporating the use of these features in your standardized workflows and employing them rigorously will dramatically improve the productivity of your practice and the satisfaction of your team.

Interactive voice technology and virtual assistants are other emerging technologies that are quickly becoming a valuable part of the patient journey.  Patients appreciate the convenience of being in control of conversation flow and routing call traffic over these automated channels frees up valuable staff time to assist patients that benefit most from a person-to-person interaction.

We would like to introduce you to one such technology, iPX Physicians https://www.linkedin.com/company/ipx-physicians/ .It is bringing a fresh perspective to the physician office, harnessing advancements in technology and innovative practice design so our physician partners can work on their business and experience the joy of practicing medicine again.

Filed Under: Andrew Craigie, Transformationist

Rapid Cycle Improvement Vlog

June 22, 2020 by Andrew Craigie

By Andrew Craigie

Filed Under: Andrew Craigie, Transformationist

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“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

“Michelle Wier, CMPE, worked with our EMS program for a year, providing interim financial management at a crucial time for our hospital district based agency. Her exemplary work included budget and tool development, redesign of our financial statements, and a compensation analysis for all EMS positions. She helped provide crucial accountability for our internal accounting systems, contract negotiation support and a streamlining of our in house processes and reporting structures. I highly recommend her work product and greatly appreciate her astuteness and work ethic.”

J. Michael Edwards, DDS, MD, FACS – Commissioner, San Juan County Public Hospital District #1 San Juan Island EMS and MedEvac

“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

“With excitement and enthusiasm I announce the transition of Wier Management Solutions to V2V Management Solutions. I’m honored to partner with some of the industry’s best “Transformationists,” who will assist our clients in realizing and enhancing the value within their organizations.”

Michelle Wier – President, Wier Management Solutions, Inc.

“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

“Knowing it is time to reshape your current reality is the first step to transformation. When we contacted V2V, our goal was to innovate our clinic network from all aspects; integration, structure, financial controls and leadership. Michelle and her team at V2V helped us develop a well-defined plan. In transformational management one hears Quality times Acceptance equals Results (Q*A = R). Along with the quality of recommendations, V2V worked diligently to garner both input and acceptance from providers and staff. This is what I believe will ensure long-term, sustainable success for our clinics in a very uncertain time..”

Steven D. Febus – Chief Financial Officer, Pullman Regional Hospital

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