By Margaret McGuckin
Are you thinking about selling your practice or joining a system? As a former Chief Operating Officer for a large, nationwide practice management company, I experienced physicians that loved working in our management system and those who didn’t.
What made the difference? The questions they asked while in the discovery phase of the M&A process helped them determine if there was strong alignment with expectations of the acquiring company.
Here are 5 questions that will uncover whether or not you’ll be happy practicing in a new way. Ask them early!
1. How will my success be measured?
• Too many doctors are surprised that they don’t really know how their success will be measured…and it goes beyond RVU.
• Ask to see all the reports and/or scorecards used to evaluate your success.
• How is productivity or RVU computed? Ask to see all the data and elements that go into the productivity equation. Ask them to talk you through them. A specific data element may mean something different to them than it means to you.
• What else goes into the equation? Cost management? Research targets? Revenue or payment targets, including payer mix targets?
• Are there a minimum number of patients that you will need to see daily? What tools or people do they have to help you get to that level?
• How will the performance of your team be measured? What happens to your practice manager? Typically the practice manager you’ve been working with—possibly for many years—will not be a long-term employee with the acquiring company. Very few practice managers are able to make the transition successfully.
• Who does the performance management for the administrative staff? For the clinical staff? If you want to have choice in who is working for you, you need to understand what role and responsibility you’ll have in interviewing, hiring and exiting members of the team.
• Can they identify (to your satisfaction) what the attributes are of a doctor who will be successful in their system? Do you have those attributes?
• Is there a maximum number of minutes allowed for types of appointments? For example, if you schedule 40 minutes for a physical and the new maximum amount of time is 30 minutes, it’ll be difficult to provide the type of patient experience that you’re providing now. How important is that to you?
2. What support will be provided to me and to my team?
• Get really specific on this! What is their approach to identifying and sharing best practices? Do they have a team who identifies and shares best practices across the group?
• How does this group think about the intersection of cost and revenue, as it relates to labor, types of materials, advertising and marketing, office expenses, travel and training, professional services…even down to bonus payouts for the team.
• Who is my “Go-To” person? Does it vary by function? For example, will you have to call a different person for a billing question? A coding question? An HR question? Or is one designated person able to get these issues resolved throughout the system. The answer to this question impacts your and your team’s productivity.
• Do you like and trust the C-level executives? The culture flows out from them. Would you want to have dinner once a month with them? If not, you will dread every performance review, every retreat, every visit and every conference call.
• Ask to meet with your key operating contact now, not later. Ask them to be realistic with you. Ask for a process map. If you don’t genuinely feel like they are there to support you, think twice. This can be indicative of a culture in which you won’t feel valued.
3. How will they communicate with me?
• Who do I talk to? How often? On what topics? Does one person talk with me about financials and another about budgeting?
• What’s the agenda for Orientation?
• How strong is the Onboarding process? What do physicians who’ve recently been brought into the system say about the process? Most physicians have found that they need more than IT training. They need to understand what is different from independent practice. A mentor is a huge asset. A small, but insightful, example of the parameters of operating in this system could be learning how the holiday party is handled. Are there budget constraints? Who pays? Can the company buy alcohol?
4. Ask a couple of detailed question to get a sense of how they think about investment and patient growth.
• What if I need a new hand piece or another new piece of equipment?
• Do they understand what a physician needs in order to be productive and balance this against the cost ramifications?
• Be ready to offer how many more procedures per day can be done with the new hand piece or piece of equipment.
• What is expected of me to acquire patients or expand the referral base?
• Ask doctors who have joined this group about how new patients come into the practice. Who does the marketing and sales work? Who bears the expense?
• Are there targets for this? For example, is the goal to have 10% new patients and 90% existing ones? Compare their target to your practice’s patient retention rate.
5. How important is the patient experience to you?
• If a superior patient experience is important to you, take a look at how you measure it today and look for similar things in the new group. Bring your patient satisfaction scores to the table. Are the measures similar? Do they know what the drivers of satisfaction and dissatisfaction are? Do you agree with them?
• Verbatims are more important than you think. They give you insight into the types of patients they treat. So, ask to read their patient satisfaction survey verbatims.
• Ask to spend time in a practice that the group owns that is similar to yours. As you spend time observing, check to see if you are seeing the same types of experiences playing out as you would see in your own practice. For example, ask the front desk or practice manager what happens when a patient complains. Ask to hear specific language they use in talking to a dissatisfied patient. Is that how you would approach the situation? If not, this is something you need to talk about.
• Do patients seem happy? Ask them what their experience has been. Does it mirror what you would hear in your practice?
When you ask yourself these questions, you’ll more fully understand the trade-offs you’ll be making in being acquired. How highly do you value flexibility and independence? How transparent are they?
If you aren’t getting what you need to make a sound decision, look at other alternatives or it’s highly likely that you’ll be asking questions within 24 months about how to exit.