Wednesday, June 4, 2008

The Streetwise Doc – A Single Core Metric

Having worked in a mix of private and socialized health care for the past 15 years I have a problem with the concept of the doctor as a poorly organized entrepreneur. I’ve listened to my accounting and financial friends tell me how inept my colleagues are when it comes to economic matters but I stand before you today to say that I’ve seen very few doctors and dentists fall into the social safety net. In fact, I find most have better control over their businesses’ than the typical accountant. They have strong people skills, an intimate knowledge of their business operations and are responsive to the needs of their patients.

At this point, I’m sure that some of my readers are shouting “bullshit”;

“My doctor has all the social grace of three-legged dog with urinary incontinence and the business savvy of Jeffrey Skilling.”

If you compare primary care providers to a typical entrepreneur they have all of the trappings and motivations of a great small business executive. Doctors are intimately connected to their “customer” base, good problem solvers (by necessity if not by nature) and have to adapt to changing patient needs through creative analysis. After all, as medicine advances so do the needs of the practice and with it the doctor. Most health care providers are “streetwise” in the sense that they have a good gut-feel for what is happening in the practice.

Doctors, while well connected, are never given any training in formal practice management short of advice on how to submit and collect billings. They tend to focus on costs not growth or change. Despite having the ability to rapidly change with the needs of their patients, problems in a practice can linger. This tendency is exacerbated where practices are encouraged to accept patients for flat rates that promote growth through greater patient volume rather than better service to the patient. Taking a page from the concepts of Alan Greenspan, history has demonstrated that removal of power from central planners and broadening of market mechanisms encourages the entrepreneurial spirit and improves efficiency. A major concern of mine is that, whether publicly or privately financed, centralized healthcare destroys individual initiative and creative destruction.

It is the responsibility of each provider to draw on their own entrepreneurial spirit and apply their skills of critical analysis to find one core metric. It is a singular value that can stand alone and reflect the health of a practice.

To find the value that is right for an individual health care provider, ask the question “how do we provide care for people?” and apply it an appropriate patient pool. The 5 why’s technique of root cause analysis is a good tool as is a more formal approach to creative analysis (however ironic it may be to have a template for creative analysis).

In the case of my own practice we best serve the community by being an expert resource to generalists. We focus less on the patient pool and more on being accessible to generalists as well has having the expert knowledge they require. There are many dimensions to measuring accessibility and expertise but the core metric we use is the number of patients referred for care. It describes how useful we are to primary care providers and the value they assign to our expertise. To that end, our practice tracks the number of quarterly referrals by generalist, community and patient type.

Nuances in the scope of individual practices make it impossible to describe a single core metric. Rather, each practitioner needs to draw on their inherent ability for creative analysis to determine what numeric value best characterizes the health of their practice then follow it relentlessly.

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