Practice under pressure

Practice under pressure
Published: 
June 2013

How can general practice be managed to deliver bang-for-health-dollar-buck to the government, healthcare outcomes for patients and a respectable ROI for the business?
UQ Business School's Dr Robyn King considers which management systems bring efficient business practice to general practice.

The profitability of any business is about the efficiency of systems; you have to implement systems that are efficient to the total operation of the business.

For most of us, our local GP, is the first point of contact when something goes wrong with our health. Over time, this has led to a lot of tinkering. In the past decade, GP clinics have faced a turbulent time with a raft of changes and challenges, most noticeably in how they are paid. The Federal Government has introduced practice incentive payments (PIPs) linked to accreditation and specific public policy criteria, such as electronic health records and chronic disease management.

DR ROBYN KING

A qualified physiotherapist who previously managed a medical practice, Robyn is now a lecturer in Accounting. She was awarded her PhD at UQ for research into management accounting in primary healthcare businesses.

The goal has been to make effective health care as affordable as possible for all. The risk, of course, is that red tape, cultural change and lack of job satisfaction are demotivating for primary health care professionals – our local doctors on whom we rely so much.

In fact, the complexity of the system and ongoing changes have driven a move towards less GP ownership of clinics; there are fewer partnerships and more corporate ownership of general practice businesses than ever before. According to MABEL data, some 72 per cent of GPs work in practices they don’t own.

Consultation with GPs by the National Health Workforce Secretariat reveals this change is partly due to GPs wanting to achieve better work–life balance, but also because they perceive increasing bureaucracy as driving up practice costs, making ownership less attractive. These changed ownership structures have pushed effective management practice to the fore. But it has created another issue. If GPs aren’t owners or part owners in their business, the financial incentive to maximise efficiency, and perhaps even patient outcome, might be diminished.

Dr Robyn King, a researcher at UQ Business School, has made a study of how patterns of ownership are associated with the design of management systems which encourage or direct the GPs to meet externally imposed criteria to get those PIP payments.

But GP clinics have distinctive management challenges. It’s a highly-skilled profession, and many studies have found that highly trained professionals don’t react well to bureaucratic rules and policies. “Managers have to manage sensitively in order to get a consensus,” King says.

Dr King’s research, supported by the generous cooperation of the Australian Association of Practice Managers and their membership, has helped shed light on what managers can do to encourage GPs to achieve organisational goals. She has found that not only are management systems vitally important but the best management system depends on the type of ownership each clinic has.

“It’s not one-size-fits-all,” says King. “You have to manage according to the ownership structures in place.”

Essentially, King’s research has shown that big clinics, where doctors aren’t owners, rely on more formal structures and budgets; but clinics owned by doctors themselves harness their strength – the intimate involvement of the doctors in the business – and tap into deeper things, like values that can be enriched by social interaction. King found that management systems matter. GP clinics that didn’t have any management control systems had lower levels of organisational performance.

Gary Smith, a practice consultant and Practice Manager at Tindale Family Practice in Penrith, NSW, agrees that systems, including workflow and IT systems, are key to performance. “The profitability of any business is about the efficiency of systems; you have to implement systems that are efficient to the total operation of the business.”

Tindale, for example, has a system to minimise patient contact with the front desk to just once. The practice is primarily a bulk billing practice and it partially prints the Medicare assignment form and gives it to the patient to take into the doctor. When the consultation is over, the doctor and patient complete the voucher and the patient leaves without going back to reception. It halves the front desk contacts and lowers staff costs. It also cuts patient aggravation. “The practice has lower running costs as a result of an effective system,” Smith says.

But what King also found is that the type of system – the system that will drive the best performance – depends on the level of group ownership. In practices with low ownership by GPs, the most effective management systems featured controls that were more formal and proscriptive: the controls outline what is not to be done. They also had a greater reliance on tools like budgets.

Danny Haydon, who runs GP consultancy service, Haydon Practice Innovations, and is Executive Officer at Clare Medical Centre in South Australia, has worked with medical practioners for 20 years, and believes this finding is important. “Organisations that contract in GPs who don’t have an equity or investment in the practice are reliant on financial targets and use those targets to push for financial outcomes and performance benchmarks,” he says.

In clinics with high GP ownership, however, the most effective control systems were less formal. The effective systems emphasised cultural controls, including selecting GPs with similar values, utilising social gatherings which encouraged sharing information and experience between colleagues.

“Practices with high GP ownership that understand their purpose and core values will achieve good outcomes; better outcomes than if they just focussed on financial outcomes.”

When Haydon started working at his current practice 10 years ago, he worked with the GPs to understand their core values. They determined the practice would be based on the values of a healthy family environment: respect, honesty, personal growth, trust, security and fun. “Every decision a business makes reflects back to their corporate values,” he says. “If you don’t understand them or don’t have them articulated, it means decisions made aren’t as well grounded, are often inconsistent and have the potential to create conflict.”

Does that mean that things like budgets don’t matter for high GP-ownership clinics? The answer is no. “Even for high-level GP ownership I still think budgets and targets have a place,” Haydon says. “but they aren’t there to drive performance. Budgets and targets in high GP-ownership are about monitoring. The focus for performance is more about purpose, values, processes and patient outcomes.”

COST, CARING AND COMPLEXITY

Dr Stan Goldstein, Head of Clinical Advisory at BUPA Australia, sees the question of GP efficiency as one piece in the broader puzzle of the evolution of this complex, highly political and emotionally intricate area that is driven by health economics.

“Healthcare costs are rising much faster than CPI so it becomes the ‘bang for buck’ debate, or incremental cost versus incremental benefit to the health of the whole population,” he says.
And then there’s consumer expectation. “Community norms have changed our expectations of health care. The patient is a customer, and an expectation of service and a level of mistrust are replacing the gratitude we used to feel. Media and consumer advocacy groups tend to create suspicion among consumers of the potential ills at the hands of unscrupulous or careless health professionals.”

The ageing population base is also creating challenges. “Older people have increased health care needs, and the increased costs are compounded by the gap in the workforce left as the baby boomer population demographic reaches retirement years, leaving a depleted workforce to cover the cost of retirement care.”

Add to these red tape, onerous government oversight, confusing cost structures between state and federal governments, long working hours, an employment market that offers more lucrative conditions for arguably less demanding responsibilities, and emerging challenges and opportunities of new technologies: the challenges for GPs are many, varied and potentially overwhelming.

DIGITAL PRACTICES

Michael Gill of Organisation Performance Consultants is a consultant to the health care industry. “I am struck by the lack of debate around the business side of general practice,” he says. “So few practices are adopting the full potential of e-health tools and control systems to increase their reach and scope.”

A time and motion study of practices in mental health, general practice and aged care primary providers undertaken by his organisation found that the management of paperwork and fielding phone calls can take up considerable time each week.

“This is a cost to the business. Introducing information and communications technology (ICT) reduces admin and has an impact on the whole running of any practice by saving up to 10 hours of a full-time staff member’s workload every week. Money that could be spent towards employing a practice nurse, for example.”

Based on the study, Gill calculates that best practice implementation of ICT in a practice of five to six GPs could save up to $50,000 a year in time saved and in reduced handling, management and storage of paper records.