Fact Check: I Could Use More Staff But Can’t Afford To Add Staff

In the first part of a series looking at common claims made by physicians in regard to managing their practice, let us take a closer look at the dilemma of whether one should add office staff or not.

Claim #1: I could use more staff but I just can’t afford them.

So many doctors, while reviewing overhead, agonize over seeing that a good chunk of expenditures goes to staff payroll. This is true. It does. Then sadly, their first emotional reaction to stop the perceived bleeding is to hastily cut staff. The cuts usually occur where it hurts the practice most. This would be considered an impulsive move, not unlike buying some chocolate bars, a flashlight, batteries (just in case), chips, gum, and several packs of gummy bears all while waiting in a checkout line at your local grocer. The same thing could be said for hiring additional staff. One should use a rational/realistic approach to making staff decisions. Weigh the risks versus the benefits by asking meaningful questions:

a) Would you see as many patients without the help of current staff?

b) Is there a potential to see more patients if you had more staff?

c) Would additional staff help reduce doctor-patient face-to-face time?

d) Would a more qualified and better trained staff increase revenue?

One thing to consider is wasted overtime pay. A top wage earner in one office I worked with rejected hiring additional staff yet was paid an absurd 20-25+ hours of overtime at time and a half. We immediately eliminated her overtime and hired another pair of hands (part-time to start) at a much lower rate to offload the lesser, time-consuming tasks from this higher paid employee’s plate. The result: improved productivity, less payout.

One could apply a similar formula to those doctors who insist on doing everything themselves. Responsible delegation of minor tasks to lower paid staff frees doctors up to see more patients and generate more revenue. This is simple math.

Proceed to look at the payroll ratio. A generally accepted range for maximum staff efficiency is 22 to 25 percent. In a medical practice, wages should be viewed not as a cost but rather an investment center. That is determined by dividing your total staff payroll (including taxes, benefits, etc., and void of any associate salaries) by your gross receipts. By no means is this numeric range foolproof. Payroll ratios that are too high or too low will reduce the return on investment, may affect practitioner productivity negatively and may become an impediment to future growth. Some offices function more effectively on lower ratios and some on higher ratios depending on a variety of internal factors. It is, however, one calculable metric to look at and track.

Finally, it would be ridiculous to not acknowledge the obvious. If staff are seen standing around while you are running around, something is drastically wrong. It is possible you hired the wrong staff. Perhaps, they are ineffectively managed or utilized. Maybe they lack proper training or perhaps your patient load does not warrant a large staff. It could be all of the above.

In truth, there are plenty of jobs and projects they can do independently or be directed to do specifically that will ultimately pay off in terms of practice growth from efficient, productive and financial standpoints. Developing and managing good staff is essential. It doesn’t end there though. Knowing where and how to effectively utilize your staff to their potential is the secret to your success.

Before jumping to any rushed decisions, stop and think of the possible outcome of your actions. Someone recently said, “We don’t make mistakes. We make choices.” That is a fact.

Coming next – Claim #2: It doesn’t matter if we start late. We always finish by the end of the day.