Silkin Management Group consultants help their clients with a variety of practice management issues including hiring and training staff, job descriptions and office policies, marketing for new patients and numerous other aspects of running a health care practice.

Often, when clients have been with Silkin Management Group for a period of time, they grow to a point where they take on an associate and, at some point look at bringing them on as a partner. Below is an example arrangement that Silkin Management Group consultants give their dental clients who are looking at such an arrangement.

Here are the salient points.

• Have the practice appraised after the first year with the associate
Use the formula below to appraise it:

Revenues (year before associate + year of the associate) x 60%
2

• The associate locks in the ability to buy ½ of the practice at the valuation rate determined using the above formula even though he’ll actually buy the practice in three years.
• The associate’s income goes up from 35% after lab to 40% after lab. The associate keeps 30%; the other 10% goes into escrow.
• The associate uses the money accrued in the escrow account to be the down payment for the buy-in and gets a loan from a bank to handle the amount owing.

Assumptions:

• The practice will continue to grow to produce enough money into escrow.
• The owner can reduce his time in the practice.

Advantages:

1. To associate:

In the fourth year, when the associate actually buys the practice, he buys into something that has already appreciated tremendously. In one actual example the practice was originally valued at $540,000 which meant his buy was $270,000. But in the fourth year when he bought in, the practice was now worth $811,000 meaning his share was ½ or $405,000. (This is a net of $135,000 or a 50% ROI in three years.)

2. To original owner:

a. He/she gets extra net income each of the four years before the associate becomes a partner.
b. He/she gets the full value of the practice as it was appraised when the associate started on the partnership track. In other words, he/she gets the $270,000 (which is ½ of what the practice was valued at before the associate got on the partnership track).
c. He/she still owns 50% of the new value of the practice, which in this case is $405,000.

The above is only one type of buy-in arrangement that Silkin Management Group consultants have in their arsenal for clients interested in bringing on an associate as a potential future partner. For more information about other ways Silkin Management Group can help you with associates or any other practice management issue, call us at 800-695-0257 or visit our website at www.silkinmanagementgroup.com

SCOTT BARNARD
Silkin Management Group Consultant

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Last week we presented two articles on our different Silkin Management Group blog sites covering some key points that any practice owner can use when analyzing their practice. These articles are designed to help practice owners, whether Silkin Management Group clients or not, with some tools to look into their practice and evaluate what can be improved.

All of these points are probed in depth by our consultants when meeting with a new Silkin Management Group client for the first time. From the consultant’s evaluation of the practice a unique program is written to resolve the key issues that may be hindering practice growth and causing the doctor stress.

In our first two articles we went over human resource issues and marketing/ sales issues. You can link to these articles at the following Silkin Management Group blog sites:  http://bit.ly/JImEoY and http://bit.ly/IJLLdm . Today we’ll offer up some questions and points to look into regarding the financial aspect of a practice.

Income:

• What is the amount of your accounts receivable?
• What percent is over 60 days? 90 days?
• Do you have any problems with collections on your accounts?
• What is the income of your company? How does it compare to your production? Do you have a formula for computing production versus income and know what is a viable range?
• Has your accounts receivable been going up or down?
• Do you have written patient finance policy?

Outgo:

• How much are your accounts payable?
• How far back does the aging go?
• Are you having any problems with your creditors?
• Have you been able to keep expenses down or do they sometimes get out of hand?
• Who does the purchasing for your office?
• How do they know they’re getting the best deal?
• Do you have a purchase order system in so that money doesn’t get spent without financial planning approval.

General:

• What does it cost to run your operation?
• What is % salaries?
• What % is overhead?
• What % gross profit do you have?
• Do you do regular financial planning to insure overspending doesn’t occur?
• Do you have a budget based upon known income and expenses?
• Are your corporate records in good shape and defensible for tax purposes?

GARY CRAWSHAW
Silkin Management Group Consultant

For more information about this subject or practice management in general, visit our website at www.silkinmanagementgroup.com or like us on Facebook at http://www.facebook.com/silkinmanagementgroup

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It is not uncommon for new and existing Silkin Management Group clients to have a spouse or family member as a staff member or possibly be looking at hiring one of them for a position in the office. We often see a spouse as an Office Manager or potential Office Manager and are regularly asked if this is a good idea or not. Below are the points to consider that Silkin Management Group consultants go over with their clients who have this issue to look at. Here are some of the pros and cons.

Pros:

• Familiarity. You know the person and hopefully get along with the person better than someone you don’t know or are only acquainted with through the office.

• Working with a family member you like can be fun.

• Since you know the person well, you will be aware of their strengths and weaknesses.

• The trust factor will be higher with a family member. You shouldn’t have to worry about them handling any financial aspect of the practice.

Cons:

• Familiarity. Yes, that’s right. The same point as mentioned above in the “Pros”. Being so familiar with each other, it is often hard to draw the line between the “boss/employee” relationship.

• Disciplining a family member can be very problematic and very uncomfortable. And, if you don’t follow your office policies strictly for family members while applying them for non-family members, you can open yourself up to a discrimination charge.

• Mixing business with family. This is extremely important when spouses are working together. It can make it very difficult to separate out the business experience and home life. Often office problems can be brought home and make life at home problematic. Relationship problems can come about where the two situations are consistently mixed.

Overall, Silkin Management Group consultants generally find that, unless there is a superb mix between the family members, it is safer to keep the relationships separate and not mix family and business. We often find that when a spouse is an office manager that we end up working out how to effectively replace them and both parties end up much happier.

SCOTT BARNARD
Consultant for Silkin Management Group

For more information about Silkin Management Group, visit our Facebook page at http://www.facebook.com/silkinmanagementgroup and/or visit our website at www.silkinmanagementgroup.com

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Clients new to Silkin Management Group often need help with hiring good employees. This comes about from poor previous hiring practices and/or new expansion in their productivity requiring more personnel. In either case proper recruitment procedures are a must and something that Silkin Management Group consultants are very good at.

With the proliferation of social media sites, one of the questions that comes up is whether or not an employer who is reviewing several applicants should investigate an applicant’s social media page such as Facebook. Here are some issues to consider in this area.

• Is the data posted always accurate? Certainly most people are putting data on their site for social rather than business purposes.

• Context is important. Many people post pictures of themselves at different functions, including parties. Should you be concerned if they are drinking or seemingly hanging around what seems to be a wild crowd? You often just cannot tell from pictures what the full context is. Again, the site is normally being used for social purposes, not business related purposes and what you see on the site has little to do with what kind of employee they might be.

• If you look at one candidate’s social media page, you better look at every candidate’s page/s. If you don’t, you are opening yourself up for a discrimination claim. Why did you look at Jane Smith’s page and not John Jones’s page? That could show potential discrimination against women. Any information that you gather for hiring purposes has to be done consistently as part of the screening process with everyone applying.

• There are social networking sites that are employment related, such as LinkedIn. If you want to check out a networking site, ask the candidate if they are on any business related social networking sites such as LinkedIn. This would be a much more proper investigation than reviewing their Facebook site or other similar sites.

Silkin Management Group can help you with hiring good employees. We have a variety of interviewing and testing procedures that greatly increase your odds of hiring the best people for the job. If you have interest in this area visit our website to find out more: www.silkinmanagementgroup.com

GARY CRAWSHAW
Silkin Management Group Consultant

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In our last Silkin Management Group blog we discussed some issues regarding the FLSA (Federal Labor Standards Act), most specifically concerning discharge and suspensions without pay. You can link to that Silkin Management Group blog site here: http://bit.ly/HVL1Ob

First of all, what is the FSLA? This law was written in 1938 and frankly is a bit outdated. The law essentially establishes rules concerning youth employment standards, proper record keeping, overtime pay and minimum wage. The law is old and confusing and, as a result, the Department of Labor has estimated that 70% of businesses are unknowingly violating some points of the law.

With the advent of cell phones, IPads, laptop computers, home computers, email, etc., that great employee of yours who answers their work related email over lunch or at home could get you into trouble. And, with continually expanding technology at our fingertips, its use relative to work is extremely hard to regulate.

For example, let’s say you have a great employee who is an hourly wage earner. They sometimes take lunch at their desk and, while chewing on that sandwich, answer their email, some of which is work related. Or they go home at night, fire up their home computer and catch up on email and answer a few work related emails. Or do something similar on their IPad while at the restaurant waiting for their meal to be served. Wow, what a great employee, you think. She is so responsible that she handles things when she sees them and doesn’t put them off. What a jewel! A perfect staff member!

Well, that jewel can get you into some trouble. Here’s why. If that employee is an hourly employee and those times that she is checking her email over lunch or at home or whenever could easily take that person over 40 hours a week and thus qualify for overtime. And it could violate state or federal laws for how much lunch and/or break time is required. At the same time, because she is a great employee, she probably does not take these small pieces of time that she is checking email as time that she is working to count towards her 40 hours or to take her over 40 hours. Since she is a good employee, you’ll likely never hear about it as she doesn’t think about it either.

But what happens if a “bad apple” employee leaves employment and decides, for whatever reason, to legally attack you? Maybe this “bad apple” did something similar a few times and is looking for ways to cause you trouble and finds out about this potential situation. This person attacks you for unpaid overtime and includes in their attack that this is occurring with many other employees. Next thing you know the local labor board is investigating and fining you for not paying overtime. You then have to come up with thousands and thousands of dollars to set things straight.

This is not an unreal example. We have seen it happen on numerous occasions.

So, as we advise Silkin Management Group clients, make sure you have policies in place that cover work hours, working over meals and outside the office, etc. so that employees are educated in this. In an upcoming Silkin Management Group blog we’ll go over some ways to properly police this activity that will help you avoid trouble, whether you are a Silkin Management Group client or not.

SCOTT BARNARD
Silkin Management Group Consultant

Visit our website at www.silkinmanagementgroup.com and/or like us on Facebook at http://www.facebook.com/silkinmanagementgroup

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Many small business owners, including Silkin Management Group clients, are unclear and/or unaware of what to do when one of their employees is called for jury duty. The natural response is “we can’t afford to let an employee off for any significant amount of time so I won’t let them go”. Unfortunately there are laws in almost every state that make such a response not only illegal, but can subject you to fines.

In Silkin Management Group’s 400 plus page Office Policy and Job Description Manual we cover policies on jury duty, maternity leave, vacation time, etc. so that our clients have specific written policies that properly informs their staff on these matters.

For those of you who are reading this blog who don’t have that Silkin manual, I thought I’d give a few pointers on jury duty and employees.

• The first and most important thing you can do is to check your state laws regarding jury duty and time off. Almost every state has very clear laws on this subject and requires employers to give time off to employees who are called for jury duty.

• When checking your state law find out whether you have to pay your employee while they are on jury duty. Most states do not require this, but there are a few that require the employee to be paid their salary, minus whatever pay they receive from the court, for their time on jury duty.

• Again, check the laws in your state, but most every state explicitly prohibits any employer from threatening employees in any way, including firing and disciplining, over jury duty. You could end up in big trouble if you engage in any such act.

• If you violate any of the laws in your state you could get fined, sued for back pay and attorney fees and other negative consequences including possible jail time. Therefore it is imperative that you know the jury duty laws in your state and always comply with them, as well as having written policy on the subject that conforms to these laws.

GARY CRAWSHAW
Silkin Management Group Consultant

For more information about Silkin Management Group’s Office Policy and Job Description Manual visit our website at www.silkinmanagementgroup.com. Like us on Facebook at http://www.facebook.com/silkinmanagementgroup

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Over the last several days, on our different Silkin Management Group blog sites, we’ve written about different scenarios that could be the result of the future Supreme Court ruling on the Affordable Care Act (ACA) passed a couple of years ago by the Obama Administration. This massive health care legislation has been called by many “Obama-Care”.

As most Silkin Management Group clients are health care providers, we feel it is important to keep our clients and anyone reading our various Silkin Management Group blogs abreast of the different aspects of this legislation. Today we thought we would bring up some key points that will need to be looked at if, as it preliminarily seems, the Supreme Court rules in June that the essence of legislation is unconstitutional resulting in a gutting of the ACA.  Here are some of the more popular ideas.

• Eliminating universal health insurance, as contained in the ACA.

• Getting costs down through rewarding preventative medicine.

• Allowing small businesses to pool together to buy insurance with lower costs due to the expanded base from pooling.

• Permitting people to buy insurance across state lines, thus expanding the size of potential pools resulting in lower rates.

• Introducing tax deductions and benefits for individual insurance purchases.

• Expanding HSAs (health savings accounts).

• Reducing and/or limiting mal-practice suits.

• Continuing the provision allowing children up to the age of 26 to be included in their parent’s policy.

• Continuing the provision that does not allow denying coverage or charging higher premiums for pre-existing conditions.

• Prohibit insurers, as does the ACA, from imposing annual or lifetime limits on spending for covered services.

• Insisting that rates paid by women are the same as rates paid by men for the same services or coverage.

• Giving states more determination and discretion regarding their insurance plans rather than it being a federally centralized system.

• Subsidizing high risk pools.

• Subsidizing catastrophic insurance with high deductibles.

These are just some of the more popular ideas that will be closely debated if the ACA is thrown out or gutted by the Supreme Court. We’ll discuss further potential scenarios and ramifications of the Supreme Court decision in future Silkin Management Group blogs.

JONO LOBUE
Silkin Management Group Consultant

“Like us” at Silkin Management Group’s Facebook page at: http://www.facebook.com/silkinmanagementgroup

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We’ve been covering the Affordable Care Act (sometimes called “Obama-Care”) for several years on our different Silkin Management Group sites. We have detailed the key points of this legislation and its requirements and effects on small businesses such as many Silkin Management Group clients.

Over the last two days we’ve gone over the key arguments that have been made before the Supreme Court concerning the constitutionality of the law. The first day’s debate concerned whether the Court should even be ruling on the case right now, whereas the second day concerned the key point of constitutional debate – whether the mandate for everyone to have health care insurance was legal. That part of the debate seemed to go in favor of the plaintiffs who want the legislation overturned. You can link to our blog about this at this Silkin Management Group blog site: http://bit.ly/H0UUer

Yesterday’s oral arguments concerned this issue: if the mandate is overturned, what happens to the rest of the ACA? There seemed to be no definitive leaning by the Court on this matter. In fact it seemed that the Justices were a bit torn on the matter. Justice Scalia noted, “My approach would say if you take the heart out of the statute, the statute’s gone.” Justice Bader Ginsburg felt that “the more conservative approach would be salvage rather than throwing out everything”.  But the practicality of that viewpoint was questioned by Justice Scalia. He brought up, “You really want us to go through 2700 pages?” “….go through this enormous bill item by item and decide each one?”

It is expected that the Court will issue a decision sometime in June. It will be very, very interesting to see how they decide on the mandate and, if they strike the mandate down, what they will do with the rest of the legislation. Whatever they decide, it will have a far reaching impact on many areas of society and will be a landmark decision, possibly the biggest in many decades.

In the meantime, some aspects of the ACA have already been implemented and will certainly not change while the Court is working out its decision. We’ll review these existing aspects in an upcoming Silkin Management Group blog.

DAVE MCKEVITT

Consultant for Silkin Management Group

Visit Silkin Management Group’s website at www.silkinmanagementgroup.com Like us at our Facebook page at http://www.facebook.com/silkinmanagementgroup

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Several weeks ago we began a series of articles presented on our various Silkin Management Group blog sites that went over some ideas of the basic job duties of the owner of a health care practice.

We decided to write about this because we know, through our 30 years of delivering practice management training and consulting, that very few doctors have clearly written job descriptions for each position in their office and none have a job description for a practice owner or for the doctor.

You can look at our last article on this subject by following the link below. That article will also refer you to other Silkin Management Group sites where you can view earlier articles on this subject:  http://bit.ly/zkACO1

SAMPLE JOB DESCRIPTION FOR THE OWNER OF A HEALTH CARE PRACTICE, CONTINUED:

• Although you should do everything possible to maintain good communication with staff, you are not a therapist and not expected to be. Staff should be corrected by referring them to the job description procedure or office policy they violated. If such policy or procedure isn’t covered in policy, ensure that this becomes a written part of procedure and is included with other job description materials.

• Never encourage staff to come to you with criticism of another staff member. Job procedures should include an effective and helpful system to air grievances and improve performance. If a staff member begins to do this, always direct them to the proper procedure for handling the matter, and the correct individual with whom they should speak, usually the office manager.

• Diagnose based upon patient needs and proper medical evaluation, not their financial capabilities.

• Do regular job performance reviews with your associates and office manager. Keep this as objective as possible, by evaluating work based on their written job description. Avoid “opinions” of others when it comes to fair evaluation of employees, unless there is actual data that supports what you are told.

• Clarify for your office manager and supervisory staff what information is important for you to have (should still go through office manager), and what can be handled by others. Try to delegate as much as you possibly can to your employees and give them an opportunity to take on greater responsibilities.

Future Silkin Management Group blogs will finish presenting additional ideas on what can be used for a practice owner’s job description.

JONO LOBUE
Silkin Management Group Consultant

Silkin Management Group’s 400 plus page Job Description and Office Policy Manual contains full job descriptions and lists of job duties for each job in a dental, veterinary and optometry office, including the owner’s and Doctor’s job description. To find out more about this manual visit our website at www.silkinmanagementgroup.com

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Yesterday we began a discussion about how receptionists in a health care office can handle potential patients/clients calling in to “shop prices” of services. You can read that article by linking to the following Silkin Management Group blog site: http://bit.ly/GC0yly

The key points made in yesterday’s article were:

• “Shoppers” are usually fairly ignorant about the service they are price shopping, but they ask about price because that is the only thing they have to compare about the service from one office to another.

• A shopper, underneath it all, is basically interested in getting good, honest and helpful service regarding their health care need. That is normally more important than the price, but they ask about price because they don’t know how to evaluate the service.

• When handling a shopper, you don’t just throw prices at them, rather you want to show genuine interest in them by asking them questions and developing a good rapport with them.

Here are some further ideas on how to accomplish the points above.

First, smoothly avoid directly answering their price question and turn it around to asking the person questions about them and their situation. Here are some examples that we give to Silkin Management Group clients:

Shopper: Hi. I’d like to know how much it costs to get a cleaning/dog spayed/eye exam…(or whatever they may be shopping for in your particular practice)

Receptionist: Well there’s really not a black and white answer to that question because it depends on what your situation is. Let me get a little information from you so I can attempt to better answer the question.

The receptionist would then ask a series of questions guided by how the potential patient/client answers. For example:

“Have you ever been in this office before?”

If not, ask, “How did you hear about our office” and/or “Are you new to this area?”

Then you can questions like where did they come from, how long have they been here, etc. Just be very friendly, establishing good rapport and, above all, be genuinely interested in the person. Your emphasis should be a high level of interest, developing rapport with good communication skills and developing a bond with the potential patient/client.

Once you have accomplished this, you would embark upon what they want handled. You could simply ask, “What exactly is the situation you are trying to handle by asking about this service?”

Get the person to tell you all about what their concern is, why they are looking at this particular service, what they want handled, what is bothering them, etc. The emphasis here is to get the patient talking about their needs and concerns. You want the patient/client to be doing the talking at this point. Let them tell you all about it, the more the better.

Once they are talked out then you can start discussing your service and possible prices but not before. We will go into how to do this in our next Silkin Management Group blog.

DAVE MCKEVITT
Silkin Management Group Consultant

For more information about Silkin Management Group, visit our website at www.silkinmanagementgroup.com or give us a call at 800-695-0257.

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