To better manage their financial operations, cosmetic surgeons should look at "everything they didn't teach you about managing money in your practices," according to practice management consultant Karen Zupco.
"The goal is for cosmetic surgeons to get a grip on (1) their systems, (2) their overhead and expenses, (3) how to improve their income, and (4) how to install system safeguards to protect them from creative bookkeepers," Ms. Zupco says. "There is no substitute for paying attention and hiring solid people whose background and references have been checked within an inch of their lives."
Ms. Zupco, president of KarenZupko & Associates, Inc., Chicago, presented a four-hour course on managing practice finances at the Practice Management Meeting of the American Society of Plastic Surgeons (ASPS) recently in Chicago.Easy way outAccording to Ms. Zupco, sub-optimally managed practices have fee schedules that "change with the full moon." They also have no protocols for recording charges, adjustments and payments. "It's whatever the person sitting at the front desk this month decides to do — or what the person who has been sitting there for years has decided he or she will do," she says. "And sub-optimal practices never check credit histories before they hire people — thus people with a reason 'to borrow' are never detected."
Ms. Zupco also commented on financial systems, budgeting, ordering and depositing habits.
"[Doctors] lump the practice, operating room and skincare into one big financial statement and whine about high overhead," she says. "Budgeting? Who needs a budget? Of course, all multimillion-dollar [companies] are run this way — how silly to suggest a budget. Financial controls? 'Naw, we don't need those...we trust these [people], they've been with me for years.' It's usually the most loyal [people] who make off with the most money," Ms. Zupco says.
As for ordering, "Sure, it's everyone's job," Ms. Zupco explains. "[If] you want something for the office or the operating room, call and have it delivered. No one will check the price you paid or the purchase order. Purchase order? What's a purchase order? [Practitioners] typically still handwrite checks and wouldn't dream of using an automated system correctly. They lump injectable drugs into a giant category called 'medical supplies.' The accountant last had an insightful and bright idea, oh, back when the first Bush was president. Daily deposits? 'Heck, no. The bank is too far away.' You get the picture."
If any of the above are occurring in your practice, get help now, counsels Ms. Zupco. "Benchmarking is the best way to know if you are making progress," she says. "Measure your current month against last year at the same time; revenue up with expenses eating every dime? That's a problem."
Discipline requiredMs. Zupco's recommendations require discipline — in short supply in most practices, she says.
"Staff members generally do what they want to, when they want to," she says. "Consider the practice that didn't have its year-end numbers on June 1 — the accountant just hadn't gotten around to it. [Or staff members] say, 'No, we won't do that...'" When this happens, surgeons should immediately advertise for new staff members, according to Ms. Zupco. "[These people] won't be able to find work in any other practice that's managed," she says. "Why doctors feel the need to negotiate with people who aren't their partners is beyond me. It's the doctors' business and they should decide how it's going to be run."
Delays in installation of software, lack of training, poor training — all are predictable and avoidable problems, she adds.