Manage Staff Costs

Hiring the right number of staff and paying staff at the right level are both key factors in managing staff costs and office overhead.

What is the optimal number of staff?
The optimal number of staff is an elusive number since so much depends on practice type and practice style. We have seen practices run cost effectively with a ratio of fewer than three staff per ophthalmologist as well as with a ratio of as many as eight staff per ophthalmologist.

Categories of Staff
Staff is traditionally divided into three basic categories.

  • Back office (clinical staff, techs, supplies, contact lenses, refractions, assisting with patients)
  • Front office (reception, appointment scheduling, co-pay collections, authorizations, patient registration)
  • Business office (billing and receivables management, accounts payable, payroll)

Considerations for Back Office Staffing
In theory, having more staff can help move patients faster through the examination process. Make sure, however, that having more staff is an enhancement rather than a stumbling block and that you have the space to move patients through the exam. Ask yourself the following questions:

1. Do you have at least two lanes available for each ophthalmologist?
2. Do you have space for refraction and dilation separate from those lanes?
3. Do you have a “traffic officer”and procedures for regulating traffic flow?
4. Do you have enough staff to support the work of the back office? That is, do you have someone besides the back office techs to do surgical scheduling, contact lens ordering and fitting, and supplies ordering?
5. Do your practice’s physician schedules provide all-day work for the back office staff, or are there lag times and underutilized staff? If this is the case, can you create job shares to fully (and appropriately) utilize such staff?

Considerations for Front Office Staffing
The “hello” and “goodbye” desk is often staffed by the same employee or by staff also responsible for back office or business office tasks. This staff sharing can backfire when the front office staff have to deal with time-consuming efforts to obtain authorizations or with privacy issues at the same time as collecting co-payments, etc. You want to make sure that the shared use of front office staff does not create a negative impression on patients or detain them from leaving the office at the end of an appointment.

Considerations for Business Office Staffing

1. Are bookkeeping and payroll outsourced? If not, you will need to support these services. Have you evaluated the cost of outsourcing versus the cost of keeping this function in-house?

2. Is your computer system efficient enough to support the work of one or more full-time employees (FTEs)? That is, does the computer capture demographics, generate bills, submit claims, easily produce aged reports, etc.? Remember, even if you have only one FTE for the front office, you still want a check-and-balance to protect you against the same person routinely entering payments and charges. Keep in mind that understaffing the billing office might be a false economy since failure to manage receivables and claims submissions can be more costly than the cost for staffing.

Staff Salaries
The biggest challenge in hiring new staff (aside from identifying and hiring the highest quality people) is determining the salary range that will attract and retain the best quality candidates. The wide variance in salaries from community to community deflates the value of national salary surveys. You need to supplement those national surveys with local information from other practices, community colleges, training centers, and local and state medical societies.

Analyzing Staff Costs
Begin by analyzing staff costs in order to allow you to apportion your staff among the various practice revenue centers (Medical-Surgical, Optical Dispensing, Contact Lenses, Refractive Surgery, Cosmetic Surgery, etc.). Most practices will allocate percentages of each staff member’s time to the various revenue centers. You’ll need to track the staff cost for each line of business, both by total dollars and as a percentage of the line’s income. The following table represents hypothetical numbers to demonstrate this concept.

 

Business Line

Total Staff Cost

Income

Staff Cost as a % of Income

Staff Cost as a % of Income (Last Year)

Medical-Surgical

$192,360

$854,935

22.50%

24.20%

Optical Dispensing

$34,937

$226,865

15.40%

18.55%

Refractive Surgery

$28,125

$270,000

10.42%

15.00%

Contact Lenses

$9,000

$60,000

15.00%

16.50%

Total

$264,423

$1,411,800

% of Total

18.73%

19.95%

The Medical Group Management Association (MGMA) as well as the Association of Technical Personnel in Ophthalmology (ATPO) publish survey data annually on overhead costs, by category, as a percentage of income. This data may need to be adjusted for your specific practice circumstances to accommodate variations in practice size and in patient or service mixes. Contact MGMA or ATPO (for a direct link to the survey) at http://www.atpo.org/PRODUCTS/SURVEYAD.htm.

Ron Rosenberg, PA, MPH, Author Practice Management Resource Group
Irene Chriss, Editor Director, AAO Practice Management Dept.