As John Foster Dulles said, the measure of success isn't whether you have a tough problem, but whether it's the same one you had last year. A lot of practices have been looking at the same old business problems for so long that they get in a rut and begin to lose their depth perception.

The reason? Usually, everyone in the practice has too much to do. The administrator is too busy to train the employees, who are struggling just to keep up. The physicians are too busy to participate in policy decisions. Everybody is focusing on hour-by-hour work with no time to get organized.

Eventually, the stress level reaches the point that a physician says, "Let's hire a consultant."

There's no question that hiring a consultant can be extremely helpful. A qualified management consultant will offer you a unique mix of problem solving skills to help you get out of your rut. The problem is, it's possible to waste a ton of money on management consultants -- if you're not careful.

What a consultant should and shouldn't do

According to the old joke, a management consultant is someone who borrows your watch to tell you what time it is. Actually, that's not too far off the mark. When a consultant comes up with good ideas for change, the ideas often have the ring of the self-evident. (In fact, when a consultant comes up with an esoteric solution that you wouldn't have considered in a million years, beware. A good idea should seem like exactly that: a good idea.)

The management consultant is analogous to the physician consultant. Management consultants diagnose problems in practices and place them in a realistic and knowledge-based context. They prescribe a regimen of therapy for the practice to follow. They educate the practice on how to get well and prevent future onset of the problem.

What most management consultants don't do is take on the responsibility of nursing the patient back to health. Instead, they refer the patient back to the "primary care" office manager or administrator for that purpose.

Some management consultants also offer other, non-management services. These may include tax advice, accounting services, retirement plan administration and personal financial planning. It's important, however, to make the distinction between these technical services and "management consulting." Medical practice management consulting concentrates on how your practice is earning money, not on how your practice spends it on taxes or saves it for retirement. This means providing advice on raising productivity, marketing, strategic planning, and operating efficiency. It usually includes evaluating the billing and collection systems, patient flow systems, personnel administration, overhead, and the like.

The well-qualified consultant

A good management consultant may have formal training in management with a bachelor's or master's degree in a business discipline. But that's neither essential nor sufficient.

Instead, the best management consultants get their good results by applying what they've learned from a huge array of experiences to the facts and circumstances of your situation, in an un-biased way. This means that having spent 10 years as a clinic administrator for a single group practice isn't enough experience to do a credible job of consulting. Actually, 1 year of employment in each of 10 different settings would be much better.

The fact is, management consultants get better as they get older and more experienced. Consulting is not an entry-level job, and the advice offered by junior consultants at larger firms can be naive (even though well-intentioned.)

For example, I know a consultant who embarrassed himself early in his career by recommending that his client remove the telephones from the exam rooms to save money. His analysis show-ed that patients were making expensive long distance phone calls while waiting for the physician to enter the room.

What he failed to learn before he wrote his report was that the phones were there expressly for that purpose. The doctors had placed them there as an amenity for VIP patients, and they were well aware of the cost (and the benefit) of providing the service.

Why doctors call for help

The problems practices face are varied, but a few common themes lead physicians to call management consultants. They include:

�        "How are we doing?" When the physicians in a practice feel an undefined sense of dissatisfaction or bewilderment, they may bring in a consultant to serve as an interpreter. They may be unsure what they're entitled to expect from the practice or their managers.

�        Avoiding a confrontation. Some-times a doctor calls a consultant in order to avoid a confrontation with a colleague or an employee. (We've been involved in numerous consulting assignments where a physician was the problem and his associates were unwilling or unable to confront him.)

�        Checking out a staff member. Sometimes doctors hire a consultant to address a loss of confidence in the manager. A variation of this is the "secret agenda" consult, when a doctor or a faction in the practice wants the consultant to "get the goods" on the administrator or a colleague.

�        Resolving a crisis. Consultants occasionally get called when systems have deteriorated to the point that the doctor can't escape noticing. (For example, when the physician misses two paychecks in a row!) Like patients, physi- cians often wait much longer than they should to call for help -- and even then, they're often not eager to make the needed changes.

Fortunately, as with most patients' health problems, it's never too late to get started on a solution.

When should you call?

First of all, don't ask a consultant whether you need his help. (You don't ask a barber whether you need a haircut -- you know what the answer will be!)

Here are some good reasons to consider bringing in an outside expert:

�        Your practice seems to be heading for trouble. Symptoms could include rising overhead, falling cash receipts or an increase in employee or physician turnover.

�        Your practice is stalled in a routine of ordinary performance. Physician income is flat compared to prior years.

�        Your practice is a top performer in your area and you're looking for ways to get even better.

�        You may need expert counsel if you're about to:

o       move into new facilities

o       establish one or more satellite locations

o       start a new marketing strategy

o       merge or acquire a practice

o       add or remove a physician

o       address a new idea proposed by a hospital, such as an integrated practice formation.

�        Your manager can't get the uninterrupted time needed to study a specific problem in depth. It might be a physician productivity problem, an appointment scheduling issue or have to do with telephone management, personnel turnover, fee or reimbursement and coding analysis, or internal controls.

�        A manager or a colleague is complaining about an issue and you can't tell how serious the problem is. It may be time to have a consultant come and study it. (In fact, just proposing a consulting engagement can sometimes lead to an internal solution of the problem, saving you the cost of a professional analysis.)

�        Very sensitive issues place members of your practice in a difficult position. For example, doctors may have difficulty negotiating with each other about the income formula, buy/sell terms or workload distribution. Or, if a physician's behavior is a problem -- he's sleeping with employees, engaging in illegal or unethical behaviors, acting antisocially, or showing signs of deteriorating medical skills -- a consultant may be able to resolve the problem diplomatically.

In this last category, a one-shot management consultant may be able to be more candid and effective than an advisor who has an ongoing relationship with the practice.

Similarly, your practice accountant may be a good source of general business advice for most issues, but he may be unwilling to jeopardize his relationship with the practice (and continued fee stream) by getting too close to sensitive issues.

What are the risks?

Introducing a management consultant to your practice should be a beneficial exercise, but there are no guarantees. Problems that you could conceivably encounter include:

�        Some employees may feel threatened or insecure because of the mere presence of a consultant. However, a good consultant will be able to keep this from getting out of hand.

�        Some consultants are better communicators that others. A poor communicator can be disruptive to a practice.

�        Some consultants may simply be uninspired, applying the same cookbook solution in every situation, yielding a poor result some of the time. Not only is this a waste of money, it could harm your practice.

�        If you're not careful, you can end up hiring an amateur. Unfortunately, management consulting is a field laden with beginners. Sometimes it seems as if every "between jobs" office manager is in the business. An inexperienced consultant may bluff his way through a new situation instead of being candid with you about his lack of experience. It's hard for some consultants to say "I don't know."

The best way to avoid these last three problems is to carefully check your consultant's references. A good consultant is likely to have a lot of satisfied clients; talking to a few of them should tell you whether you're on the right track. And remember: The more those practices resemble your practice, the more logical the fit.

Also, be sure the references you're checking are for the consultant you'll be working with, not just his firm. It does little good to work with a well-known firm if you're assigned an inexperienced junior member of the staff.

If the prospective consultant has no references, carefully consider whether you want your practice to be one of his learning experiences. Sure, it's cheaper to get your hair cut at the barber college, but no matter how bad the haircut, your hair will grow back again. Retaining a trainee consultant could have more serious consequences.

Making the call

Remember: The most successful people in any field know when to ask for help. When the issues at stake are significant in scope, have serious consequences and fall outside your own experience, it's time to call in an expert. A consultant may be able to offer you just the help you need.

The Typical Client

From our own consulting experience, garnered over the past 25 years, we've compiled a profile of the average client. Generally, practices that call in a consultant share the following characteristics:

�        They're usually better-than-average performers with a desire to continue improving.

�        They're usually single-specialty practices, 1 to 10 physicians in size. Larger practices are less inclined to retain outside consultants because their in-house professional manager is expected to provide all the solutions to problems. (The exception to this rule is the faculty practice in a teaching hospital setting. Residency programs and faculty practices tend to retain lots of consulting services.)

�        More often than not, they're surgical or consulting medical practices with a bias toward action. These are practices that can more easily afford the kind of specialist advice that keeps them ahead of the pack.

How Consultants Work

While each consulting firm has its own approach and methodology, you can usually expect to go through a process like this:

�        Paperwork. First, the consultant will ask you to gather some data about the way things work in your practice. He'll probably ask you to fill out a few forms to provide some baseline facts about practice volume, charges and collections, appointment scheduling, telephone activity and the people on your staff. This is often supplemented with questionnaires for everyone in the practice, asking what problems they've observed and what issues need attention.

�        Interviewing. Most consultants prefer to conduct individual employee and physician interviews in confidential sessions, but some consultants work in group interview sessions to save time. The employees frequently know what's wrong in the practice and how to fix it. A skillful interviewer will be able to elicit that information.

�        Observation. When the consultant actually watches the work being done, his recommendations will be more on target. (But make sure that every recommendation is the solution to a problem, not a justification of the consultant's fee.) System testing is important, too, because employee reports of how the practice works may not be accurate.

�        Analysis. Next, the consultant combines the opinions and facts gathered from the practice and uses his experience to develop recommendations. These are often delivered in a written report, although some consultants prefer to deliver them orally in a debriefing conference. The written report of recommendations becomes a working document for the practice -- an implementation plan for improvement.

�        Follow-up. The consultant may schedule follow-up visits or provide telephone follow-up service as part of the process. In some cases, follow-up may take the form of in-service training sessions for the staff. This can be more effective than sending employees to workshops and seminars because the consultant has become intimately familiar with your practice and can customize the training to meet your specific needs.

Jeffrey J. Denning is a management consultant with Practice Performance Group.� You can reach him at (800) 452-1768 or on the Web at www.ppgconsulting.com.