Make Better Decisions in Your Group Practice
Follow these steps to a smoother, more productive process.
By John B. Pinto

Ophthalmology practices large and small make hundreds of decisions a week. And even in the largest practices, most of these decisions are solitary, made by just one person, backed by years of clinical or clerical experience:

• "Should I work this patient into the schedule today or have her come in the morning?"
• "Is it time to operate?"
• "How should we code this visit?"

Relatively few decisions are made by two or more people acting together. Those that require consensus usually involve questions with bigger stakes:

• "Should we open a new satellite office?"
• "Should we fire Dr. Edwards?"
• "Should we accept this new low-fee insurance plan?"

Such decisions often involve developing office policies:

• "Should we allow patients to pick up their glasses without paying in full?"
• "Should we co-manage cataract surgery with optometrists?"

Whether making decisions individually, or as a group, we make so many decisions that we rarely stop to think about the process of decision making itself. In this article, I'll examine some techniques you can use to make better decisions in your group practice.

The decision is only one of three steps

Making a decision is just the middle-third of the three-part process of management: gather information/make decisions/take action.

Inevitably, every manager (surgeon or lay) is stronger at some of these steps, and weaker at others. We all know managers who make decisions without enough information, or who make what appear to be excellent decisions, but then don't act on them.

Few doctor groups get into internal struggles over the information they gather to make decisions, or even over how agreed upon actions are to be executed. Arguments are most often over what constitutes the right decision. Let's first cover a few success factors for making great group practice decisions, and some simple, practical guidelines you can apply in your group.

As the managing partner of every multidoctor practice knows, for every decision there's an equal and opposite criticism. Some difficult partners, perhaps as a holdover from their academic lives, feel it's their duty to argue out of the sheer joy of finding the one, right answer. The result? Doctors in group practices start avoiding difficult topics, or avoiding meetings altogether, because they abhor confrontation. In the course of my consulting sessions around the country, it's not unusual for me to come across practices with a tall stack of unfinished partner business.

Remember, there's a great deal of ambiguity inherent in most practice management decisions. You can't always send the matter out for a quick lab study and write the proven prescription. It's rarely even possible to gather all of the information needed to make a theoretically perfect decision. If you have a partner who keeps pushing for more data or more decision-making time, it may be helpful to remind him that in most cases the adverse consequences of an imperfect management solution are usually preferable to the consequences of a postponed decision.

In reality, the best decisions you make in your group practice aren't all calculated and rational. A strong case can be made for the value of intuition, especially at those forks in the road where either choice you make is likely to be objectively satisfactory. Canadian philosopher Paul Thagard points out two key advantages to intuitive decision-making:

"One obvious advantage is speed: An emotional reaction can be immediate and lead directly to a decision," he says. "If your choice is between chocolate and vanilla ice cream, it would be pointless to spend a lot of time and effort deliberating about the relative merits of the two flavors." Another advantage noted by Thagard is that basing your decisions on emotions helps to ensure that you're taking into account what you really care about, and are most likely to implement. "Decisions based on emotional intuitions lead directly to action; the positive feeling toward an option will motivate you to carry it out," he asserts.

Decisions in your practice should be categorized and sorted by their economic impact:

• As a practical matter, most small economic decisions (on the order of a few dollars) can be made by anyone in the practice.
• Off-budget items costing up to around $100 (more or less depending on the judgment of the individuals involved) can be decided by department heads.
• New expenditures in the +/-$500 range can certainly be decided by your practice manager or any thoughtful associate doctor. If you don't trust them to make decisions like this, they're either in the wrong position, or your practice is on the ropes financially.
• Off-budget decisions in +/-$5,000 range should be made by partners, subject to retrospective review by the board, of course. This level of spending authority might be double or more for your practice managing partner. Remember: Within the boundaries established by your annual budget, department heads, administrators and managing partners will appropriately have actual financial authority much higher than these figures.

Set some rules

Now let's examine bigger issues. How do the highest-functioning partners make decisions? To start, they have formal -- and frequently reviewed -- partner or shareholder agreements, which set down the rules for making decisions. These agreements, subject to input from legal counsel, obviously, should include the following:

Frequency of meetings. Partner meetings should occur at least monthly, with the office manager or administrator present, concurrent with a review of financial and volume performance. It may be useful to hold a second monthly meeting for the doctors to concentrate on clinical quality assurance and protocols. A retreat, or similar 1- to 3-day off-site meeting, should be held annually to refine the practice strategic plan, approve the next year's budget and affirm tactical priorities for the coming year. Ideally, this meeting will be moderated by your administrator or an outside advisor.

Election of a managing partner. Even in a two-partner practice, it's extremely enabling to name one person as the formal, managing partner in the practice. My preference is for the term to last 2 or more years, and for this to be a position compensated with an honorarium.

Apportionment of control. Will the practice give one vote to every partner, or, in those situations with different ownership percentages, will voting be proportional to ownership?

Simple-majority decisions. Whatever your group decides is a small- to medium-sized decision can be decided by a simple majority (e.g, three out of five votes). Note that it's highly disabling in all but the most gentle settings for decisions to require 100% consensus. In my work with clients, the simple adoption of majority and super-majority approval can lead to breakthroughs in making practice decisions and moving forward as an effective organization.

Super-majority decisions. Some major decisions, such as removal/admission of a partner, deserve a super-majority (e.g., four out of five votes).

Entrepreneurial "safety valve." You may have one partner who by age, nature or subspecialty training is more eager than his colleagues to buy new equipment, develop satellites or launch new marketing campaigns. Rather than having such risk-takers leave the practice, you should, on a case-by-case basis, allow them to be "intrapreneurs." As a simple example, a doctor desiring a new $500,000 laser that his colleagues are unwilling to buy might personally purchase this unit and lease it back to the practice at fair market rates. If he's correct in his judgment, he gains, and his partners aren't exposed to the risk. The same arrangement can be made with facilities or staff.

Tie-breaking arbitration. In practices with a potential for tied partner votes, especially two-partner practices, it would be appropriate to specify a tie-breaking mechanism, as by arbitration by an a respected outside expert.

Here's your path to better decisions

Following are 10 simple guidelines for making better decisions in practices large and small. I've developed them over the last 23 years with the help of thoughtful clients:

1. Make sure that decisions are being made at the right level by the right people. Don't waste time by letting what should be a clerk's or a doctor's individual decision get bogged down in a committee. Beyond broad policy, there's little need to involve doctors with the minutia of office management, like how the phones are answered. Similarly, save clinical decision-making sessions for the doctors and allied health professionals in the practice. The competent group practice administrator should have the last call on who needs to attend what meetings.

2. Make decisions in the correct forum. Do you really have to meet to decide on which three lens designs are going to be stocked in the ASC, or can you simply have the surgeons check off a ballot?

3. Make only decisions that are both ethical and legal.

4. Take special care to make decisions that maintain the dignity of those affected.

5. Whenever possible, allow individuals likely to be affected by a decision to engage in the decision-making process.

6. Work toward making decisions that will increase profitability without reducing quality, or increase quality without decreasing profit.

7. Favor decisions that maintain or create new options, rather than limit the practice options.

8. Ensure that the practice decisions enhance relationships with critical stakeholders: patients, payers, staff, hospitals and other institutions, vendors, lenders, and fellow doctors.

9. In the case of two equally acceptable options, it's better to move ahead and make a decision rather than allowing a tie vote to stalemate the practice progress. If you're in a group meeting and stuck in discussion, force a vote, even a non-binding vote to see how people line up, or pass the decision to a committee for a recommendation.

10. Whenever you make a decision that forms the basis for a new clinical or business policy, make sure it's documented in writing, communicated to all relevant staff, and followed up periodically to assure uniform compliance.

Good decisions lead to business success

Some of the least frustrated doctors in America are those with solo practices. They can hold their board meetings while shaving or applying make-up in the bathroom mirror each morning. For such doctors, decisions can be a rapid-fire amalgam of obsession, whim and folly . . . and the practice can recover from almost any error because so few people are involved. Decisions are ultimately more rational in a larger group practice, but much, much slower. For the largest practices, those with annual collections exceeding $20 million, the consequences of business errors are so magnified that it becomes prudent to insure decisions and hedge against error with outside board members.

Whatever the scale of your practice, the decisions you make today about the process of decision-making itself will determine your future success.

John Pinto is president of J. Pinto & Associates, Inc., an ophthalmic practice management consulting firm with offices at 1576 Willow Street, San Diego, CA 92016. John is the country's most-published author on ophthalmology business and career management topics. Recent books include the second edition of John Pinto's Little Green Book of Ophthalmology and Turnaround: 21 Weeks to Practice Survival and Permanent Improvement. You can contact him at 800-886-1235, pintoinc@aol.com, or online at www.pintoinc.com.