When to Hire a New Provider. Presented by Paul Vanchiere, MBA
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1 When to Hire a New Provider Presented by Paul Vanchiere, MBA Paul@PediatricSupport.com
2 ... We must first accept the fact that a pediatric practice is really a small business and must run on sound, generally accepted business principles to remain viable. What information you need to look at...
3 Patient Demand Share Overhead Costs Offer More Services in Existing Space Call Rotation Why Add Another Provider? Succession Planning Open New Locations
4 What is the Real Question The question is NOT : Can they AFFORD another provider? The question is : Do you they ENOUGH BUSINESS for a new provider? Why another Pediatrician and not Extended Provider? Be prepared to sell yourself
5 What is the Real Question Existing schedules maxed out? Turning patients away? Need better quality of life? Is There Enough Business? Competitors shuttered? Competitors shuttered? Community growing?
6 What is the Real Question Have Space? Future Compétition? Have Staff? Operational Considerations Have Support of Leadership? Have IT Infrastructure?
7 Pediatrician Profile New vs. Experienced Pediatrician* New - $165,271 Experienced - $174,321 Worth $9,050 difference? Habits Lifestyle Expectations Managerial Capabilities / Business Acumen Clinical Management of Underserved Population Specialty needed within practice- Neonatal coverage / Standby Comes down to personality and practice fit *AMGA 2013 Medical Group Compensation and Financial Survey Report based on 2012 Data
8 How Will They Support the New Provider? Shift Existing Patients Let them Develop Niche Stop Taking New Patients Marketing Efforts
9 The Options Physician Assistant Pediatrician What Options Are Out There? Family Practice Nurse Practitioner Pediatric Nurse Practitioner
10 Financial Information What Financial Information Do They Look At? Revenue per Encounter Cost per Encounter Operational Cost Provider Cost NP PA Pediatrician Overhead Rate
11 AMGA Salary Survey Results Pediatrician Patient Visits
12 Revenue per Encounter Encounter Revenue / Office Encounters $725,000 / 4,000 $181.25
13 Cost per Encounter Total Operating Cost / Office Encounters $300,000 / 4,000 $75.00
14 Overhead Rate Total Office Expense / Total Office Revenue $420,000 / $750, %
15 Business Volume Needed Estimate number of patients seen per day Estimate number of days per year worked Estimate salary requirement Estimate Employer costs Sick Visits Well Visits Hospital Rounds Estimate Quality / Production Bonus(es) Estimate benefit requirement (10 20%)
16 Run the Numbers
17 Refining the Analysis Number of Patients per Day Recruitment Costs Per Encounter Profit Adjust to Payor Mix Total Revenue Adjust for number of provide days Full time Part time Benefits / Bonuses wrvu s
18 AMGA Salary Survey Results Pediatrician Starting Salaries em an ts d Dev %ile20th em dian %ile80th %ile90th G *A M $ $ $ $ $ $ wen 9 5 4, ,0 3 0, , , ,1 9 pxe $ $ $ $ $ $ eri enc e d 9 2 5, ,0 3 0, , , ,9 1 2 Vari anc e % % % 91.5 % 05.8 % A 2013eM dic a l Gr o up Com p ens a tion and Financ i alus evr 2013 Repor t bas e d on 2012 Data y
19 Physician Obligations Medical Directorships ER Coverage Are professional services exclusive? Other terms and obligations (coverage, etc.) Assignment of right to bill and future receivables What are the physician obligations? Maintenance of professional qualification Corporation s Rules and regulations Performance of duties
20 Negotiation What is the compensation? Salary Varies Regionally Supply and Demand Future Increases Bonus(es) Sign On Bonus Retention Bonus Productivity Bonus (wrvu s) Quality Bonus Predefined or Subjective Planned or at their Discretion Roll to Retirement? Deferred Compensation? Can you cash the check right away?
21 Terms and Termination Number of Years Previous MedMal Coverage? Criteria for Termination Terms and Termination Without Cause Upon Notice? MedMal Insurability? Loss of License or ProviderStatus?
22 The Nitty Gritty Reasons for Termination DWI / DUI? Felony Social Media Behavior Disruptive Behavior Substance Abuse HIPAA Breach Material Contract Breach Provision to cure the breach?
23 Maternity Leave Paid or Unpaid Accumulate Vacation / Sick Time Length 6 12 weeks Delayed return could mean voided contract FMLA provisions? Treat as owner or as employee?
24 Partnership Timeline to Buy In? What is their long term strategy? Internal or External Financing? Discretionary or Based on preset parameters? Are you legally bound today for an event in the future?
25 Memorialize Negotiation Buy In Terms Valuation Methodology Notified of Changes Minor and Major Shareholder Agreement Buy Out Terms and Conditions Retirement of Existing Shareholder Death of Shareholder Divorce Disability Goodwill Accounts Receivable Equipment and other assets How Long Who handles MedMal? Internally or Externally Financed? Situations
26 When to Hire a New Provider Presented by Paul Vanchiere, MBA Paul@PediatricSupport.com
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