Auditing Your Practice: Nonfinancial Variables to Survive or Thrive

The strategy of the nonfinancial audit is discussed, with specific information for the facial plastic and aesthetic surgeon. The author provides specific questions and a roadmap for the practitioner to follow to complete a nonfinancial audit to expose the strengths and weaknesses of their practice. This article discusses quality, productivity, service, patient management, marketing, third-party contractors, and other essential aspects of the practice audit.

Today’s economy has many practices looking at the bottom line and asking, “Am I surviving?” I regularly hear plastic surgeons say, “It is never going to return to the way it was.” The reality is that it should not. The past few years created unrealistic growth, excessive mismanagement that resulted from easy money, and taught us all (aesthetic surgeons and nearly every other business in a first-world society) to focus on money as the only measure of health, growth, or satisfaction in the aesthetic surgery practice.

You may be inclined to call your accountant to audit your books in hopes of finding missing money. Instead, or at the same time, consider the value of taking the time to audit the nonfinancial values in your practice and find where there are weaknesses that threaten your survival or opportunities to thrive.

A nonfinancial audit is something you should undertake to measure the state of your practice, collect valuable data, and to improve. Unlike a financial audit, this is not tedious. It is not punishment. It is not an exercise to find blame for shortfalls. Unlike a financial audit, you do not have to freeze the cash flow or operations for a period of time and complete the exercise at once. Take it in phases. Review and update those phases at the same time each quarter (or at the very least each year), and along the way collect data to trend, learn, and grow.

Conduct an audit simply for quality improvement. Do not just consider an audit when growth or downsizing is on your agenda. At any time in your practice cycle look for cost efficiencies, and consider the impact of competition, future planning, and new opportunities. The key terms to implement in your audit are value, objectivity, sincerity, and teamwork.

Quality improvement

The easiest way to start on a quality-improvement path is with an internal audit of nonfinancial variables. Whether in today’s market or the best of economic times, lean, efficient, and effective operations that deliver your services and a quality experience will result in a practice that meets or exceeds your and your patients’ expectations.

Put aside the theories, books, and courses offered on total quality improvement and instead put forward some basic concepts and questions:

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What is your product (service)?
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How are outcomes achieved?
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Are your customers (patients) happy with your product (service)?
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Are your customers (patients) happy with your practice and the way that it delivers that product (service)?

Consider these questions collectively across your practice and in each of the core areas of facial plastic surgery: cosmetic medicine and product and service extensions, such as skincare and retail. Do you delivery perfectly every time? From perfection, there is nowhere to aspire, grow, or reach. Perfection is an absolute in a dynamic world; therefore, there is a need to question how your practice delivers every day because what may be perfect today may fall short tomorrow. With uncomplicated concepts, strategies, and teams that carry out a continuous agenda, quality improvement and auditing your nonfinancial variables is an easy and ongoing process that will put your practice on a continuum of success.

Human resources

Auditing the people who work for you is not as easy as performance reviews. As the business owner or leader you should ask the following questions:

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Annually, have you had a complete health review?
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Is your continuing medical education, licensure, and certification up to date? Do you panic at the last moment and take what you can to fill requirements?
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Do you have all the necessary insurance: risk, key man life, liability, accidental death, and disability? If you do not and something happens, will it put you out of business?
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Legally is your business/partnership plan up to date?

Strategically, what are your goals (personally and professionally)? Not only must goals be defined but you must also measure achievement and critically review your leadership and administrative responsibilities. How productive are you, or is your time heavily taxed with a burden someone else might bear? When defining goals or reviewing productivity, do not save your free time for retirement. Define a balance between work and home. You deserve a quality of life.

In terms of your entire team (all those who work for you, including you), there are basics to review and keep up to date in nonfinancial auditing:

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Emergency contact: If a staff member has an accident or critical illness on the job, who will you contact? Who do you have permission to contact?
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Drug screening: Those who do not have a substance abuse problem do not have an issue with drug screening. Regularly testing the group can uncover a situation that, if left to chance, could result in a liability to your practice.
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HIPAA (Health Insurance Portability and Accountability Act) compliance agreements are a basic. Does every member of your staff understand that privacy is more than a policy? A failure here could ruin your practice image.

Look at your administrative and service providers in terms of productivity, performance, and dedication. Set goals, measure, and set new goals. Review how the team performs and interacts together. Seek productivity and efficiency without a duplication of effort. Accept that the speed of the team is not the only important measure; consider its stress factor as well. For example, is a productive individual also one whose constant complaints stress others? Do not think it will go away. Look at it critically; if it comes up in an audit it is not criticism, it is room for improvement.

When it comes to contractors (from the provider/contractors to the cleaning crew, web master, and your florist) review the following regularly:

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Are contracts, nondisclosure, HIPAA associate agreements, and other policy documents signed and up to date? If these individuals are in your office or in proximity of patient data, it is essential that the documents are current.
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Are service expectations being met or are there concerns, obstacles, or shortfalls? If you cannot reach your computer consultant for hours after the system crashes, it is best to reconsider the retainer you are paying.
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Do you have a lawyer on retainer, an accountant who only does your taxes and offers no critical financial advice, and an insurance agent who simply likes to raise the premiums and hope you will renew?

You may not have regular contact with all these contractors, but your staff does. Without an audit or regular review of terms, how will you know, or when will your staff take the initiative to make critical changes?

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