When reimbursements from insurers do not keep pace with the cost of doing business, the pit may look quite deep. You and many other doctors will be looking at ways to tighten your belts in 2001, and, according to one practice management executive, doctors should be careful not to make the wrong business decisions while trying to implement cost-cutting measures. In a healthcare setting, cutting staff, leaving positions vacant, or underpaying staff by not giving raises have been popular, but significantly flawed strategies.
Every practice has a critical mass of staff that is required to make it successful.
When the practice's staff falls below that threshold, problems will arise. When you operate in markets with low unemployment, the turnover that results from underpaying qualified employees costs more than a 3 or 4 percent raise. Ryan suggests that practices carefully evaluate staffing needs and pay scales. There are well-established benchmarks that can be utilized. The proper strategy is to have the right number of staff and have that staff performing efficiently.