Labor costs are generally the largest expense a practice
carries. Expenses associated with actual salaries, such as
benefits, state and federal taxes, and unemployment insurance, add
to this burden.
Yet labor costs are often undermanaged in many medical
practices, especially in small practices, where a family-like
culture may make the imposition of structure feel unnatural. Even
in larger practices where attention is paid to the "bucket" of
labor expenses, there may be insufficient analysis of supporting,
incremental, or allocated costs.
Regardless of the size of your practice, some degree of
labor-cost management will help you control this potentially
overwhelming expense. The following incremental steps will help -
and your staff's response to them will allow you to determine how
much cost control you want to impose on the practice's culture.
Create job descriptions. Make sure staff are operating within
the purview of their positions and their qualifications. When
analyzing labor costs, allocate expenses to administrative staff or
clinical staff for a more accurate picture of operations. vWatch
overtime closely. Too much overtime is expensive, and productivity
will likely drop. Reassess staffing levels at least annually.
Implement a time-management structure. Often in medical
practices, employees show up and leave at will. The assumption is
that if the practice is open and the employees are working, they
must be working a 40-hour week. Consider using a simple
spreadsheet-based timesheet for each employee to accurately record
time and track expenses. Download
the MMS time calculator tool.
Track time off, as well. Again, a simple spreadsheet can help
you monitor these expenses more accurately. Download the leave calcuator tool.
.
You should also examine your benefits package annually. Few
practices can afford to provide a full palette of benefits, and
some are being forced to make difficult choices in this area that
require employees to bear more of the costs.
But before you make any changes, examine the culture of your
practice. Determine how stringent you're willing to be and how much
"reining in" your staff will tolerate. Thoughtful decision making
about these expenses may help you avoid conflicts later by creating
a clear understanding at the outset.
- Adam Shlager
