What Are the Different Types of Managers?
Confusion surrounds this question. What is the difference between an office manager, a practice manager and a hospital administrator? The Veterinary Hospital Managers Association guidelines for the general duties of each position are listed below. These basic duties are an excellent tool to develop a program that fits the style and needs of your practice.
Office Manager: Generally, the office manager is responsible for day-to-day operation of the front office, employee scheduling and accounts receivable. The office manager is also responsible for performance evaluations of the receptionists and is the liaison with clients concerning problems or complaints. One of the most important responsibilities of office manager is to ensure the consistent application of client/patient service policies.
Practice Manager: The practice manager has all of the responsibilities of an office manager and has direct authority and decision-making responsibilities over all business aspects of the practice. The practice manager’s realm of responsibility includes accountability for staffing, benefits management, marketing, budgeting, accounting, fee structure and collection, equipment management and facility management.
Hospital Administrator: Hospital administrators are distinct from other management positions in that they have complete and final authority over the operations of the business and the practice in accordance with the practice owners’ directives. Hospital administrators are responsible, either directly or through supervision, for completion of all the duties listed above. In addition, they are responsible for professional (veterinary) staffing and supervision. The administrator should have a working knowledge of quality assurance and professional performance of veterinary medicine. S/he may also help establish the medical protocols of the practice. Once the protocols have been established, it is the administrator’s responsibility to ensure their consistent application. Administrators use their talents and experience to combine the business and medicine of the practice to ensure quality care and profitability.
Certified Veterinary Practice Manager (CVPM): The Veterinary Hospital Managers Association launched their CVPM program in 1991. This process certifies individuals as competent in the six major areas of practice management: human relations, marketing, finance, organization, ethics and law. Individuals that pass the CVPM exam can be hired with the assurance that they possess the technical ability to manage any practice effectively. The CVPM certification indicates that the individual has had at least four years of experience in all aspects of practice management, that s/he will acquire 24 hours of continuing education each year and that s/he is most likely a career manager.
Contract Managers: Contract managers are new to the veterinary field and may be the solution to the long-term problem of need vs. justification of the expense. In general, a practice grossing less than $750,000 a year has few available dollars for dedicated management personnel. This situation has caused most practices to operate without a manager and has put a great deal of strain on the practice owner. In our competitive and heavily regulated profession of today, there is even more pressure to keep up with management skills than in the past. Contract managers can keep your practice up to date and progressive, while keeping management expenses within acceptable limits.
Contract managers can be used for short-term projects, such as implementing a safety (OSHA) program, recruiting a new employee or conducting periodic audits. Their services can also be used for more intensive, long-term projects, such as management of employees, financial analysis, budget implementation and strategic planning. The goal in using a contract manager is to have the benefit of his or her experience while keeping the total management expense in the 3.5%-5.0% range.
Do You Need a Manager?
The financial success of a practice depends on many things, with the ability of the practice’s veterinarians to provide services being the most important. Can you be an effective practitioner when you are concerned about employee reviews, an OSHA inspection or when to schedule interviews for hiring a receptionist? On the other hand, can you be an effective manager when you have worked a ten plus hour day as a veterinarian, or do you cut your practice schedule to provide time for management? Aside from the professional activity, what time is left for family and personal needs? How much professional burnout is caused by veterinarians trying to do it all? If you do not have a manager now or your present manager is not effective, consider your options:
- Hire a manager.
- Share a manager with 1 or 2 other non-competing hospitals.
- Train (or have trained) a promising staff member.
- Have a contract manager hire and train and office or practice manager.
- Use the services of a contract manager.
How Do You Justify the Expense of a Manager?
Common belief holds that spending money on a manager reduces the net profit to the practice owner. That can prove true if the owner does not use some of the time formerly spent managing to generate additional income. However, if having a manager allows the owner five additional professional hours per week at an average of $250 per hour, this alone would increase the annual gross income by over $50,000. Realistically, the additional available hours would be more like ten to fifteen each week when you consider the time available and reduction of stress.
An effective manager will increase the gross income and the net profit of the practice. Even using conservative figures, funds would be available for management personnel, the practice would benefit,and the owner’s quality of life would improve.
All of the above is wishful thinking if the practice hires an unsuitable manager. Actually, it could be a disaster. This and loss of control are two fears that keep practice owners from hiring managers. Most veterinarians do not have the training or the time to thoroughly interview prospective employees. If the owners are to delegate some or all of the control of the practice to a manager, they must be certain to select a qualified applicant and to implement systems for checks and balances.
Who Will Do What?
Before you hire a manager, take some time to decide what you want the individual to accomplish for you, how you will transfer control and how to structure his or her compensation. Lack of clear communication regarding your expectations can spell disaster and frustration for you and your manager. Transferring control and responsibility is probably the most difficult aspect to consider when hiring a manager. The compensation package can be somewhere between 2%-5% of the gross revenues of the practice. An office manager would cost in the 2% range, while a hospital administrator would cost closer to 5%. This 5% should include your entire management expenses including the administrator or manager, office manager, bookkeeper and the owner’s compensation for management duties.
Figure 3 shows a partial example of how to structure the transfer of control. This schedule is based on the expected abilities of a staff member having been promoted to practice manager and the assumption that s/he will be developing the necessary skills. The practice manager can perform all these activities. The practice owner must approve final decisions in advance until the transfer date has been reached and the owner has confidence in the employee. The most important aspect of communication is having a system of how to measure performance and expectations in a way that is clear and fair to all concerned. A system similar to the one below can go a long way toward a successful relationship. Complete a similar list for each management area and each department (e.g.,Client/ Patient Production, Financial, Administration, Facility, Strategic Planning, Accounting, etc).
Figure 3. Schedule to delineate timing of transfer of responsibility for personnel management functions.
Use this area for progress notes, skills needed, updates etc.
|Initial Interviews||1 month|
|Hiring Reception||6 months|
|Hiring Technicians||8 months|
|Hiring Kennel||3 months|
|Training Reception||1 month|
|Training Technicians||1 month|
|Training Kennel||1 month|
|Evaluate Reception||2 months|
|Evaluate Technicians||3 months|
|Discipline Reception||1 month|
|Discipline Technicians||3 months|
|Discharge Reception||6 months|
|Discharge Technicians||6 months|
|Discharge Kennel||3 months|
|Employee Policies||3 months|
|Employee Manual||1 year|
|Benefits Management||1 year|
How to Find a Manager
When recruiting management personnel, you have two choices: You can hire from outside or you can expand the responsibilities and training of a current staff member.
Management personnel can move your practice beyond what you and your associates now accomplish.
It would be worthwhile to contact other practice owners that have managers to learn of their experiences. If you have a practice management consultant, ask him or her for a recommendation. You may also want to consider asking your consultant or contract manager to assist you with the interviewing process.
Grow Your Own
Most practices develop a manager from within their own staff. The best way to achieve success with this person is to invest in his or her training. Training opportunities are available through the Veterinary Hospital Managers Association, AAHA’s Veterinary Management School, Webster University, Veterinary Management Institute and regional or national conferences with veterinary management programs. Your local community college offers inexpensive but valuable courses in accounting, finance and business management. These activities constitute a large investment in the individual.
The Employment Agreement
Always retain your manager with an annual contract of employment, including a non-compete clause to protect your interests. Another possible safeguard is to have the employee take out a line of credit or a five year loan to pay for any advanced training in management and have a written agreement for your reimbursement as long as s/he is employed by you. If s/he leaves your employ or is terminated before the end of the five years, s/he is responsible for the payments. A certain level of mutual trust and respect is necessary for this arrangement to work. An employment agreement can be very beneficial to the individual while protecting the long-term interest of the practice.
It’s Worth It!
Being a CVPM and career manager, I admit to a biased opinion on the need for management personnel. I see veterinarians whose home life and personal happiness are suffering because of the demands and stress of being a practitioner and a manager. These activities are difficult to combine effectively in a growing and developing practice. Consider the potential for growth in your personal and professional life if you could concentrate on the practice of medicine and share the burden of management with a trained manager.