AAOS Now

Published 7/1/2008
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Steven E. Fisher, MBA

Tips for establishing an alliance with your practice manager

A 10-item “to do” list that will pay off for your practice

Forging a strong, enduring alliance with your practice executive is neither complex nor difficult, but it is critical. If your current manager chooses to leave, finding a new manager will be both expensive and time-consuming. In addition, while you’re looking for a new person and for several months after hiring someone, your practice will be treading water.

The following 10 tips for establishing an alliance can help ensure that your practice team is both cohesive and effective. Next month, we’ll look at 10 things NOT to do.

DO planning and education

  • DO include your practice executive when you develop and update short- and long-range strategic plans. Include him or her on any practice retreats, as a full participant rather than “just” a note taker. Also ensure that your executive is in the loop when your office develops annual operating and capital budgets that are based on your strategic plans.
  • DO encourage your practice manager to engage in continuing education. Two options are the American Association of Orthopaedic Executives (www.aaoe.net), an organization of orthopaedic practice managers, and the Medical Group Management Association (www.mgma.com), which is not orthopaedic-specific but does have an orthopaedic practice assembly. Be sure to bring your practice executive to the AAOS Annual Meeting every 2 to 3 years.

DO support and involve

  • DO support your practice manager by serving as a resource. Identify areas that are particularly important to the success of your office, for example: finance, personnel, managed care, information systems, and marketing. Assign a member of your group to each area so that the manager can consult with the appropriate doctor to consider the pros and cons of moving in one direction or another. Remember, two heads are better than one. Additionally, an idea that is developed by the manager and vetted by a partner will have an easier time getting sign-off by the practice as a whole.
  • DO instill in your partners the need for them to support your executive when he or she executes a directive that has been approved by the practice’s governing board. If half of the partners wants the practice manager to perform one set of tasks and the other half is lobbying for another set of tasks, your manager will be caught “between a rock and a hard place” and may move on to other opportunities.
  • DO make it very clear to any new doctor that the practice executive is the agent of the practice, working under the direction of the practice owner(s). Newly employed physicians may think that because they are employees (rather than partners) and the practice executive is also an employee, they share goals and attitudes. They may even assume the executive will support their interests at the expense of those of the practice. When the executive does something the new doctor does not like, the doctor may feel betrayed, resulting in a damaged relationship that could compromise the executive’s effectiveness.

DO hire and assess carefully
The larger the group is, the more appropriate a formal employment agreement is. An employment agreement protects the practice by clearly stating the circumstances under which employment is granted and enumerating salary and benefit information. It also ensures that the practice executive cannot be terminated capriciously and without warning.

  • DO develop a position description in conjunction with your practice executive. The description should contain a detailed delineation of the person’s responsibilities as well as any requirements you have established in terms of education and experience. Update it annually to reflect any additions or alterations to responsibilities.
  • DO set forth clear performance expectations of your manager on an annual basis. Establish “SMART”—Specific, Measurable, Achievement-oriented, Realistic, and “Time-and-resource-constrained”—goals. Conduct an annual evaluation, using a formal, structured evaluation form that includes performance criteria (eg, “supervisory skills”), evaluator comments on the criteria, and the executive’s feedback. Include documentation on achieving goals.

DO reward and listen

  • DO consider offering incentive compensation to your practice executive, but be cautious about linking the incentive pay to the financial performance of the practice as a whole. Instead, reward your executive based on the annual goals that are established. According to the MGMA, nearly 65 percent of practice executives receive incentive compensation in addition to their regular salaries.
  • DO listen to your practice executive as if he or she were an outside consultant. On-site personnel often possess information and insight that no outsider can ever gain during a few short office visits, no matter how intensive those visits may be. It’s key, however, to provide your executive with the time and resources to function as an outside consultant from time to time—something that can’t be done if the entire day is spent putting out fires.

For more information
Visit the AAOS online practice management center (
www.aaos.org/pracman) for samples of strategic plans and operating budgets, sample employment agreements, and other tips.

Steven E. Fisher, MBA, manager of the AAOS practice management group, is a former practice management consultant and practice manager. He can be reached at (847) 384-4331 or sfisher@aaos.org