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Published 6/1/2009
Steven E. Fisher, MBA

How to conduct an operational assessment

An operational assessment is a detailed review of all or selected aspects of a medical practice (Table 1). Whether your practices uses an outside consultant or conducts its own internal assessment, whether you are planning a comprehensive assessment or a more focused one, you’ll need to collect data, conduct analyses, and prepare reports. The following information should help guide you through the process.

Data collection steps
While approaches may differ in the specifics, the following steps need to be taken in a rigorously conducted operational assessment:

  • Preliminary surveys—Separate surveys should be sent out soliciting information on the areas covered in the assessment and relating to the individuals (physicians and staff) involved in those areas. Personal surveys should contain language that assures respondents that the information will be confidential. Although printed surveys can be conducted, electronic surveys are more efficient. Surveys should be carefully designed to collect meaningful information. The AAOS online Practice Management Center includes examples of subject-specific and person-specific surveys.
  • Preliminary review: All surveys should be returned directly to the persons conducting the analysis at least 2 weeks before onsite monitoring and interviews begin. This gives the consultant(s) time to review the data for completeness and accuracy, to identify potential operational problem areas, and to develop questions on the survey topics, practice information, and personal information provided by physicians and staff.
  • Onsite interviews: In a comprehensive assessment, everyone in the office—physicians and staff—should be interviewed. Allow at least an hour or more per interview, depending on whether the interview focuses on just the personal survey or both personal and “subject-specific” surveys. Information that is provided on a survey must be verified by an objective source. For example, if the “Finances” survey indicates 2008 Gross Charges of $5 million, a report documenting this should be given to the consultant.
  • Observation: A key element of any operational assessment, particularly one that relates to work flow, is direct observation. The consultant needs to observe what actually happens in an office relative to what people say happens in their surveys or during interviews. The consultant must be able to ask questions when the need arises but otherwise “melt into the background” and become invisible. If the consultant’s presence is too obvious, staff will never behave as they generally do during the course of a typical business day.

Required information
Information collected in conjunction with an operational assessment depends on the areas to be covered.
Table 2 provides examples of the information that needs to be collected in specific areas.

Data analysis
The key to any operational assessment is analyzing the collected data. This involves both internal cross-checks and benchmark measures.

For example, if a patient satisfaction survey indicates that patients are unhappy with the way they are treated in the office, it is important to look at information such as physicians’ punctuality (or lack thereof), number of patients scheduled per hour, scheduling methodology, and staff training in patient relations.

Likewise, if physicians routinely fall behind on their patient days, not only the appointment scheduling methodology but also the way the physical facility is laid out and the way the office uses its staff (including allied health professionals) in connection with patient throughput should be examined.

A final example is the single employee who has both billing- and collections-related activities. In this situation, a careful look at internal controls created to deter fraud and embezzlement is critical. Attention should also be focused on the practice’s gross and net collections ratios.

Outside benchmarks for financial and other practice information are available from the American Association of Orthopaedic Executives and the Medical Group Management Association. Table 3 shows data collected by these groups in annual surveys. Although comparing your practice statistics with national benchmarks has some inherent risksknowing how more than 100 other orthopaedic practices function and how their operational statistics change over time is valuable information.

Obviously, whoever conducts the operational assessment must synthesize a large amount of data from a wide variety of sources: surveys, interviews, documentation, and observation. He or she must then identify operational problems and propose solutions that do not exacerbate or create other problems. Undertaking these tasks requires someone with accounting, analytical, and—most of all—people skills.

Ideally, two reports—one verbal, one written—should result from any practice operational assessment.

The verbal report should be given by the person performing the assessment to all practice principals. Depending on the size of the practice, scope of the project, and the number of problems identified, the verbal report could require 3 to 6 hours, including discussion.

The written report should be extremely detailed, enumerating problems and recommended solutions by area such as “Professional Relations” or “Finances.” At the end of the report the preparer should attach a summary of the recommendations in order of recommended implementation. Each recommendation should include space for an anticipated completion date and the name of the person responsible.

It’s a physical for your practice
Just as you have an annual physical to identify health problems early, your orthopaedic practice should have a periodic operational assessment to ensure it is operating as efficiently and effectively as possible. Although assessments are not inexpensive, they typically generate a positive return on the practice’s investment. For more information on conducting an operational assessment, visit the
AAOS online practice management center or refer to “The ins and outs of a practice operational assessment.”

If you are interested in having an outside organization undertake an operational assessment, be sure to consult the AAOS online Practice Management ReSOURCE Directory (PMRD) (member log-in required). The PMRD provides information about companies that supply orthopaedic surgeons with products and services tailored to their needs. Or contact Jackie Ryan, practice management program coordinator, by phone at (847) 384-4334 or by e-mail.

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