American Association for Physician Leadership

Strategy and Innovation

Perform an Operational Assessment to Determine If Your Current Space Can Support Your Practice Now and in the Future

Larry Brooks, AIA | Tim Griffin, AIA

June 8, 2018


In this era of reimbursement not keeping pace with overhead and direction of how we pay for healthcare, it is more important than ever to assess the use of the doctors’ and mid-level providers’ time in your practice. There could be a very large untapped revenue source in the misallocated time of these providers that could help your practice increase patient volume and therefore practice revenue. Accessing this untapped revenue source may require additional resources in space and staff. To determine the level of untapped revenue, the investment that will be required to access that revenue, and whether the revenue produced more than pays for the investment to obtain it, an objective assessment of your current practice flow is required.

This article is the first part of a three-part series.

The following article is the first in a three-part series that will help medical practices go through the proper process to determine if a new facility is needed and, if so, to create a new practice environment. The series will generally follow the following outline:

  • Practice Assessment

    • Do an assessment of your current practice to make sure you do not have logjams built-in to your current practice flow. Logjams can be identified that could change the direction of your overall practice needs. These logjams could be in the form of too few staff to handle the volume of patients the provider can see, mis-allocated staff or equipment, IT (electronic health records [EHRs], communications, appointment template, etc.) slowing the flow, etc.

    • Verify any proposed growth to the practice providers.

    • Identify the need for new services.

  • Space Needs Assessment

    • Quantify the amount of space needed to support the new practice environment operating at peak efficiency and patient volume, with new services and providers to be added.

    • Make sure to know parking needs of practice. If your patients cannot park, they will not show up.

    • Evaluate your current facility versus a new practice environment.

  • Design the New Practice Environment

    • Design it right the first time based on the practice and space needs assessment.

    • A good design costs the same as a bad design to construct, but pays dividends for the life of the facility.

This article will address how to identify the necessity to renovate current space or build a new office. Subsequent articles will cover how to determine space needs; find the best location; and design your new practice environment.

Is It Time?

Even in today’s digital age, medical practices must have a physical presence. There must be an environment that brings the patient and the doctor together. The impact of the practice environment on patient-doctor interaction can be enriching or hindering. If the current practice environment is a hindrance to your practice, then it may be time to investigate renovating or relocating to a new practice environment to improve the overall practice.

How do you know if your current space is helping or interfering with your ability to see patients? The most recognizable reason is lack of space. Successful practices will increase their need for space over time. What was once a suitable-size office becomes cramped and ultimately will be a negative influence on the practice’s ability to function properly. Signs that your space is too small are if closets are being turned into offices, equipment is in the halls, staff has no place to sit, and it’s standing room only in your waiting room. Maybe there is plenty of space, but a poor initial design is causing unnecessary walking for staff and doctors. Perhaps there are new technologies and/or services that you would like to add to your practice.

Whether you fit into one or more of these scenarios, you need to follow a logical path that will lead you to the right decision whether to stay as you are, renovate your current facility, or create a new practice environment.

There are several initial questions you should ask yourself to get the process started:

  • How far are you booked out?

  • Where is your income coming from and how does it compare with that of your peers?

  • Are you happy with your current access to clinic time?

  • Do you expect demographic changes for your patients?

  • Have you surveyed your patients to verify if they want any new services or changes in your operating hours?

The answers to these questions will help you decide whether or not you should investigate changing your facility. For instance, if you determine doctors in your practice are booked out more than four weeks in advance, this may be an indication that you either need better practice flow to increase patient volume or you could add doctors to your practice. Once a doctor is booked out more than four weeks, the opportunity for patients to go elsewhere increases dramatically.

Adding providers to your practice typically means a requirement for more space, unless you had planned for this growth when the original facility was designed. The harder thing is to determine if the current flow and operational characteristics of your practice are as efficient and productive as they could be. This takes an objective assessment, and the following describes the process your practice should follow.

Practice Flow Assessment Process

Imagine your family is about to start a road trip to a location that is new to you. Do you pack up the kids and hop into the car and take off, or do you use a map or GPS to guide you along the proper path? Just as it is prudent to understand where your destination is and how you will get to it before you embark on your trip, it makes just as much sense to understand and follow the proper process and where you are trying to get when establishing a new practice environment.

The path you take should be objective and free from the conformity of “we have always done it this way.” Now is the time to delve into what can be better for the practice. As you go through the assessment process, use the following three questions as the basis of your evaluation:

  1. Does how a task is being performed best utilize the education, skill, and experience of the person doing it?

  2. Or could the person’s time be better used in other ways?

  3. Does this help the providers to spend more time practicing medicine or take them away/keep them from practicing medicine?

A good example is doctors entering data into an EHR system. This is a time-consuming task that could be delegated to a scribe, which would allow the doctors to spend more time truly practicing medicine. Critical assessment of each area of your practice needs to be performed in order to determine how well your facility and the practice flow concepts in place (i.e., the movement of patients, staff, doctors, and information within the practice) support the providers caring for patients.

Doctors’ Patient Volume

Start your assessment with the providers because they are the reason the facility, staff, and patients are there. This can be accomplished in two steps. First, tabulate the time each provider starts and stops a clinical session. Then record the number of patients that each provider saw during the session. These data can then be used to calculate the baseline rate at which the providers see patients. The more sessions recorded (and types of visits seen), the better the data, but you should record a minimum of two weeks of sessions.

Figure 1 shows that the provider averages 15.4 patients for each half-day session (averaging four hours per session) for an average of 3.9 patients each hour. This spreadsheet tells you only the current production, not whether or not the doctor’s time is being used wisely or not. To find that out, a time study is required.

Figure 1. Spreadsheet showing a doctor’s current patient volume.

Each provider in the practice is observed, and every action he or she performs during the clinical session is recorded with the start and stop time down to the second. Once these data are gathered, the action and the time associated are categorized into one of three categories: practice time, staff time, or lost time.

Practice time is time spent by the providers performing tasks that only they can do and that, by default, benefit the practice the most.

Staff time is time spent by the providers doing tasks that staff members could perform, which devalues the providers’ abilities and puts an economic drain on the practice by using the highest level overhead to perform tasks that lower level staff can perform.

Lost time is time when doctors are waiting for the next action, which is time with no benefit to the practice. Lost time is the most costly category and generally is a telltale sign of poor practice flow.

Figure 2 an example of a time study performed on Dr. Birdie. As this study indicates Dr. Birdie is performing tasks that could be delegated to staff, such as looking for a staff member, and is losing time to such things as having no patient ready to see.

Figure 2. Time study sample.

Once this type of time study is performed for each provider in the practice, the data are tabulated and combined into a summary as shown in Figure 3.

Figure 3. Time study summary data for a practice.

This information indicates that the doctors’ time utilization efficiency in this practice ranges from 42% to 92%, with the overall practice efficiency at 69.98%. Therefore, the current practice flow is not optimal and indicates that changes are needed. To determine what changes and the total magnitude of changes needed, the other areas along the patient’s path through the office need to be assessed and timed.

While performing the observations, take careful notes of what is causing delays and flow problems. Correcting these practice flow issues will lead to the doctors’ time being used more efficiently and to an increase in the number of patients the practice can see. The totality of flow issues that need to be corrected, the extent to which the doctors’ time needs to be used more efficiently, and the benefit of making these changes will all play into the final decision on addressing your facility issues.

The outcome of making changes should be more patients accessing care. This, in turn, will provide the practice with an increase in revenue. But correcting issues, making changes, and increasing patient volume generally require one or more of the following:

  • Increase in staff;

  • Space adjustments;

  • Scheduling manipulation; and

  • Addition of technologies to help with patient flow.

Most of these items have real costs that must be weighed against the increase in revenue. Therefore, you should only make changes if the change will result in a net gain in revenue or a better ability to care for patients.

To this point, we have shown how to determine the potential increase in patient volume if the doctors’ time is used to its fullest. To determine the potential revenue increase, determine your average number of dollars collected per office visit for each doctor separately and multiply that by the potential increase in patient volume for that doctor from the time study performed on each doctor.

To determine the cost of the changes, a decision will need to be made whether the practice will renovate or establish a new practice environment. That decision will be based first on whether or not the current facility if renovated can house the practice successfully; and if so, what the project cost would be versus that of establishing a new practice environment.

The next article in this series will address how to determine the space needs of the practice, how to evaluate your current facility’s ability to house those needs compared with a new practice environment, and the economics of making the decision to stay as you are, renovate your current facility, or establish a new practice environment.

This article is available to Subscribers of JMPM.

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