Practice consultants may fit the bill, but assess specialties before contracting

October 1, 2007

Consultants can help improve performance and solve problems for a dermatology practice, but before bringing one on board, doctors should have a clear set of goals or well-defined problems that need to be addressed. Consultants who specialize in a particular area of practice management can offer more productive assistance than a generalist with less focused experience.

But such a move may prove to be a costly mistake unless physicians have a clear picture of their needs and goals, and an equally strong idea of what they expect from a consultant.

"The number one reason to use a consultant is for an answer," says Elizabeth Woodcock, a practice consultant and owner of Woodcock & Associates in Atlanta.

Whys, wherefores

The next leading reason for bringing aboard a consultant would be if the physician already has the answer, but doesn't know how to implement it, she adds.

And without the well-defined question or a specific set of executable goals, dermatologists may find themselves with an unproductive consultant relationship.

"This happens a lot," Ms. Woodcock says. "You can really get yourself into trouble in terms of cost and frustration if you have failed to define the expectations."

Once the goals are set, a physician's next challenge is finding the right consultant, and that, too, should involve homing in on the issues that need to be addressed and finding an expert in that specific area.

Consultants typically can offer specialized skills in various functions, including marketing, ancillary development, revenue cycle management, coding or other areas, to help a practice grow.

Finding the right fit

As practices increasingly make the transition to electronic medical records, demand is also high for technology consultation, but for medium to larger practices, the costs involved in implementation and operation typically make it more worthwhile to hire someone in-house, Ms. Woodcock notes.

"It usually comes down to a financial decision. If you're spending $50,000 for 20 hours a week with a technology consultant, you could probably hire one for that much and have them spend more time in the office."

A consultant who offers knowledge on a little bit of everything may lack the expertise needed to turn your specific problems around.

A number of resources are available for finding consultants, including the American Association of Healthcare Consultants ( http://www.aahc.net/) and the National Society of Certified Healthcare Business Consultants ( http://www.healthcon.org/).

Members of both organizations are required to follow a code of ethics, which is no small detail when it comes to dispensing advice for which the doctors, themselves, will ultimately be responsible.

The American Academy of Dermatology (AAD) warns of health practice consultants who may - either deliberately or unknowingly - cross ethical lines in giving revenueboosting advice that goes against guidance provided by the Department of Health and Human Services Office of the Inspector General.

The AAD refers to a June 2001 report from the U.S. General Accounting Office describing workshops that government investigators attended in which consultants gave potentially unlawful advice such as not reporting overpayments by insurers or performing unnecessary tests to generate documentation to support billing at a higher complexity code than was warranted for the visit.

Quantifying, qualifying

The costs involved in hiring a good consultant for a dermatology practice can range anywhere from $75 to $400 per hour, with a general average cost of about $200 per hour, Ms. Woodcock says.

Quantifying the return on that investment can be easy or tricky, depending on the specific services that are rendered, she adds.

"Something like billing is very quantifiable - you make improvements and the results are very apparent," she says. "But something like growth or marketing is a little less quantifiable.

"So the big question physicians need to ask themselves is what they expect for a return on investment. If you invest $10,000, what do you expect to see from that?"

Another important question to consider when interviewing consultants - and interviewing at least several candidates is advised - is simply whether the consultant is a good personality fit, Ms. Woodcock adds.