The “Business” of Practicing Medicine: The Top 5 Mistakes Doctors Make

Doctors who run their own practices have to be superhuman in a sense. Not only are they expected to practice their medical specialty to a high standard of care, they are required to keep abreast of electronic reporting compliance, employment laws, OSHA, payroll, HIPAA requirements, marketing, collections, and so much more. It is no wonder then that mistakes (unrelated to medical malpractice) are made, costing doctors time, money, and stress. Below are the five biggest mistakes that medical practitioners make in the employment law field, from my perspective as an employment attorney, who would not have the first clue how to suture a patient’s stitches.

  1. Problematic Hiring Practices That Lead To Turnover

It is well known that there is greater employee turnover in a medical office than in other industries. There are many possible explanations for this, one being that unlike other industries, in the medical office, there is little or no room in which an employee can grow. An administrative assistant who is in charge of scheduling the doctors and billing, for example, could never move into a higher up position of being a nurse or a doctor without obtaining a new degree. This is why it is so important that a doctor running his or her own practice implement good hiring practices. Spending the time to find good candidates and then properly screening and interviewing them can prove to be effective in preventing such high turnover. Doctors should take time crafting the requirements of the job before posting the position, weeding out those applicants who are not trained or experienced in a particular area and therefore likely to quit or be fired for a responsibility they were never trained to do. Furthermore, there are a host of legal requirements as to what information an employer may gather about a potential applicant, and which questions invade that person’s privacy rights. It is good practice for doctors to run a background screening on viable candidates, but be aware that the candidate’s permission must be obtained and the screening must comply with state and federal laws.

  1. Wage and Hour Violations and Misclassification

Wage and hour laws change constantly, and the practice of properly accounting for all time worked is easier said than done. Doctors, in particular, have irregular hours and situations in which their staff assist them beyond a typical set schedule. Nurses make calls from home; assistants stay late to deal with medical emergencies; so how is that time captured? The issue comes up frequently in medical offices, where employers are not properly applying overtime laws to their staff. Very simply, the law in California states that a nonexempt employee working more than 8 hours receives time and a half; if an employee works more than 12 hours, they receive double time. Federal law provides that if an employee earns less than $47,476 in a twelve month period, they cannot be exempt from overtime, regardless of their job duties and responsibilities. There are also laws that provide factual distinctions between exempt and nonexempt positions, depending on factors such as independent judgment, supervision, control of hiring/firing,etc . If an employer fails to properly classify their employees or pay earned overtime, the employer can be subject to significant penalties and fines, including up to three years of back wages, treble damages, attorneys fees, waiting time penalties and more. It is a good idea to have an expert review the classifications of employment and payment policies to make sure the practice is being run lawfully.

  1. Physicians Micromanage and Are Not Great Delegators

The way in which doctors are trained when they are residents in a hospital offers interesting insight into why doctors become difficult bosses. As residents, there is an unquestionable hierarchy amongst the attending physician and the residents. Even an outside observer can tell from watching the interactions between the attending and the residents who is the “boss” and who are the “underlings.” This constitutes the training that doctors are receiving that is then transferred to their work as “CEO” of their medical practice. When a CEO dictates rules and orders to their employees, it makes the staff feel like they are not a part of the team. This scenario is compounded by the fact that doctors are typically not the greatest delegators. When a subordinate feels micromanaged, they are likely to feel incompetent and unfulfilled in their jobs. Managing staff properly may not come naturally to a doctor, and this can create serious problems when trying to manage an office with many different tasks and responsibilities. Delegating the administrative tasks (i.e., billing, scheduling appointments, documenting visits, ensuring that the medical supplies are properly stocked, etc.) to the employees trained to do these tasks will empower staff and give them greater job satisfaction. Doctors should be able to acknowledge that there are certain functions involved in running an office that would be better handled by an employee rather than by them. Empowering staff is a wonderful gift to give employees and leads to greater productivity and loyalty .

  1. Lack of Insurance Against Employment Claims

While all doctors carry medical malpractice insurance, EPLI insurance (Employment Practices Liability Insurance), which provides coverage to employers against claims made by employees alleging discrimination, wrongful termination, whistle-blower violations, harassment, or other employment-related issues is not anywhere near as common. Premiums can be expensive, but in hindsight, defending against a lawsuit, whether meritorious or fraudulent, can be financially disastrous to a practice that has no insurance coverage. Doctors often think that an employment lawsuit will never happen to them, until it does, and it is disheartening to hear that they have not protected themselves against this unfortunate reality. In this area, it is worth the investment to be proactive, rather than reactive.

  1. Failing to document an employee’s performance

California is an at-will state, meaning that most employees (unless under a specified term contract) can be hired and fired for any reason at any time. However, there are certain measures that an employer should take before they make a decision to end an employment relationship. More often than not, when an employer abruptly terminates an employee without having given a reason, or provided notice of an area where performance is lacking, an employee will run to a lawyer and claim that the termination must have been for some discriminatory purpose. How many people will admit that they were terminated for having terrible customer service skills, poor attendance, or an attitude problem if they are not given a warning by their employer that they are not meeting expectations? The answer is none. Doctors are often so busy that they fail to give feedback to employees. It is no surprise that providing regular performance reviews would fall through the cracks, but the feedback does not need to be formal, an email is sufficient. Providing job performance information is not something that should be ignored. It is an important tool that can be used to allow employees to become more successful in their jobs. Further, providing negative feedback is critical to ensuring that if the employee needs to be terminated, there is a paper trail showing that their performance had problems and they were put on notice of the employer’s expectations.

Doctors, focused on the health and well-being of their patients do not like to think of their practice as a business, but the requirements of running it in compliance with state and federal law are no different than if it was a bakery or gas station. Doctors would be well advised to get support in the areas that they are not experts in, such as employment laws and regulations, and to provide yearly training to their office managers, so as to reduce their risk. After all, a doctor would not expect their lawyer or CPA to know how to perform an echo-cardiogram, and thank goodness for that.

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