Most medical practice owners have been trained in the concepts of clinical governance, in hospital and university. These are the important rules, systems and processes that guide the daily activities of doctors, nurses and healthcare staff in their roles. However, when it comes to creating and applying governance frameworks within private practices, many practice owners fall short of even the most basic requirements.
In the absence of documented rules and processes by which a medical practice is controlled and operated, practice owners and directors are exposed to significant personal and professional risk – that includes criminal prosecution.
The hardest part of creating the systems to provide corporate governance within medical practices is knowing where to start. Here we will explore six simple steps to get the basic governance structure in place in a medical practice.
1. Create a system of documentation
If it is not written down it does not exist. The first step in setting-up good governance in a medical practice is to agree on a process of documentation of the processes.
All medical practices, even single doctor, part time practices with 0.4FTE of a medical secretary, must have written rules that define the way the practice operates. Often referred to as “Practice Policies and Procedures”, these documents must be accessible, up-to-date, relevant and most importantly followed.
The conversation about governance starts with a decision about where to document and record the rules, relationships, systems and processes of the practice. The easiest way to hold such important documents is within a purpose-built cloud software package like Avant Practice Solution’s PracticeHub. Other options for holding governance information include files of documents and printed sheets, but they are less likely to be updated, read or used by practice staff. When imagining what will be written in these documents, it is best to consider the guidance of experts in corporate governance. The ASX Corporate Governance Council suggests that governance in medical practices should include an agreed “framework of rules, relationships, systems and processes within and by which authority is exercised and controlled’. These documents should encompass “the mechanisms by which (medical practices), and those in control, are held to account.”
Properly crafted, these documents should be usable on a day-to-day basis as well as part of the on-boarding and training material for employees and contractors and also as a reference guide in crisis and decision making. The Policies and Procedures documents will include simple rules (for example dress code, social media code), ethical guidance (for example a code of behaviour), procedural guidance (such as how to handle sharps, dealing with spills), clinical pathways (like triage protocols, patient booking schedules), administration protocols (for example how to complete end of day banking and debtor reports) as well as decision-making processes and organisational charts.
2. Cover off risk and crisis management
The next step requires some research, brainstorming and war-gaming. It is important to set aside time with the Practice Manager to think of all of the risks and crises that the practice might face.
Here is a list of types of risks that should be considered:
- Operational Risks
- Strategic Risks
- Financial Risks
- Compliance Risks
- Reputational Risks
- Fraud Risks
- Information Technology Risks
- Safety Risks
- People and Culture Risks
- Innovation Risks
For every risk identified, there should be a person and process responsible for monitoring the risk, predicting the likelihood and responding to a change in that risk. Each identified risk should have a detailed plan on how to deal with the outcome. The crisis management plan should include roles and responsibilities of individuals and the organisation.
One typical example of a crisis management plan would be “Reputational Risk” due to patient complaint.
A plan for dealing with this could include:
1. How the complaint is received and acknowledged on the phone, email or social media;
2. How the complaint is initially recorded internally;
3. Who is made aware of the complaint and in what timeframe;
4. What actions are taken and by whom to respond to the complaint;
5. What feedback processes are activated to communicate the complaint internally;
6. What review processes are activated in order to identify the root-cause of the complaint; and
7. What impact the complaint has on other risks.
Crisis management plans for an internet outage, a malfunctioning vaccine refrigerator or staff fraud, for example, would have similar steps. Clear and precises processes for responding to a crisis should be mapped out ahead of time.
Constructing a simple risk matrix will help to identify what potential crisis to address first. It will also serve as a very useful tool for remaining vigilant and aware of the risks within the business. The risk matrix compares the likelihood and the consequence of all risks and ranks them. The ranks will help practice owners and practice managers work out where to start in building their crisis management plans.
Risk Rating Matrix
A risk rating for an individual risk is calculated by determining the likelihood of the risk eventuating and the consequence if the risk eventuated. The risk rating is calculated by multiplying the likelihood by the consequence.
The risk rating can be expressed as a number or as a level. Risk rating levels are often colorcolour coded. For example, a risk may be possible and have a moderate consequence. In this case the risk rating would be; 3 (possible likelihood) x 3 (moderate consequence) = 9 (or medium) risk rating.
Risk Likelihood level
3. Peg out the future with a strategic plan
If documenting the rules, processes, systems and relationships is the “HOW” to steer the ship (i.e. the medical practice), then the strategic plan is the “WHERE” to steer the ship. It is a commitment to map out the future and the activities that will be performed to get there.
The process can be started by practice owner first setting out what the mission of the practice is, or put in another way “what is the purpose of the practice?” This may include some goals, targets or outcomes that have a timeline for delivery.
With this clear statement about what the destination is, a strategic plan sets out the steps anticipated to get there.
Starting from the current state it should be possible to start filling in the space and time between now and the future state of the practice to formulate a plan. This plan becomes strategic, when it is considered in the context of the business, the opportunities, the effort and investment needed to be successful.
For example: a practice owner may have the goal of creating a practice that delivers a 5% of billings profit to her. The current state may be that the practice only just breaks-even. The strategic plan may include steps to minimise costs (e.g. engage specialist bookkeeper, optimise IT utilisation to reduce staff: doctor ratio, invest in financial handling improvements to reduce debtors), steps to increase revenue (e.g. index fees higher than CPI, work with practitioners to reduce consultation time, increase patient throughput, develop services that appeal to broader section of the community) and a pathway for expanding the practice (e.g. open a third site, increase the number of trainees, increase the number of practitioners).
In this scenario the act of creating a strategic plan will assist this practice appropriately planning resources, investment and energy. It will give the owner, manager and staff guidance about decision making so that all effort is put into achieving the goals and following the strategic plan. If everyone in the practice is working from the same plan, then the goals are much more achievable.
4. Agree on a decision-making pathway
This fourth action may be the easiest, but it is often overlooked in medical practices. Frequently decision-making processes are assumed or inherited and in reality, they are rarely formally acknowledged or clear.
A decision-making pathway locks in responsibilities (that are fundamental to the actions above), accountability, authority and independence where appropriate. By providing clarity around decision making staff performance can improve and some of the ambiguity around roles can be cleared-up.
A simple table and flow diagram can enhance the roles and responsibilities that are covered in action 1 above. For example, a practice with 3 owner-principals might determine that decisions that have an impact of over $3000 will only be made in the context of a board meeting, and when set as a formal agenda item. Another proactive commitment might be to provide authorisation for a Practice Manager to spend up to $2000 without pre-approval.
It is not feasible (or optimal) to have only one person within a practice make all final decisions – this has the potential to encourage by-passes and poor transparency. Practice owners should carefully look for opportunities to delegate responsibilities, and support that delegation by training, documentation and management oversite.
5. Define your ethical culture
The culture of a practice and the moral principles that govern the behaviour of people within the practice are inevitably set by the practice owners. It is preferable that these settings are explicit. It is not sufficient to rely on implicit role-modelling because changes in personnel and circumstances can lead to uncertainty of this crucial area of governance.
If the ethical culture is not set (or if it needs to be reset through remedial work) practice owners should spearhead the process. This can be done by practice owners and senior medical staff being asked to document what moral and ethical principles are important to them. The practice manager can create a document to help stimulate some ideas.
A set of ethical guidelines can be drawn up from these responses and presented as a reference tool within the Practice Policies and Procedures. A list of practical examples can help all members of staff fully understand the message and contribute to the ethical culture of the practice.
6. Ensure that stakeholders are engaged
Effective governance requires that the whole organisation is involved and active in the governance process. This is NOT only a responsibility of practice owners. Ensuring that stakeholders are engaged does, however, need to be driven from the top. There are number of simple ways to ensure that this happens and that staff become important cogs in the engine of good practice management.
As detailed above, the office manager or practice manager is an essential part in setting up the governance structure. Bringing the rest of the team on board will require staff training, dedicated study time and feedback sessions.
Practice owners should be encouraged to set aside time to achieve this with their senior management and invest in staff training and feedback activities for the whole team.
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This article is not comprehensive and does not constitute legal or medical advice. You should seek legal or other professional advice before relying on its content, and practise proper clinical decision making with regard to the individual circumstances. Persons implementing any recommendations contained in this article must exercise their own independent skill or judgement or seek appropriate professional advice relevant to their own particular practice. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Avant is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published. © Avant Mutual Group Limited 2023.
