Avoiding Administrative Overload: Four Strategies

by Corporate Relations and Business Strategy Staff

Handling administrative tasks in an efficient and cost-effective manner is an important part of building and maintaining a successful psychology practice. While some psychologists can handle day-to-day practice management activities on their own, others find that the administrative demands of their practice necessitate additional support. This article will help you think about the administrative needs of your practice and how to manage them in cost-effective ways.

Consider the financial implications of how you manage administrative tasks. Even if you are able to manage the administrative responsibilities of your practice yourself, it may not be in your best financial interest. For example, if you spend six hours per week on administrative tasks and typically charge $100 per hour for your clinical services, the cost of doing the administrative tasks yourself is $600 per week. If you delegate those tasks to an office assistant whose wages and benefits average $15 per hour and you use those extra hours to provide clinical services, you can generate an additional $510 per week. Or, you could hire a full-time office assistant (for 40 hours per week at total compensation of $15 per hour) and still break even.

Hiring support staff is just one way to streamline your administrative functioning so you can concentrate on revenue-generating activities. Other approaches include automating and outsourcing your administrative activities.

In deciding whether you need assistance with the administrative demands of your practice, consider the following questions:

• Would you like to increase your caseload, but find that you don’t have time in your weekly schedule?
• Do you receive more referrals than you can handle?
• Do you spend more than a few hours per week on tasks that could be delegated to someone less qualified?
• Are administrative tasks not getting done or consistently getting done late?
• Are you behind on billing and collections?
• Do your payers require a lot of routine, tedious paperwork (e.g., billing and reimbursement forms and documentation)?
• Is your office consistently busy (at all times, on certain days or at particular times of the day)?
• Do certain administrative activities feel like a burden?

The more “yes” responses you give to the questions above, the more likely it is that your practice could benefit from more effective office management.

If you determine that you need to revamp your administrative practices, your options include:

Automation. Continue to perform administrative functions yourself, but increase your efficiency by automating your practice. Options include using practice management software, switching to electronic client records instead of paper files or submitting claims electronically.

• Pros. You retain control of administrative activities. You do not have to hire, manage or pay an employee. Can enhance your organization, efficiency and ability to track clinical and financial data. May reduce office clutter. Electronic claims may be paid faster.
• Cons. Usually requires an initial financial investment in computer software or equipment; therefore, savings from increased efficiency may be realized over the long term rather than right away. May require a steep learning curve, especially if you are not already technology-savvy. May inadvertently create more administrative work for you. May “feel” like confidentiality could be more easily compromised with electronic record keeping; in actuality, if necessary precautions are taken, information stored electronically can be quite secure. Filing claims electronically will probably trigger your obligation to comply with the Health Insurance Portability and Accountability Act (HIPAA) if you are not already compliant.

Outsourcing. Outsource some of your administrative activities by using outside companies to perform tasks such as billing, collection, transcription and answering services.

• Pros. You benefit from the expertise and range of services available to a larger company. You lighten your administrative workload without having to hire, train and manage an employee. Can be a good option for occasional or sporadic activities.
• Cons. You lose direct control over how administrative functions are performed. You need to oversee and monitor the work of the vendor, who may not understand the intricacies of your practice. Can cost more than handling functions internally.

Hiring part-time help. Hire a part-time employee to provide administrative support one or two days per week, a few days per month or during busy office hours.

• Pros. You maintain oversight of administrative functions. Costs less than hiring full-time staff and may not require you to offer expensive employee benefits. Offers flexible scheduling options such as evening or weekend hours. Keeps your office running smoothly during busy times.
• Cons. Administrative support is only available at certain times. Part-time workers may be less committed to the job and you may have more employee turnover. Can be difficult to find qualified candidates who want part-time employment. As an employer, you will have increased management duties and responsibilities to state and federal agencies, such as withholding and paying taxes, maintaining required insurance, and keeping personnel records (see final paragraph below).

Hiring full-time help. Hire full-time administrative staff to help keep your practice running smoothly.

• Pros. Provides consistent administrative support for your practice. Relieves you of day-to-day clerical duties, but allows you to maintain oversight of administrative functions. Having a regular contact point can demonstrate professionalism and enhance your public and client relations. Can help streamline scheduling and billing.
• Cons. Requires increased costs for wages and benefits. As an employer, you will have increased management duties and responsibilities to state and federal agencies, such as withholding and paying taxes, maintaining required insurance, and keeping personnel records (see final paragraph below).

It is important to manage administrative responsibilities in a way that works best for you. Consider your administrative needs, your financial constraints and your plans for the future of your practice.

Remember that the options listed above are not mutually exclusive. The best approach for you may include hiring staff to handle some tasks, outsourcing other functions, and using information technology to enhance the overall efficiency of your practice.

It is important to note that, although hiring office staff can be a cost-effective approach to running a successful practice, taking on the role of employer comes with additional responsibilities. You will need to educate yourself about a variety of topics, including employment laws, hiring practices, basic management skills and employee training and development. Watch for articles on these topics in future issues of PracticeUpdate.