How to address management company complaints

By Stephen W. Earnhart, MS
CEO
Earnhart & Associates
Austin, TX

Last month we talked about why hospitals and surgery centers are looking for outside management companies to help ensure they are the best that they can be.

Having an outside professional manage your staff and services is a neato, hip, and cool solution! Yay! Problem solved! … Or is it just beginning?

Here are some common issues we have uncovered from facilities that are professionally managed by experts. They are in no particular order of importance because each facility has its own order of pet peeves.

1. When representatives of the management company visit the facility, they spend most of their time on the phone with some other facility and don’t interact with the staff where they are. (Huge complaint!)
2. Seemingly irrelevant people from the management company come through the facility and appear to offer nothing meaningful, and then we get stuck with large travel expenses for them.
3. With all this “talent” on board, why do we, the staff, still have to do all the work with payer negotiations, third-party vendors, and personnel issues that we were told their HR staff would handle?
4. We don’t understand why, when their “regional directors” come to town, we go to eat at the fanciest of restaurants – and pick up the check, but when budgeting for staff meals in the budget, they always eliminate those.
5. The docs used to complain about how “inept” we were. Now they complain about the ineptness of the management company.
6. It seems like they are never around during holidays or toward the end of the year. We are told that the management company is “restricting travel” toward the end of the year, so they can get their bonuses.
7. According to the docs, their quarterly distributions are lower than they were before the management company was hired.
8. We get lots of calls from potential clients for the management company wanting to know if they should hire them. The reality is that if they get more clients, we get less time with them than we do now!
9. It seems like the conferences and CEUs we were told we could expect just never seem to materialize.
10. It seems like the vice presidents or regional directors have a short life span with these companies. It seems like when you get used to them, they move on, and you get another one to train.

So what do you do? It almost seems as if some facilities go from the frying pan right into the fire. Clearly, if you can self-manage your facility, you are better off, but some just cannot. The larger hospitals and ASCs can hire the staff to deal with the regulatory nightmares and the long list of “stuff that just needs to be done by people that I don’t have.” For most of us, however, there just isn’t enough staff to do it, or do it right. So if you MUST hire a management company, consider the following requirements:

1. Short-term contract. Most management companies will not do less than a 10-year agreement. Period. Try to keep your initial contract to five years or less. If it works out, great! Many of them do, but if it doesn’t, there is a light at the end of the tunnel when they leave.
2. Insist upon meeting the person who is going to oversee your facility! You don’t want to get the new kid in the company who is using you as his/her learning curve.
3. Ensure the contract gives you the opportunity to approve replacement of your “regional director.” Ask to see the resume. Ask to call the references.
4. Your contract should require them to justify any people visiting your facility BEFORE they incur travel expenses that you are going to pay after they leave.
5. Finally, have a bullet list of exactly what services they provide. They often will drop names and services they bring to the table, but you never hear about them again.