Joseph S. Eastern

Last month, I discussed the complaint patients make most often: waiting too long to see the doctor.

I suggested ways to help you stay on time, but ultimately, your success in staying on schedule depends in large part on your schedule.

No practice can run on schedule every day. There are simply too many uncontrollable variables inherent in the practice of medicine. And no single scheduling system is perfect for every practice.

The most traditional and probably the most popular scheduling system is continuous scheduling. Patients are booked at regular intervals throughout the hour; for example, the first at 9 a.m., the next at 9:15, the next at 9:30, and so on. (In the interests of clarity and simplicity, I am assuming a rate of one patient per 15 minutes. If you schedule two or even three per 15 minutes, adjust the numbers accordingly.)

Continuous scheduling is popular with patients, but it is far less than ideal for most dermatologists running high-volume practices. If the 9-a.m. patient arrives late, your entire half-day is delayed before you even start. Similarly, a single visit that takes longer than anticipated, or one unplanned patient who needs urgent care, will throw off the entire schedule.

Even without late patients or work-ins, continuous scheduling can be inefficient in high-volume offices because the workload tends to pile up toward the end of each hour as new patients arrive and you struggle to keep up.

For many offices, a better system is wave scheduling. Instead of one patient per 15 minutes, you would schedule two or three per half-hour, or three on the hour, two at 20 minutes past, and one at 40 minutes past, so that patients arrive in waves, rather than continuously. In that way, variations in time needed per patient, as well as problems created by the inevitable disruptions, will average out over each hour during the day.

Also, those end-of-hour pileups are minimized because most patients come in early in each hour.

A third, relatively new scheduling option, called open-access scheduling, is gradually gaining in popularity. More about that next month.

No appointment system, though, no matter how efficient, will eliminate the problems created by common disruptions—no-shows, tardy patients, tardy doctors, and “work-ins”—and each must be addressed individually.

Dealing with no-shows is a column in itself—particularly in dermatology, where the no-show rate is much higher than average. That column ran in the December 2004 issue.

To briefly summarize, you can eliminate one of the major reasons patients miss appointments—simple forgetfulness—by calling them the day before. Reasonably priced phone software is available from a variety of vendors to automate this process. You could also hire a teenager to do it after school each day.

Document each missed appointment in the patient's chart; it's important clinical and medicolegal information. A second missed appointment should prompt a warning, either verbal or written, that measures will be taken if it happens again. Such measures might include a charge before future appointments will be accepted, a nonrefundable advance deposit (for surgical procedures), or outright dismissal from the practice. Habitual no-shows should be dismissed. You cannot afford them.

Late-arriving patients need to be politely advised by a staffer that the efficient flow of the office depends on their punctuality. Anyone arriving more than half an hour late should be rescheduled. Treat habitually tardy patients the same way you deal with no-shows.

Of course, patients aren't the only culprits when schedules run late; all too often, it's the physician's fault.

Most patients understand unavoidable delays, but they resent being kept waiting without an explanation. You should never take shortcuts with a patient's care to see the next patient on time, but when it becomes clear that unforeseen issues will cause delays, make sure your staff explains that to patients who will be affected by it. Offer to reschedule them if the delay will be significant.

Unscheduled visits should be permitted only in situations that are truly urgent. As I mentioned last month, work-ins should be inserted as late in the schedule as possible to minimize inconvenience to patients with appointments. And once again, when a work-in does put you behind schedule, make sure the patients who are affected receive a prompt explanation.

To respond to this column, e-mail Dr. Eastern at [email protected]

Last month, I discussed the complaint patients make most often: waiting too long to see the doctor.

I suggested ways to help you stay on time, but ultimately, your success in staying on schedule depends in large part on your schedule.

No practice can run on schedule every day. There are simply too many uncontrollable variables inherent in the practice of medicine. And no single scheduling system is perfect for every practice.

The most traditional and probably the most popular scheduling system is continuous scheduling. Patients are booked at regular intervals throughout the hour; for example, the first at 9 a.m., the next at 9:15, the next at 9:30, and so on. (In the interests of clarity and simplicity, I am assuming a rate of one patient per 15 minutes. If you schedule two or even three per 15 minutes, adjust the numbers accordingly.)

Continuous scheduling is popular with patients, but it is far less than ideal for most dermatologists running high-volume practices. If the 9-a.m. patient arrives late, your entire half-day is delayed before you even start. Similarly, a single visit that takes longer than anticipated, or one unplanned patient who needs urgent care, will throw off the entire schedule.

Even without late patients or work-ins, continuous scheduling can be inefficient in high-volume offices because the workload tends to pile up toward the end of each hour as new patients arrive and you struggle to keep up.

For many offices, a better system is wave scheduling. Instead of one patient per 15 minutes, you would schedule two or three per half-hour, or three on the hour, two at 20 minutes past, and one at 40 minutes past, so that patients arrive in waves, rather than continuously. In that way, variations in time needed per patient, as well as problems created by the inevitable disruptions, will average out over each hour during the day.

Also, those end-of-hour pileups are minimized because most patients come in early in each hour.

A third, relatively new scheduling option, called open-access scheduling, is gradually gaining in popularity. More about that next month.

No appointment system, though, no matter how efficient, will eliminate the problems created by common disruptions—no-shows, tardy patients, tardy doctors, and “work-ins”—and each must be addressed individually.

Dealing with no-shows is a column in itself—particularly in dermatology, where the no-show rate is much higher than average. That column ran in the December 2004 issue.

To briefly summarize, you can eliminate one of the major reasons patients miss appointments—simple forgetfulness—by calling them the day before. Reasonably priced phone software is available from a variety of vendors to automate this process. You could also hire a teenager to do it after school each day.

Document each missed appointment in the patient's chart; it's important clinical and medicolegal information. A second missed appointment should prompt a warning, either verbal or written, that measures will be taken if it happens again. Such measures might include a charge before future appointments will be accepted, a nonrefundable advance deposit (for surgical procedures), or outright dismissal from the practice. Habitual no-shows should be dismissed. You cannot afford them.

Late-arriving patients need to be politely advised by a staffer that the efficient flow of the office depends on their punctuality. Anyone arriving more than half an hour late should be rescheduled. Treat habitually tardy patients the same way you deal with no-shows.

Of course, patients aren't the only culprits when schedules run late; all too often, it's the physician's fault.

Most patients understand unavoidable delays, but they resent being kept waiting without an explanation. You should never take shortcuts with a patient's care to see the next patient on time, but when it becomes clear that unforeseen issues will cause delays, make sure your staff explains that to patients who will be affected by it. Offer to reschedule them if the delay will be significant.

Unscheduled visits should be permitted only in situations that are truly urgent. As I mentioned last month, work-ins should be inserted as late in the schedule as possible to minimize inconvenience to patients with appointments. And once again, when a work-in does put you behind schedule, make sure the patients who are affected receive a prompt explanation.

To respond to this column, e-mail Dr. Eastern at [email protected]

Last month, I discussed the complaint patients make most often: waiting too long to see the doctor.

I suggested ways to help you stay on time, but ultimately, your success in staying on schedule depends in large part on your schedule.

No practice can run on schedule every day. There are simply too many uncontrollable variables inherent in the practice of medicine. And no single scheduling system is perfect for every practice.

The most traditional and probably the most popular scheduling system is continuous scheduling. Patients are booked at regular intervals throughout the hour; for example, the first at 9 a.m., the next at 9:15, the next at 9:30, and so on. (In the interests of clarity and simplicity, I am assuming a rate of one patient per 15 minutes. If you schedule two or even three per 15 minutes, adjust the numbers accordingly.)

Continuous scheduling is popular with patients, but it is far less than ideal for most dermatologists running high-volume practices. If the 9-a.m. patient arrives late, your entire half-day is delayed before you even start. Similarly, a single visit that takes longer than anticipated, or one unplanned patient who needs urgent care, will throw off the entire schedule.

Even without late patients or work-ins, continuous scheduling can be inefficient in high-volume offices because the workload tends to pile up toward the end of each hour as new patients arrive and you struggle to keep up.

For many offices, a better system is wave scheduling. Instead of one patient per 15 minutes, you would schedule two or three per half-hour, or three on the hour, two at 20 minutes past, and one at 40 minutes past, so that patients arrive in waves, rather than continuously. In that way, variations in time needed per patient, as well as problems created by the inevitable disruptions, will average out over each hour during the day.

Also, those end-of-hour pileups are minimized because most patients come in early in each hour.

A third, relatively new scheduling option, called open-access scheduling, is gradually gaining in popularity. More about that next month.

No appointment system, though, no matter how efficient, will eliminate the problems created by common disruptions—no-shows, tardy patients, tardy doctors, and “work-ins”—and each must be addressed individually.

Dealing with no-shows is a column in itself—particularly in dermatology, where the no-show rate is much higher than average. That column ran in the December 2004 issue.

To briefly summarize, you can eliminate one of the major reasons patients miss appointments—simple forgetfulness—by calling them the day before. Reasonably priced phone software is available from a variety of vendors to automate this process. You could also hire a teenager to do it after school each day.

Document each missed appointment in the patient's chart; it's important clinical and medicolegal information. A second missed appointment should prompt a warning, either verbal or written, that measures will be taken if it happens again. Such measures might include a charge before future appointments will be accepted, a nonrefundable advance deposit (for surgical procedures), or outright dismissal from the practice. Habitual no-shows should be dismissed. You cannot afford them.

Late-arriving patients need to be politely advised by a staffer that the efficient flow of the office depends on their punctuality. Anyone arriving more than half an hour late should be rescheduled. Treat habitually tardy patients the same way you deal with no-shows.

Of course, patients aren't the only culprits when schedules run late; all too often, it's the physician's fault.

Most patients understand unavoidable delays, but they resent being kept waiting without an explanation. You should never take shortcuts with a patient's care to see the next patient on time, but when it becomes clear that unforeseen issues will cause delays, make sure your staff explains that to patients who will be affected by it. Offer to reschedule them if the delay will be significant.

Unscheduled visits should be permitted only in situations that are truly urgent. As I mentioned last month, work-ins should be inserted as late in the schedule as possible to minimize inconvenience to patients with appointments. And once again, when a work-in does put you behind schedule, make sure the patients who are affected receive a prompt explanation.

To respond to this column, e-mail Dr. Eastern at [email protected]

Consumer Reports surveyed its readers last year regarding their satisfaction with their medical care and found that the “overwhelming majority … were highly satisfied with their doctors.” Of course, they did have some complaints.

As you might expect, their top complaint about doctors was the time spent waiting to see them: Twenty-four percent said they frequently waited 30 minutes or longer.

I've written about punctuality before, but this is such a ubiquitous problem that it bears repeating.

Here are some suggestions that can help to keep you on track:

Start on time. That seems obvious, but I'm always amazed at the number of doctors who admit to running late who also admit that they start late. If you're in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem. If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Every office should have a time clock, not only for employees, but for patients as well. As each patient arrives, have your receptionist time-stamp the “encounter form” that goes to the back with the chart. As you take each chart off the door and enter the exam room, one glance at the time stamp will tell you exactly how long that patient has been waiting for you.

Schedule all surgeries. If you haven't scheduled the time necessary for a surgical procedure, don't do it. It's tempting to “squeeze in” an excision because you feel guilty that the patient has already had to wait for you, but every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes.

Explain to the patient that surgery requires extra time and it cannot be rushed, so you will have to schedule another appointment.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients.

This may seem counterintuitive. Receptionists often assume it's better to squeeze them in early, while you're still running on time, but doing that guarantees you will run late, and it isn't fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell these patients, “Our schedule is full today, but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know which list I mean: “No. 16: My right big toe itches. No. 17: I think I feel something on my back. No. 18: This weird chartreuse thing on my arm. …” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems and address them.

For the rest of the items on the list, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

Then I will ask if I can place the list (or a photocopy) in the patient's chart. It is, after all, important clinical information.

All of the problems on the list are important to the patient and should be addressed—but on your schedule, not on the patient's.

Avoid interruptions. Especially phone calls. Unless it's an emergency or an immediate family member, my receptionists say, “I'm sorry, the doctor is with patients. May I take a message?” Everyone—even other physicians—understands. Just be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

Don't stop to open the mail, to do paperwork, or to perform any other task that can be delegated.

There will be times, of course, when you run late, but they should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give almost every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, the other leading patient complaints in the Consumer Reports survey were: couldn't schedule an appointment within a week (19%), spent too little time with me (9%), didn't provide test results promptly (7%), and didn't respond to my phone calls promptly (6%).

Now would be an excellent opportunity to identify and address any of those problems as well.

To respond to this column, e-mail Dr. Eastern at [email protected]

Consumer Reports surveyed its readers last year regarding their satisfaction with their medical care and found that the “overwhelming majority … were highly satisfied with their doctors.” Of course, they did have some complaints.

As you might expect, their top complaint about doctors was the time spent waiting to see them: Twenty-four percent said they frequently waited 30 minutes or longer.

I've written about punctuality before, but this is such a ubiquitous problem that it bears repeating.

Here are some suggestions that can help to keep you on track:

Start on time. That seems obvious, but I'm always amazed at the number of doctors who admit to running late who also admit that they start late. If you're in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem. If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Every office should have a time clock, not only for employees, but for patients as well. As each patient arrives, have your receptionist time-stamp the “encounter form” that goes to the back with the chart. As you take each chart off the door and enter the exam room, one glance at the time stamp will tell you exactly how long that patient has been waiting for you.

Schedule all surgeries. If you haven't scheduled the time necessary for a surgical procedure, don't do it. It's tempting to “squeeze in” an excision because you feel guilty that the patient has already had to wait for you, but every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes.

Explain to the patient that surgery requires extra time and it cannot be rushed, so you will have to schedule another appointment.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients.

This may seem counterintuitive. Receptionists often assume it's better to squeeze them in early, while you're still running on time, but doing that guarantees you will run late, and it isn't fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell these patients, “Our schedule is full today, but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know which list I mean: “No. 16: My right big toe itches. No. 17: I think I feel something on my back. No. 18: This weird chartreuse thing on my arm. …” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems and address them.

For the rest of the items on the list, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

Then I will ask if I can place the list (or a photocopy) in the patient's chart. It is, after all, important clinical information.

All of the problems on the list are important to the patient and should be addressed—but on your schedule, not on the patient's.

Avoid interruptions. Especially phone calls. Unless it's an emergency or an immediate family member, my receptionists say, “I'm sorry, the doctor is with patients. May I take a message?” Everyone—even other physicians—understands. Just be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

Don't stop to open the mail, to do paperwork, or to perform any other task that can be delegated.

There will be times, of course, when you run late, but they should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give almost every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, the other leading patient complaints in the Consumer Reports survey were: couldn't schedule an appointment within a week (19%), spent too little time with me (9%), didn't provide test results promptly (7%), and didn't respond to my phone calls promptly (6%).

Now would be an excellent opportunity to identify and address any of those problems as well.

To respond to this column, e-mail Dr. Eastern at [email protected]

Consumer Reports surveyed its readers last year regarding their satisfaction with their medical care and found that the “overwhelming majority … were highly satisfied with their doctors.” Of course, they did have some complaints.

As you might expect, their top complaint about doctors was the time spent waiting to see them: Twenty-four percent said they frequently waited 30 minutes or longer.

I've written about punctuality before, but this is such a ubiquitous problem that it bears repeating.

Here are some suggestions that can help to keep you on track:

Start on time. That seems obvious, but I'm always amazed at the number of doctors who admit to running late who also admit that they start late. If you're in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem. If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Every office should have a time clock, not only for employees, but for patients as well. As each patient arrives, have your receptionist time-stamp the “encounter form” that goes to the back with the chart. As you take each chart off the door and enter the exam room, one glance at the time stamp will tell you exactly how long that patient has been waiting for you.

Schedule all surgeries. If you haven't scheduled the time necessary for a surgical procedure, don't do it. It's tempting to “squeeze in” an excision because you feel guilty that the patient has already had to wait for you, but every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes.

Explain to the patient that surgery requires extra time and it cannot be rushed, so you will have to schedule another appointment.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients.

This may seem counterintuitive. Receptionists often assume it's better to squeeze them in early, while you're still running on time, but doing that guarantees you will run late, and it isn't fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell these patients, “Our schedule is full today, but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know which list I mean: “No. 16: My right big toe itches. No. 17: I think I feel something on my back. No. 18: This weird chartreuse thing on my arm. …” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems and address them.

For the rest of the items on the list, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

Then I will ask if I can place the list (or a photocopy) in the patient's chart. It is, after all, important clinical information.

All of the problems on the list are important to the patient and should be addressed—but on your schedule, not on the patient's.

Avoid interruptions. Especially phone calls. Unless it's an emergency or an immediate family member, my receptionists say, “I'm sorry, the doctor is with patients. May I take a message?” Everyone—even other physicians—understands. Just be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

Don't stop to open the mail, to do paperwork, or to perform any other task that can be delegated.

There will be times, of course, when you run late, but they should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give almost every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, the other leading patient complaints in the Consumer Reports survey were: couldn't schedule an appointment within a week (19%), spent too little time with me (9%), didn't provide test results promptly (7%), and didn't respond to my phone calls promptly (6%).

Now would be an excellent opportunity to identify and address any of those problems as well.

To respond to this column, e-mail Dr. Eastern at [email protected]

I recently received a lengthy e-mail from a very worried woman. She claimed to be an established patient in my office, which I had no way of confirming because she did not sign her message. She asked many questions about sexually transmitted diseases and how they might affect her and a new boyfriend.

I was undecided on how to reply, or even whether to reply at all, so I posted my dilemma on the DermChat e-mail list to see how other dermatologists might handle such a situation.

Responses were all over the map—from “I never answer patient e-mails” to “What harm could it do, she's better off getting correct answers from you than incorrect answers from some 'advocacy' Web site”—and everything in between.

Clearly, this is a controversial issue that will only get more controversial in the future, so I decided to look at what has been published on the subject.

It turns out that, as early as 1998, two German investigators asked this same question and designed a study to address it (JAMA 1998;280:1333–5). Posing as a fictitious patient, they sent e-mails describing an acute dermatologic problem to random Web sites offering dermatologic information, tallied the responses they received, and followed up with a questionnaire to responders and nonresponders alike.

As with my informal survey, the authors found what they termed “a striking lack of consensus” on how to deal with this situation: Of the 50% who responded to the fictitious patient's e-mail, 31% refused to give advice without seeing the patient, but 59% offered a diagnosis, with a third of that group going on to provide specific advice about therapy.

In response to the questionnaire, 28% said that they tended not to answer any patient e-mails, 24% said they usually replied with a standard message, and 24% said they answered each request individually. The investigators concluded that “standards for physician response to unsolicited patient e-mail are needed.”

Unfortunately, my DermChat survey suggests that, 10 years later, there is still nothing like a consensus on this issue.

In the interim, several groups, including the American Medical Informatics Association http://134.174.100.34/AMIA%20E-mail%20Guidelines.pdfwww.medem.com/phy/phy_eriskguidelines.cfmwww.ama-assn.org/apps/pf_new/pf_oline?f_n=browse&doc=policyfiles/HnE/H-478.997.htm

Your guidelines may be very simple (if you decide never to answer any queries) or very complex, depending on your situation and personal philosophy, but all guidelines should cover such issues as authentication of patient correspondents, informed consent of those patients, licensing jurisdiction (if you receive e-mails from states in which you are not licensed), and above all, confidentiality.

Contrary to popular belief, ordinary unencrypted e-mail does not necessarily violate the Health Insurance Portability and Accountability Act (HIPAA). As I've noted many times, HIPAA allows you to handle medical information in just about any way you wish, as long as patients are informed of what you are doing and accept any associated risks of breach of privacy. As long as the Notice of Privacy Practices that you distribute to patients explains your e-mail policies, and each e-mail includes a standard confidentiality disclaimer, most experts say you will be HIPAA compliant.

If the lack of encryption and other privacy safeguards makes you or your patients uncomfortable, encryption software can be added to your practice's e-mail system. Rather than simply encrypting your e-mail, though, consider adopting Web-based messaging. Patients enter your Web site and send a message using an electronic template that you design. You (or a designated staffer) will be notified by regular e-mail when messages are received, and you can post a reply on a page that can only be accessed by the patient. Besides enhancing privacy and security, you can state your guidelines to preclude any misunderstanding of what you will and will not address online.

Web-based messaging services can be freestanding or incorporated into existing secure Web sites.

And the e-mail query that triggered all of this? I responded, but told the patient I could not provide specific answers to such personal questions over the Internet, particularly when they were asked anonymously. I said I would be happy to address her concerns in person, in my office.

And now, I'm writing my guidelines.

To respond to this column, e-mail Dr. Eastern at [email protected]

I recently received a lengthy e-mail from a very worried woman. She claimed to be an established patient in my office, which I had no way of confirming because she did not sign her message. She asked many questions about sexually transmitted diseases and how they might affect her and a new boyfriend.

I was undecided on how to reply, or even whether to reply at all, so I posted my dilemma on the DermChat e-mail list to see how other dermatologists might handle such a situation.

Responses were all over the map—from “I never answer patient e-mails” to “What harm could it do, she's better off getting correct answers from you than incorrect answers from some 'advocacy' Web site”—and everything in between.

Clearly, this is a controversial issue that will only get more controversial in the future, so I decided to look at what has been published on the subject.

It turns out that, as early as 1998, two German investigators asked this same question and designed a study to address it (JAMA 1998;280:1333–5). Posing as a fictitious patient, they sent e-mails describing an acute dermatologic problem to random Web sites offering dermatologic information, tallied the responses they received, and followed up with a questionnaire to responders and nonresponders alike.

As with my informal survey, the authors found what they termed “a striking lack of consensus” on how to deal with this situation: Of the 50% who responded to the fictitious patient's e-mail, 31% refused to give advice without seeing the patient, but 59% offered a diagnosis, with a third of that group going on to provide specific advice about therapy.

In response to the questionnaire, 28% said that they tended not to answer any patient e-mails, 24% said they usually replied with a standard message, and 24% said they answered each request individually. The investigators concluded that “standards for physician response to unsolicited patient e-mail are needed.”

Unfortunately, my DermChat survey suggests that, 10 years later, there is still nothing like a consensus on this issue.

In the interim, several groups, including the American Medical Informatics Association http://134.174.100.34/AMIA%20E-mail%20Guidelines.pdfwww.medem.com/phy/phy_eriskguidelines.cfmwww.ama-assn.org/apps/pf_new/pf_oline?f_n=browse&doc=policyfiles/HnE/H-478.997.htm

Your guidelines may be very simple (if you decide never to answer any queries) or very complex, depending on your situation and personal philosophy, but all guidelines should cover such issues as authentication of patient correspondents, informed consent of those patients, licensing jurisdiction (if you receive e-mails from states in which you are not licensed), and above all, confidentiality.

Contrary to popular belief, ordinary unencrypted e-mail does not necessarily violate the Health Insurance Portability and Accountability Act (HIPAA). As I've noted many times, HIPAA allows you to handle medical information in just about any way you wish, as long as patients are informed of what you are doing and accept any associated risks of breach of privacy. As long as the Notice of Privacy Practices that you distribute to patients explains your e-mail policies, and each e-mail includes a standard confidentiality disclaimer, most experts say you will be HIPAA compliant.

If the lack of encryption and other privacy safeguards makes you or your patients uncomfortable, encryption software can be added to your practice's e-mail system. Rather than simply encrypting your e-mail, though, consider adopting Web-based messaging. Patients enter your Web site and send a message using an electronic template that you design. You (or a designated staffer) will be notified by regular e-mail when messages are received, and you can post a reply on a page that can only be accessed by the patient. Besides enhancing privacy and security, you can state your guidelines to preclude any misunderstanding of what you will and will not address online.

Web-based messaging services can be freestanding or incorporated into existing secure Web sites.

And the e-mail query that triggered all of this? I responded, but told the patient I could not provide specific answers to such personal questions over the Internet, particularly when they were asked anonymously. I said I would be happy to address her concerns in person, in my office.

And now, I'm writing my guidelines.

To respond to this column, e-mail Dr. Eastern at [email protected]

I recently received a lengthy e-mail from a very worried woman. She claimed to be an established patient in my office, which I had no way of confirming because she did not sign her message. She asked many questions about sexually transmitted diseases and how they might affect her and a new boyfriend.

I was undecided on how to reply, or even whether to reply at all, so I posted my dilemma on the DermChat e-mail list to see how other dermatologists might handle such a situation.

Responses were all over the map—from “I never answer patient e-mails” to “What harm could it do, she's better off getting correct answers from you than incorrect answers from some 'advocacy' Web site”—and everything in between.

Clearly, this is a controversial issue that will only get more controversial in the future, so I decided to look at what has been published on the subject.

It turns out that, as early as 1998, two German investigators asked this same question and designed a study to address it (JAMA 1998;280:1333–5). Posing as a fictitious patient, they sent e-mails describing an acute dermatologic problem to random Web sites offering dermatologic information, tallied the responses they received, and followed up with a questionnaire to responders and nonresponders alike.

As with my informal survey, the authors found what they termed “a striking lack of consensus” on how to deal with this situation: Of the 50% who responded to the fictitious patient's e-mail, 31% refused to give advice without seeing the patient, but 59% offered a diagnosis, with a third of that group going on to provide specific advice about therapy.

In response to the questionnaire, 28% said that they tended not to answer any patient e-mails, 24% said they usually replied with a standard message, and 24% said they answered each request individually. The investigators concluded that “standards for physician response to unsolicited patient e-mail are needed.”

Unfortunately, my DermChat survey suggests that, 10 years later, there is still nothing like a consensus on this issue.

In the interim, several groups, including the American Medical Informatics Association http://134.174.100.34/AMIA%20E-mail%20Guidelines.pdfwww.medem.com/phy/phy_eriskguidelines.cfmwww.ama-assn.org/apps/pf_new/pf_oline?f_n=browse&doc=policyfiles/HnE/H-478.997.htm

Your guidelines may be very simple (if you decide never to answer any queries) or very complex, depending on your situation and personal philosophy, but all guidelines should cover such issues as authentication of patient correspondents, informed consent of those patients, licensing jurisdiction (if you receive e-mails from states in which you are not licensed), and above all, confidentiality.

Contrary to popular belief, ordinary unencrypted e-mail does not necessarily violate the Health Insurance Portability and Accountability Act (HIPAA). As I've noted many times, HIPAA allows you to handle medical information in just about any way you wish, as long as patients are informed of what you are doing and accept any associated risks of breach of privacy. As long as the Notice of Privacy Practices that you distribute to patients explains your e-mail policies, and each e-mail includes a standard confidentiality disclaimer, most experts say you will be HIPAA compliant.

If the lack of encryption and other privacy safeguards makes you or your patients uncomfortable, encryption software can be added to your practice's e-mail system. Rather than simply encrypting your e-mail, though, consider adopting Web-based messaging. Patients enter your Web site and send a message using an electronic template that you design. You (or a designated staffer) will be notified by regular e-mail when messages are received, and you can post a reply on a page that can only be accessed by the patient. Besides enhancing privacy and security, you can state your guidelines to preclude any misunderstanding of what you will and will not address online.

Web-based messaging services can be freestanding or incorporated into existing secure Web sites.

And the e-mail query that triggered all of this? I responded, but told the patient I could not provide specific answers to such personal questions over the Internet, particularly when they were asked anonymously. I said I would be happy to address her concerns in person, in my office.

And now, I'm writing my guidelines.

To respond to this column, e-mail Dr. Eastern at [email protected]

[email protected]

Many medical offices are following a popular trend in the business world by replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all of the the pros and cons before you make such a change in your office. A paid time off (PTO) policy is not without disadvantages.

Nevertheless, the advantages are significant. Employees like the concept because most of them are generally healthy and never use all of their sick leave. They enjoy being able to take the difference as extra vacation time, making for a more contented staff and workplace in general. And they appreciate being able to make time-off decisions for themselves and the increased flexibility that comes with that.

Employers like the policy because there is less paperwork and less abuse of sick leave. They don't have to make decisions about whether an employee is really sick or not, because reasons for absence are now irrelevant. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know the reasons.

However, critics argue that under a PTO system, employees are absent more frequently, which is sometimes true. In addition, employees who never used their full allotment of sick leave will typically use all of their PTO every year. Most of these extra absences can be controlled by requiring preapproval for any PTO except emergencies, though some critics say that requirement effectively replaces decisions about what constitutes an illness with decisions about what constitutes an emergency.

Employees could take salary in exchange for unused PTO, to be paid annually or when employment ends. In general, though, I don't think that is a good idea. Vacations are necessary and important for good office morale, and they should be taken by all employees and employers.

If you are going to allow PTO to accrue and to be paid later, then it's probably best to allow only a portion—say, 25% maximum—to be taken that way.

A major disadvantage of PTO is the possibility that employees won't stay home when they are ill. Some businesses that have converted to the system have found that employees tend to view all paid time off as vacation time, so when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many sick employees who should stay at home, come to the workplace where they risk infecting colleagues and patients and lowering their chances for quick recovery.

So before switching to a paid time off system, weigh all the pros and cons. Should you decide to proceed, try to anticipate potential problems and then establish clear guidelines to counter them.

Make sure everyone knows that, except for emergencies, they have to request PTO in advance. Define what is meant by “advance notice.” Is it 24 hours, or is it a week? Then define what constitutes an emergency, and put the definitions in writing. Some employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the better.

Finally, make it clear that sick employees should stay home, and that if they come to work sick, then they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

[email protected]

Many medical offices are following a popular trend in the business world by replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all of the the pros and cons before you make such a change in your office. A paid time off (PTO) policy is not without disadvantages.

Nevertheless, the advantages are significant. Employees like the concept because most of them are generally healthy and never use all of their sick leave. They enjoy being able to take the difference as extra vacation time, making for a more contented staff and workplace in general. And they appreciate being able to make time-off decisions for themselves and the increased flexibility that comes with that.

Employers like the policy because there is less paperwork and less abuse of sick leave. They don't have to make decisions about whether an employee is really sick or not, because reasons for absence are now irrelevant. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know the reasons.

However, critics argue that under a PTO system, employees are absent more frequently, which is sometimes true. In addition, employees who never used their full allotment of sick leave will typically use all of their PTO every year. Most of these extra absences can be controlled by requiring preapproval for any PTO except emergencies, though some critics say that requirement effectively replaces decisions about what constitutes an illness with decisions about what constitutes an emergency.

Employees could take salary in exchange for unused PTO, to be paid annually or when employment ends. In general, though, I don't think that is a good idea. Vacations are necessary and important for good office morale, and they should be taken by all employees and employers.

If you are going to allow PTO to accrue and to be paid later, then it's probably best to allow only a portion—say, 25% maximum—to be taken that way.

A major disadvantage of PTO is the possibility that employees won't stay home when they are ill. Some businesses that have converted to the system have found that employees tend to view all paid time off as vacation time, so when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many sick employees who should stay at home, come to the workplace where they risk infecting colleagues and patients and lowering their chances for quick recovery.

So before switching to a paid time off system, weigh all the pros and cons. Should you decide to proceed, try to anticipate potential problems and then establish clear guidelines to counter them.

Make sure everyone knows that, except for emergencies, they have to request PTO in advance. Define what is meant by “advance notice.” Is it 24 hours, or is it a week? Then define what constitutes an emergency, and put the definitions in writing. Some employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the better.

Finally, make it clear that sick employees should stay home, and that if they come to work sick, then they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

[email protected]

Many medical offices are following a popular trend in the business world by replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all of the the pros and cons before you make such a change in your office. A paid time off (PTO) policy is not without disadvantages.

Nevertheless, the advantages are significant. Employees like the concept because most of them are generally healthy and never use all of their sick leave. They enjoy being able to take the difference as extra vacation time, making for a more contented staff and workplace in general. And they appreciate being able to make time-off decisions for themselves and the increased flexibility that comes with that.

Employers like the policy because there is less paperwork and less abuse of sick leave. They don't have to make decisions about whether an employee is really sick or not, because reasons for absence are now irrelevant. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know the reasons.

However, critics argue that under a PTO system, employees are absent more frequently, which is sometimes true. In addition, employees who never used their full allotment of sick leave will typically use all of their PTO every year. Most of these extra absences can be controlled by requiring preapproval for any PTO except emergencies, though some critics say that requirement effectively replaces decisions about what constitutes an illness with decisions about what constitutes an emergency.

Employees could take salary in exchange for unused PTO, to be paid annually or when employment ends. In general, though, I don't think that is a good idea. Vacations are necessary and important for good office morale, and they should be taken by all employees and employers.

If you are going to allow PTO to accrue and to be paid later, then it's probably best to allow only a portion—say, 25% maximum—to be taken that way.

A major disadvantage of PTO is the possibility that employees won't stay home when they are ill. Some businesses that have converted to the system have found that employees tend to view all paid time off as vacation time, so when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many sick employees who should stay at home, come to the workplace where they risk infecting colleagues and patients and lowering their chances for quick recovery.

So before switching to a paid time off system, weigh all the pros and cons. Should you decide to proceed, try to anticipate potential problems and then establish clear guidelines to counter them.

Make sure everyone knows that, except for emergencies, they have to request PTO in advance. Define what is meant by “advance notice.” Is it 24 hours, or is it a week? Then define what constitutes an emergency, and put the definitions in writing. Some employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the better.

Finally, make it clear that sick employees should stay home, and that if they come to work sick, then they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

Insurance is one of the most necessary, and most hated, facts of life, particularly for physicians. We resent all the money we throw into a black hole every year, but in the event of an unforeseeable calamity it is indispensable.

Chances are that you're already insuring yourself against the worst calamities, but are you getting the most insurance for your premium money? To find out, it behooves you to meet with your insurance broker every couple of years and review all of your insurance coverage.

At first glance, malpractice insurance offers few opportunities to reduce costs, but more and more alternatives are becoming available as premiums on conventional policies continue to increase inexorably.

“Occurrence” policies remain the coverage of choice where they are available and affordable, but they are becoming an endangered species as fewer and fewer insurers remain willing to write them. “Claims made” policies are usually cheaper, and they provide the same coverage as long as you remain in practice. You will need “tail” coverage against belated claims after you retire, but some companies now provide free tail coverage once you've been insured for a minimum period (usually 5 years).

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers but differ in certain aspects of start-up, funding, and operations. For example, most exchanges require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, once the exchange becomes solvent.

Risk retention groups (RRGs) are similar to exchanges in that capital investments are usually required, but the owners are the insured parties themselves, who are ultimately responsible for all management and operational decisions, including the assurance of adequate funding. Most medical malpractice RRGs are licensed in Vermont or South Carolina because of favorable laws in those states, but they can be based in any state that allows them.

A third alternative is called a captive, which is generally defined as an insurance company formed by one or more noninsurance entities (such as medical practices) to write the insurance business of its owners. All participants are shareholders and all premiums (less administrative expenses) go toward enhancing the prosperity of the captive.

Reinsurance (usually not available to RRGs) protects the company against catastrophic losses. If all goes well, individual owners will be able to sell their shares at retirement for a nice profit—a profit that has grown tax free.

Exchanges, RRGs, and captives all carry risk: A few large claims can eat up all the profits and may even incur further financial obligations. But lack of profit is a certainty with traditional malpractice insurance.

If your current premiums are getting out of hand, ask your broker if any alternatives have become available in your area. While you are at it, you may want to review the rest of your insurance as well.

Worker's compensation insurance is mandatory in most states and heavily regulated, so there is little room for cutting expenses. Some states, however, do not require you, as the employer, to cover yourself, and eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you have adequate health and disability policies in place.

One additional policy to consider is employee practices liability insurance, which protects you from lawsuits brought by militant or disgruntled employees. I discussed this type of insurance in detail in last month's column, which can be found in the archives at www.skinandallergynews.com

If your financial situation has changed since your last insurance review, your life insurance needs have probably changed, too. As your retirement savings accumulate, less insurance is necessary. And if you own any expensive whole-life policies, you can probably convert them to much cheaper term insurance.

Disability insurance is not something to skimp on, but if you are approaching retirement age you may be able to decrease your coverage or even eliminate it if your retirement plan is far enough along.

Liability insurance is also no place to pinch pennies, but you might be able to add an umbrella policy providing comprehensive catastrophic coverage that may allow you to decrease your regular coverage or raise your deductible limits.

Health insurance offers numerous variables, with so many competing insurers and so many types of plans. If you still have expensive indemnity insurance, consider switching to an HMO, PPO, or any of the other plans in the alphabet soup available in today's market. Or consider raising your deductibles, which can lower premiums substantially.

If you're over 50 years of age, look into long-term care insurance. It's relatively inexpensive if you buy it while you're still healthy, and it could save you and your heirs a load of money on the other end.

Insurance is a necessary evil, but overinsurance is an unnecessary expense. Regular insurance reviews are the best way to be sure you have the right coverage, and only the right coverage.

To respond to this column, e-mail Dr. Eastern at [email protected]

Insurance is one of the most necessary, and most hated, facts of life, particularly for physicians. We resent all the money we throw into a black hole every year, but in the event of an unforeseeable calamity it is indispensable.

Chances are that you're already insuring yourself against the worst calamities, but are you getting the most insurance for your premium money? To find out, it behooves you to meet with your insurance broker every couple of years and review all of your insurance coverage.

At first glance, malpractice insurance offers few opportunities to reduce costs, but more and more alternatives are becoming available as premiums on conventional policies continue to increase inexorably.

“Occurrence” policies remain the coverage of choice where they are available and affordable, but they are becoming an endangered species as fewer and fewer insurers remain willing to write them. “Claims made” policies are usually cheaper, and they provide the same coverage as long as you remain in practice. You will need “tail” coverage against belated claims after you retire, but some companies now provide free tail coverage once you've been insured for a minimum period (usually 5 years).

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers but differ in certain aspects of start-up, funding, and operations. For example, most exchanges require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, once the exchange becomes solvent.

Risk retention groups (RRGs) are similar to exchanges in that capital investments are usually required, but the owners are the insured parties themselves, who are ultimately responsible for all management and operational decisions, including the assurance of adequate funding. Most medical malpractice RRGs are licensed in Vermont or South Carolina because of favorable laws in those states, but they can be based in any state that allows them.

A third alternative is called a captive, which is generally defined as an insurance company formed by one or more noninsurance entities (such as medical practices) to write the insurance business of its owners. All participants are shareholders and all premiums (less administrative expenses) go toward enhancing the prosperity of the captive.

Reinsurance (usually not available to RRGs) protects the company against catastrophic losses. If all goes well, individual owners will be able to sell their shares at retirement for a nice profit—a profit that has grown tax free.

Exchanges, RRGs, and captives all carry risk: A few large claims can eat up all the profits and may even incur further financial obligations. But lack of profit is a certainty with traditional malpractice insurance.

If your current premiums are getting out of hand, ask your broker if any alternatives have become available in your area. While you are at it, you may want to review the rest of your insurance as well.

Worker's compensation insurance is mandatory in most states and heavily regulated, so there is little room for cutting expenses. Some states, however, do not require you, as the employer, to cover yourself, and eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you have adequate health and disability policies in place.

One additional policy to consider is employee practices liability insurance, which protects you from lawsuits brought by militant or disgruntled employees. I discussed this type of insurance in detail in last month's column, which can be found in the archives at www.skinandallergynews.com

If your financial situation has changed since your last insurance review, your life insurance needs have probably changed, too. As your retirement savings accumulate, less insurance is necessary. And if you own any expensive whole-life policies, you can probably convert them to much cheaper term insurance.

Disability insurance is not something to skimp on, but if you are approaching retirement age you may be able to decrease your coverage or even eliminate it if your retirement plan is far enough along.

Liability insurance is also no place to pinch pennies, but you might be able to add an umbrella policy providing comprehensive catastrophic coverage that may allow you to decrease your regular coverage or raise your deductible limits.

Health insurance offers numerous variables, with so many competing insurers and so many types of plans. If you still have expensive indemnity insurance, consider switching to an HMO, PPO, or any of the other plans in the alphabet soup available in today's market. Or consider raising your deductibles, which can lower premiums substantially.

If you're over 50 years of age, look into long-term care insurance. It's relatively inexpensive if you buy it while you're still healthy, and it could save you and your heirs a load of money on the other end.

Insurance is a necessary evil, but overinsurance is an unnecessary expense. Regular insurance reviews are the best way to be sure you have the right coverage, and only the right coverage.

To respond to this column, e-mail Dr. Eastern at [email protected]

Insurance is one of the most necessary, and most hated, facts of life, particularly for physicians. We resent all the money we throw into a black hole every year, but in the event of an unforeseeable calamity it is indispensable.

Chances are that you're already insuring yourself against the worst calamities, but are you getting the most insurance for your premium money? To find out, it behooves you to meet with your insurance broker every couple of years and review all of your insurance coverage.

At first glance, malpractice insurance offers few opportunities to reduce costs, but more and more alternatives are becoming available as premiums on conventional policies continue to increase inexorably.

“Occurrence” policies remain the coverage of choice where they are available and affordable, but they are becoming an endangered species as fewer and fewer insurers remain willing to write them. “Claims made” policies are usually cheaper, and they provide the same coverage as long as you remain in practice. You will need “tail” coverage against belated claims after you retire, but some companies now provide free tail coverage once you've been insured for a minimum period (usually 5 years).

Other alternatives are gaining popularity as the demand for reasonably priced insurance increases. The most common, known as reciprocal exchanges, are very similar to traditional insurers but differ in certain aspects of start-up, funding, and operations. For example, most exchanges require policyholders to make capital contributions in addition to payment of premiums, at least in their early stages. You get your investment back, with interest, once the exchange becomes solvent.

Risk retention groups (RRGs) are similar to exchanges in that capital investments are usually required, but the owners are the insured parties themselves, who are ultimately responsible for all management and operational decisions, including the assurance of adequate funding. Most medical malpractice RRGs are licensed in Vermont or South Carolina because of favorable laws in those states, but they can be based in any state that allows them.

A third alternative is called a captive, which is generally defined as an insurance company formed by one or more noninsurance entities (such as medical practices) to write the insurance business of its owners. All participants are shareholders and all premiums (less administrative expenses) go toward enhancing the prosperity of the captive.

Reinsurance (usually not available to RRGs) protects the company against catastrophic losses. If all goes well, individual owners will be able to sell their shares at retirement for a nice profit—a profit that has grown tax free.

Exchanges, RRGs, and captives all carry risk: A few large claims can eat up all the profits and may even incur further financial obligations. But lack of profit is a certainty with traditional malpractice insurance.

If your current premiums are getting out of hand, ask your broker if any alternatives have become available in your area. While you are at it, you may want to review the rest of your insurance as well.

Worker's compensation insurance is mandatory in most states and heavily regulated, so there is little room for cutting expenses. Some states, however, do not require you, as the employer, to cover yourself, and eliminating that coverage could save you a substantial amount. This is only worth considering, of course, if you have adequate health and disability policies in place.

One additional policy to consider is employee practices liability insurance, which protects you from lawsuits brought by militant or disgruntled employees. I discussed this type of insurance in detail in last month's column, which can be found in the archives at www.skinandallergynews.com

If your financial situation has changed since your last insurance review, your life insurance needs have probably changed, too. As your retirement savings accumulate, less insurance is necessary. And if you own any expensive whole-life policies, you can probably convert them to much cheaper term insurance.

Disability insurance is not something to skimp on, but if you are approaching retirement age you may be able to decrease your coverage or even eliminate it if your retirement plan is far enough along.

Liability insurance is also no place to pinch pennies, but you might be able to add an umbrella policy providing comprehensive catastrophic coverage that may allow you to decrease your regular coverage or raise your deductible limits.

Health insurance offers numerous variables, with so many competing insurers and so many types of plans. If you still have expensive indemnity insurance, consider switching to an HMO, PPO, or any of the other plans in the alphabet soup available in today's market. Or consider raising your deductibles, which can lower premiums substantially.

If you're over 50 years of age, look into long-term care insurance. It's relatively inexpensive if you buy it while you're still healthy, and it could save you and your heirs a load of money on the other end.

Insurance is a necessary evil, but overinsurance is an unnecessary expense. Regular insurance reviews are the best way to be sure you have the right coverage, and only the right coverage.

To respond to this column, e-mail Dr. Eastern at [email protected]

Most physicians have a feeling that they carry too much insurance and that most of their policies are too expensive.

The policies you should have and how much they should cost will be covered in next month's column, but no matter what is in your insurance portfolio now, there is one relatively inexpensive policy—one you probably have never heard of—that you should definitely consider adding.

Recently, I corresponded with a dermatologist in California who experienced every employer's nightmare: He fired an incompetent employee, who promptly sued him for wrongful termination and accused him of sexual harassment to boot.

The charges were completely false, he told me, and the employee's transgressions were well documented, but defending the lawsuit would have been expensive, so his lawyer advised him to settle it for a significant sum of money.

Disasters like this are becoming more common. Plaintiffs' attorneys know all too well that most small businesses, including medical practices, are not protected against such legal actions and usually cannot afford to defend them in court.

Fortunately, there is a relatively inexpensive way to protect yourself: Employee practices liability insurance (EPLI) provides protection against many kinds of employee lawsuits that are not covered by conventional liability insurance. These include wrongful termination, sexual harassment, discrimination, breach of employment contract, negligent hiring or evaluation, failure to promote, wrongful discipline, mismanagement of benefits, and the ever-popular emotional distress.

EPLI would have defended the California dermatologist, had he carried it, against his employee's charges. In fact, there is a better than even chance that the plaintiff's attorney would have dropped the lawsuit entirely once informed that it would be aggressively defended.

As with all insurance, you should shop around for the best price and carefully read the policies on your short list.

All EPLI policies cover claims against your practice and its owners and employees, but some policies cover only claims against full-time employees.

Try to obtain the broadest coverage possible so that part-time, temporary, and seasonal employees, and, if possible, even applicants for employment and former employees also are covered.

You also should look for the most comprehensive policy in terms of coverage. Almost every EPLI policy covers the allegations mentioned above, but some offer a more comprehensive list of covered acts, such as invasion of privacy and defamation of character.

Also be aware of precisely what each policy does not cover. Most contain exclusions for punitive damages and court-imposed fines, as well as for criminal acts, fraud, and other clearly illegal conduct. For example, if it can be proved that you fired an employee because he or she refused to falsify insurance claims, any resulting civil suit against you will not be covered by EPLI, or any other type of insurance.

Depending on where you practice, it may be necessary to ask an employment lawyer to evaluate your individual EPLI needs.

An underwriter cannot anticipate every eventuality for you, particularly if he or she does not live in your area and is not familiar with employment conditions in your community.

Try to get a clause added that permits you to choose your own defense lawyer. Better still, pick a specific lawyer or firm that you trust and have that counsel named in an endorsement to the policy. Otherwise, the insurance carrier could select a lawyer who may not consider your interests to be a higher priority than those of the insurance company itself.

If you must accept the insurer's choice of counsel, you should find out whether that lawyer is experienced in employment law, which is a very specialized area. And just as with your malpractice policy, you will want to maintain as much control as possible over the settlement of claims. Ideally, no claim should be settled without your expressed permission.

As with any insurance policy you buy, be sure to choose an established carrier with ample EPLI experience and solid financial strength.

A low premium is no bargain if the carrier is new to EPLI, or goes belly up, or decides to cease covering employee practices liability. (As always, I have no financial interest in any company or product I discuss in this column.)

Above all, make sure that you can live with the claims definition and exclusions in the policy you choose and seek advice before you sign on the dotted line if you are unsure what your specific coverage needs are.

To respond to this column, e-mail Dr. Eastern at [email protected]

Most physicians have a feeling that they carry too much insurance and that most of their policies are too expensive.

The policies you should have and how much they should cost will be covered in next month's column, but no matter what is in your insurance portfolio now, there is one relatively inexpensive policy—one you probably have never heard of—that you should definitely consider adding.

Recently, I corresponded with a dermatologist in California who experienced every employer's nightmare: He fired an incompetent employee, who promptly sued him for wrongful termination and accused him of sexual harassment to boot.

The charges were completely false, he told me, and the employee's transgressions were well documented, but defending the lawsuit would have been expensive, so his lawyer advised him to settle it for a significant sum of money.

Disasters like this are becoming more common. Plaintiffs' attorneys know all too well that most small businesses, including medical practices, are not protected against such legal actions and usually cannot afford to defend them in court.

Fortunately, there is a relatively inexpensive way to protect yourself: Employee practices liability insurance (EPLI) provides protection against many kinds of employee lawsuits that are not covered by conventional liability insurance. These include wrongful termination, sexual harassment, discrimination, breach of employment contract, negligent hiring or evaluation, failure to promote, wrongful discipline, mismanagement of benefits, and the ever-popular emotional distress.

EPLI would have defended the California dermatologist, had he carried it, against his employee's charges. In fact, there is a better than even chance that the plaintiff's attorney would have dropped the lawsuit entirely once informed that it would be aggressively defended.

As with all insurance, you should shop around for the best price and carefully read the policies on your short list.

All EPLI policies cover claims against your practice and its owners and employees, but some policies cover only claims against full-time employees.

Try to obtain the broadest coverage possible so that part-time, temporary, and seasonal employees, and, if possible, even applicants for employment and former employees also are covered.

You also should look for the most comprehensive policy in terms of coverage. Almost every EPLI policy covers the allegations mentioned above, but some offer a more comprehensive list of covered acts, such as invasion of privacy and defamation of character.

Also be aware of precisely what each policy does not cover. Most contain exclusions for punitive damages and court-imposed fines, as well as for criminal acts, fraud, and other clearly illegal conduct. For example, if it can be proved that you fired an employee because he or she refused to falsify insurance claims, any resulting civil suit against you will not be covered by EPLI, or any other type of insurance.

Depending on where you practice, it may be necessary to ask an employment lawyer to evaluate your individual EPLI needs.

An underwriter cannot anticipate every eventuality for you, particularly if he or she does not live in your area and is not familiar with employment conditions in your community.

Try to get a clause added that permits you to choose your own defense lawyer. Better still, pick a specific lawyer or firm that you trust and have that counsel named in an endorsement to the policy. Otherwise, the insurance carrier could select a lawyer who may not consider your interests to be a higher priority than those of the insurance company itself.

If you must accept the insurer's choice of counsel, you should find out whether that lawyer is experienced in employment law, which is a very specialized area. And just as with your malpractice policy, you will want to maintain as much control as possible over the settlement of claims. Ideally, no claim should be settled without your expressed permission.

As with any insurance policy you buy, be sure to choose an established carrier with ample EPLI experience and solid financial strength.

A low premium is no bargain if the carrier is new to EPLI, or goes belly up, or decides to cease covering employee practices liability. (As always, I have no financial interest in any company or product I discuss in this column.)

Above all, make sure that you can live with the claims definition and exclusions in the policy you choose and seek advice before you sign on the dotted line if you are unsure what your specific coverage needs are.

To respond to this column, e-mail Dr. Eastern at [email protected]

Most physicians have a feeling that they carry too much insurance and that most of their policies are too expensive.

The policies you should have and how much they should cost will be covered in next month's column, but no matter what is in your insurance portfolio now, there is one relatively inexpensive policy—one you probably have never heard of—that you should definitely consider adding.

Recently, I corresponded with a dermatologist in California who experienced every employer's nightmare: He fired an incompetent employee, who promptly sued him for wrongful termination and accused him of sexual harassment to boot.

The charges were completely false, he told me, and the employee's transgressions were well documented, but defending the lawsuit would have been expensive, so his lawyer advised him to settle it for a significant sum of money.

Disasters like this are becoming more common. Plaintiffs' attorneys know all too well that most small businesses, including medical practices, are not protected against such legal actions and usually cannot afford to defend them in court.

Fortunately, there is a relatively inexpensive way to protect yourself: Employee practices liability insurance (EPLI) provides protection against many kinds of employee lawsuits that are not covered by conventional liability insurance. These include wrongful termination, sexual harassment, discrimination, breach of employment contract, negligent hiring or evaluation, failure to promote, wrongful discipline, mismanagement of benefits, and the ever-popular emotional distress.

EPLI would have defended the California dermatologist, had he carried it, against his employee's charges. In fact, there is a better than even chance that the plaintiff's attorney would have dropped the lawsuit entirely once informed that it would be aggressively defended.

As with all insurance, you should shop around for the best price and carefully read the policies on your short list.

All EPLI policies cover claims against your practice and its owners and employees, but some policies cover only claims against full-time employees.

Try to obtain the broadest coverage possible so that part-time, temporary, and seasonal employees, and, if possible, even applicants for employment and former employees also are covered.

You also should look for the most comprehensive policy in terms of coverage. Almost every EPLI policy covers the allegations mentioned above, but some offer a more comprehensive list of covered acts, such as invasion of privacy and defamation of character.

Also be aware of precisely what each policy does not cover. Most contain exclusions for punitive damages and court-imposed fines, as well as for criminal acts, fraud, and other clearly illegal conduct. For example, if it can be proved that you fired an employee because he or she refused to falsify insurance claims, any resulting civil suit against you will not be covered by EPLI, or any other type of insurance.

Depending on where you practice, it may be necessary to ask an employment lawyer to evaluate your individual EPLI needs.

An underwriter cannot anticipate every eventuality for you, particularly if he or she does not live in your area and is not familiar with employment conditions in your community.

Try to get a clause added that permits you to choose your own defense lawyer. Better still, pick a specific lawyer or firm that you trust and have that counsel named in an endorsement to the policy. Otherwise, the insurance carrier could select a lawyer who may not consider your interests to be a higher priority than those of the insurance company itself.

If you must accept the insurer's choice of counsel, you should find out whether that lawyer is experienced in employment law, which is a very specialized area. And just as with your malpractice policy, you will want to maintain as much control as possible over the settlement of claims. Ideally, no claim should be settled without your expressed permission.

As with any insurance policy you buy, be sure to choose an established carrier with ample EPLI experience and solid financial strength.

A low premium is no bargain if the carrier is new to EPLI, or goes belly up, or decides to cease covering employee practices liability. (As always, I have no financial interest in any company or product I discuss in this column.)

Above all, make sure that you can live with the claims definition and exclusions in the policy you choose and seek advice before you sign on the dotted line if you are unsure what your specific coverage needs are.

To respond to this column, e-mail Dr. Eastern at [email protected]

Many medical offices are following a popular trend in the business world—replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all the pros and cons before you make such a change in your office. Contrary to what you may have read, a paid time off (PTO) policy is not without disadvantages.

Its advantages, however, are significant. Employees like the concept because most of them are generally healthy and never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time-off decisions for themselves, and they like the increased flexibility that PTO provides.

Employers like it because there is less paperwork and less abuse of sick leave. They don't have to make any decisions about whether an employee is really sick or not since reasons for absence are now irrelevant, making feigned illnesses a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know or care about the reason for the request.

Critics of PTO say that employees are absent more frequently under a PTO system, which is sometimes true. Employees who never used their full allotment of sick leave will typically use all of their PTO every year, but most of these extra absences can be controlled by requiring prior approval for any PTO except emergencies.

Critics then point out that you are replacing decisions about what constitutes an illness with decisions about what constitutes an emergency, but as I will discuss below, most criteria for emergencies can be settled upon in advance.

You also have the option of allowing employees to take salary in exchange for unused PTO, which you can pay annually or when their employment ends. In general, though, I don't think that is a good idea. I believe vacations are necessary and important for good office morale, and they should be taken by all employees, as well as by all employers.

Remember Eastern's First Law: Your last words will not be, “I wish I had spent more time in the office.”

And as I've mentioned in several previous columns, you should be suspicious of any employee who refuses to take vacations. Such employees are often embezzlers who are afraid that someone will discover their illicit modus operandi during their absence.

If you're going to allow PTO to accrue and be paid later, it's probably best to allow only a portion (say, 25% maximum) to be taken that way.

The major disadvantage of PTO is the possibility that employees will resist staying home when they are ill. Some businesses converting to the PTO system have found that employees tend to view all paid time off as vacation time. So when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many employees with upper respiratory infections and other communicable illnesses will come to work and transmit illness to fellow employees and patients alike. Productivity drops as more employees get sick, and patients, needless to say, are not happy about illnesses acquired (or suspected to be acquired) at the doctor's office.

So before switching to a paid time off system, it is important to weigh all the pros and cons and consider your options. Should you decide to proceed, anticipate the potential problems and put strategies in place to counter them.

First, define “advance notice”: Is it 24 hours, or is it a week? Then decide how you will define an emergency, and put these definitions in writing. Employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the fewer hassles you will have.

Establish clear guidelines from the outset. Make sure everyone knows they will have to request PTO in advance except for emergencies.

Make it very clear that sick employees should stay home, and that if they come to work sick they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

To respond to this column, e-mail Dr. Eastern at [email protected]

Many medical offices are following a popular trend in the business world—replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all the pros and cons before you make such a change in your office. Contrary to what you may have read, a paid time off (PTO) policy is not without disadvantages.

Its advantages, however, are significant. Employees like the concept because most of them are generally healthy and never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time-off decisions for themselves, and they like the increased flexibility that PTO provides.

Employers like it because there is less paperwork and less abuse of sick leave. They don't have to make any decisions about whether an employee is really sick or not since reasons for absence are now irrelevant, making feigned illnesses a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know or care about the reason for the request.

Critics of PTO say that employees are absent more frequently under a PTO system, which is sometimes true. Employees who never used their full allotment of sick leave will typically use all of their PTO every year, but most of these extra absences can be controlled by requiring prior approval for any PTO except emergencies.

Critics then point out that you are replacing decisions about what constitutes an illness with decisions about what constitutes an emergency, but as I will discuss below, most criteria for emergencies can be settled upon in advance.

You also have the option of allowing employees to take salary in exchange for unused PTO, which you can pay annually or when their employment ends. In general, though, I don't think that is a good idea. I believe vacations are necessary and important for good office morale, and they should be taken by all employees, as well as by all employers.

Remember Eastern's First Law: Your last words will not be, “I wish I had spent more time in the office.”

And as I've mentioned in several previous columns, you should be suspicious of any employee who refuses to take vacations. Such employees are often embezzlers who are afraid that someone will discover their illicit modus operandi during their absence.

If you're going to allow PTO to accrue and be paid later, it's probably best to allow only a portion (say, 25% maximum) to be taken that way.

The major disadvantage of PTO is the possibility that employees will resist staying home when they are ill. Some businesses converting to the PTO system have found that employees tend to view all paid time off as vacation time. So when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many employees with upper respiratory infections and other communicable illnesses will come to work and transmit illness to fellow employees and patients alike. Productivity drops as more employees get sick, and patients, needless to say, are not happy about illnesses acquired (or suspected to be acquired) at the doctor's office.

So before switching to a paid time off system, it is important to weigh all the pros and cons and consider your options. Should you decide to proceed, anticipate the potential problems and put strategies in place to counter them.

First, define “advance notice”: Is it 24 hours, or is it a week? Then decide how you will define an emergency, and put these definitions in writing. Employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the fewer hassles you will have.

Establish clear guidelines from the outset. Make sure everyone knows they will have to request PTO in advance except for emergencies.

Make it very clear that sick employees should stay home, and that if they come to work sick they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

To respond to this column, e-mail Dr. Eastern at [email protected]

Many medical offices are following a popular trend in the business world—replacing employee sick leave, vacation, and any other miscellaneous time benefits with a combination of all of them, collectively referred to as “paid time off.”

There are several reasons why this is a good idea, but you should carefully consider all the pros and cons before you make such a change in your office. Contrary to what you may have read, a paid time off (PTO) policy is not without disadvantages.

Its advantages, however, are significant. Employees like the concept because most of them are generally healthy and never use all their sick leave. Allowing them to take the difference as extra vacation time makes them happy and makes your office more attractive to excellent prospects. They also appreciate being treated more like adults who can make time-off decisions for themselves, and they like the increased flexibility that PTO provides.

Employers like it because there is less paperwork and less abuse of sick leave. They don't have to make any decisions about whether an employee is really sick or not since reasons for absence are now irrelevant, making feigned illnesses a thing of the past. If an employee requests a day off with adequate notice, and there is adequate coverage of that employee's duties, you don't need to know or care about the reason for the request.

Critics of PTO say that employees are absent more frequently under a PTO system, which is sometimes true. Employees who never used their full allotment of sick leave will typically use all of their PTO every year, but most of these extra absences can be controlled by requiring prior approval for any PTO except emergencies.

Critics then point out that you are replacing decisions about what constitutes an illness with decisions about what constitutes an emergency, but as I will discuss below, most criteria for emergencies can be settled upon in advance.

You also have the option of allowing employees to take salary in exchange for unused PTO, which you can pay annually or when their employment ends. In general, though, I don't think that is a good idea. I believe vacations are necessary and important for good office morale, and they should be taken by all employees, as well as by all employers.

Remember Eastern's First Law: Your last words will not be, “I wish I had spent more time in the office.”

And as I've mentioned in several previous columns, you should be suspicious of any employee who refuses to take vacations. Such employees are often embezzlers who are afraid that someone will discover their illicit modus operandi during their absence.

If you're going to allow PTO to accrue and be paid later, it's probably best to allow only a portion (say, 25% maximum) to be taken that way.

The major disadvantage of PTO is the possibility that employees will resist staying home when they are ill. Some businesses converting to the PTO system have found that employees tend to view all paid time off as vacation time. So when they are sick, they don't want to “waste” any of their “vacation” days. The result is that many employees with upper respiratory infections and other communicable illnesses will come to work and transmit illness to fellow employees and patients alike. Productivity drops as more employees get sick, and patients, needless to say, are not happy about illnesses acquired (or suspected to be acquired) at the doctor's office.

So before switching to a paid time off system, it is important to weigh all the pros and cons and consider your options. Should you decide to proceed, anticipate the potential problems and put strategies in place to counter them.

First, define “advance notice”: Is it 24 hours, or is it a week? Then decide how you will define an emergency, and put these definitions in writing. Employees might regard waking up Monday morning with a bad hangover as an emergency, but you might not. Most would consider a sick child an emergency, but what about a malfunctioning car? Some circumstances will need to be decided on a case-by-case basis, but the more situations you can anticipate and settle in advance, the fewer hassles you will have.

Establish clear guidelines from the outset. Make sure everyone knows they will have to request PTO in advance except for emergencies.

Make it very clear that sick employees should stay home, and that if they come to work sick they will be sent home. You have an obligation to protect the rest of your employees, not to mention your patients (especially those who are elderly or immunocompromised), from a staff member with a potentially communicable illness.

To respond to this column, e-mail Dr. Eastern at [email protected]

I get a lot of questions and complaints from physicians about overhead. How should I define it? How do I calculate it? And, of course, how do I lower it?

Many physicians are surprised when I tell them that lowering their overhead isn't necessarily a good thing. In fact, it may be too low already.

Numerous studies have shown that practices with higher overhead generally produce higher net incomes for their physicians. The money has to be judiciously spent, of course, but keeping overhead costs too low can be counterproductive.

Too much cutting of operating expenses may be costing you revenue. Insufficient office space or too few staff may be crimping the office's efficiency and reducing the number of patients that can be seen.

Overhead is generally defined as the expense of maintaining your practice, not including depreciation, and is usually calculated first as an absolute number, then as total expenses as a percentage of total gross income. The percentage figure can be misleading, however.

If you're trying to decide whether your overhead is too high or too low, you'll need an itemized breakdown. That will require some “billable hours” from your accountant, but those hours will pay for themselves many times over because the itemization will allow you to see where you could be spending less and where you could be spending more.

It's important to understand that overhead is not always the enemy. It is an easy target because everyone can focus on it—and look for ways to decrease it. Compulsive attention to it, however, is often a sign that more important aspects of the practice are being neglected.

Consider revenue, for example. More often than not, it is better to increase gross receipts than to decrease overhead. As a famous businessman once told me, “Your ability to cut costs is limited, but your ability to increase revenue is unlimited.”

Negotiate better contracts with third-party payers. Improve collections, possibly with the credit card system I've discussed in several recent columns. Learn to code better and train your staff to do so as well. Use your time more efficiently. Don't worry so much about overhead. Would you rather keep 60% of $800,000 or 40% of $2 million?

I recently spoke with a prominent cosmetic dermatologist in New York City whose spa was bringing in a steady $1 million per year in revenue, but with 80% overhead. He was talking about closing it down because the overhead was too high! He didn't understand that his spa was making him money, regardless of the overhead percentage. By closing the spa, he would have traded a tidy profit of 20 cents on the dollar for zero cents on the dollar.

That's why you have to be careful when using percentage as a yardstick of your overhead. Overhead percentage doesn't reflect overhead; it reflects the ratio of overhead to revenue. Without looking at the numbers themselves, both revenue and overhead, you can get a distorted view.

Let's compare two hypothetical dermatology practices: One is primarily medical and the other is surgical. The medical practice has an overhead percentage of 60% and the surgical practice 40%, but in real dollars, their overheads are exactly the same. How can that be? Is one more efficient than the other? No, the difference is in total revenue; the surgical practice generates substantially higher gross receipts than does the medical practice. When the revenue goes up, the overhead percentage drops, even though the overhead in real dollars is the same. Once again, would you rather keep 60% of $800,000 or 40% of $2 million?

Don't get me wrong. Overhead is not something you should ignore, but neither should you obsess over it on a regular basis. You would be far better off seeing patients with that time. The incremental cost of seeing an additional patient is almost zero, and the revenue is almost pure profit, since you've already paid your overhead.

Concentrate on finding new ways to increase revenue or expand your practice, and your overhead will take care of itself.

I get a lot of questions and complaints from physicians about overhead. How should I define it? How do I calculate it? And, of course, how do I lower it?

Many physicians are surprised when I tell them that lowering their overhead isn't necessarily a good thing. In fact, it may be too low already.

Numerous studies have shown that practices with higher overhead generally produce higher net incomes for their physicians. The money has to be judiciously spent, of course, but keeping overhead costs too low can be counterproductive.

Too much cutting of operating expenses may be costing you revenue. Insufficient office space or too few staff may be crimping the office's efficiency and reducing the number of patients that can be seen.

Overhead is generally defined as the expense of maintaining your practice, not including depreciation, and is usually calculated first as an absolute number, then as total expenses as a percentage of total gross income. The percentage figure can be misleading, however.

If you're trying to decide whether your overhead is too high or too low, you'll need an itemized breakdown. That will require some “billable hours” from your accountant, but those hours will pay for themselves many times over because the itemization will allow you to see where you could be spending less and where you could be spending more.

It's important to understand that overhead is not always the enemy. It is an easy target because everyone can focus on it—and look for ways to decrease it. Compulsive attention to it, however, is often a sign that more important aspects of the practice are being neglected.

Consider revenue, for example. More often than not, it is better to increase gross receipts than to decrease overhead. As a famous businessman once told me, “Your ability to cut costs is limited, but your ability to increase revenue is unlimited.”

Negotiate better contracts with third-party payers. Improve collections, possibly with the credit card system I've discussed in several recent columns. Learn to code better and train your staff to do so as well. Use your time more efficiently. Don't worry so much about overhead. Would you rather keep 60% of $800,000 or 40% of $2 million?

I recently spoke with a prominent cosmetic dermatologist in New York City whose spa was bringing in a steady $1 million per year in revenue, but with 80% overhead. He was talking about closing it down because the overhead was too high! He didn't understand that his spa was making him money, regardless of the overhead percentage. By closing the spa, he would have traded a tidy profit of 20 cents on the dollar for zero cents on the dollar.

That's why you have to be careful when using percentage as a yardstick of your overhead. Overhead percentage doesn't reflect overhead; it reflects the ratio of overhead to revenue. Without looking at the numbers themselves, both revenue and overhead, you can get a distorted view.

Let's compare two hypothetical dermatology practices: One is primarily medical and the other is surgical. The medical practice has an overhead percentage of 60% and the surgical practice 40%, but in real dollars, their overheads are exactly the same. How can that be? Is one more efficient than the other? No, the difference is in total revenue; the surgical practice generates substantially higher gross receipts than does the medical practice. When the revenue goes up, the overhead percentage drops, even though the overhead in real dollars is the same. Once again, would you rather keep 60% of $800,000 or 40% of $2 million?

Don't get me wrong. Overhead is not something you should ignore, but neither should you obsess over it on a regular basis. You would be far better off seeing patients with that time. The incremental cost of seeing an additional patient is almost zero, and the revenue is almost pure profit, since you've already paid your overhead.

Concentrate on finding new ways to increase revenue or expand your practice, and your overhead will take care of itself.

I get a lot of questions and complaints from physicians about overhead. How should I define it? How do I calculate it? And, of course, how do I lower it?

Many physicians are surprised when I tell them that lowering their overhead isn't necessarily a good thing. In fact, it may be too low already.

Numerous studies have shown that practices with higher overhead generally produce higher net incomes for their physicians. The money has to be judiciously spent, of course, but keeping overhead costs too low can be counterproductive.

Too much cutting of operating expenses may be costing you revenue. Insufficient office space or too few staff may be crimping the office's efficiency and reducing the number of patients that can be seen.

Overhead is generally defined as the expense of maintaining your practice, not including depreciation, and is usually calculated first as an absolute number, then as total expenses as a percentage of total gross income. The percentage figure can be misleading, however.

If you're trying to decide whether your overhead is too high or too low, you'll need an itemized breakdown. That will require some “billable hours” from your accountant, but those hours will pay for themselves many times over because the itemization will allow you to see where you could be spending less and where you could be spending more.

It's important to understand that overhead is not always the enemy. It is an easy target because everyone can focus on it—and look for ways to decrease it. Compulsive attention to it, however, is often a sign that more important aspects of the practice are being neglected.

Consider revenue, for example. More often than not, it is better to increase gross receipts than to decrease overhead. As a famous businessman once told me, “Your ability to cut costs is limited, but your ability to increase revenue is unlimited.”

Negotiate better contracts with third-party payers. Improve collections, possibly with the credit card system I've discussed in several recent columns. Learn to code better and train your staff to do so as well. Use your time more efficiently. Don't worry so much about overhead. Would you rather keep 60% of $800,000 or 40% of $2 million?

I recently spoke with a prominent cosmetic dermatologist in New York City whose spa was bringing in a steady $1 million per year in revenue, but with 80% overhead. He was talking about closing it down because the overhead was too high! He didn't understand that his spa was making him money, regardless of the overhead percentage. By closing the spa, he would have traded a tidy profit of 20 cents on the dollar for zero cents on the dollar.

That's why you have to be careful when using percentage as a yardstick of your overhead. Overhead percentage doesn't reflect overhead; it reflects the ratio of overhead to revenue. Without looking at the numbers themselves, both revenue and overhead, you can get a distorted view.

Let's compare two hypothetical dermatology practices: One is primarily medical and the other is surgical. The medical practice has an overhead percentage of 60% and the surgical practice 40%, but in real dollars, their overheads are exactly the same. How can that be? Is one more efficient than the other? No, the difference is in total revenue; the surgical practice generates substantially higher gross receipts than does the medical practice. When the revenue goes up, the overhead percentage drops, even though the overhead in real dollars is the same. Once again, would you rather keep 60% of $800,000 or 40% of $2 million?

Don't get me wrong. Overhead is not something you should ignore, but neither should you obsess over it on a regular basis. You would be far better off seeing patients with that time. The incremental cost of seeing an additional patient is almost zero, and the revenue is almost pure profit, since you've already paid your overhead.

Concentrate on finding new ways to increase revenue or expand your practice, and your overhead will take care of itself.

This is the second column to expand on the suggestions made in my January “New Year's Resolutions” column.

The suggestion on long-range financial planning generated a lot of feedback. It seems that many readers are concerned that all aspects of their finances might not be in the best possible shape, and several shared unsatisfactory experiences with financial planners.

Believe me, I've been there. The problem, as so many of us have learned the hard way, is that anyone can claim to be a financial planner. There are no officially sanctioned requirements, and there is no government agency to regulate them.

Of the estimated quarter-million people who call themselves financial planners, only a small percentage have any real training, qualifications, or expertise in financial matters. Most are just salespeople whose priority is to sell you financial instruments. Creating a plan consistent with your long-term investment and retirement goals is secondary.

Many have an annoying habit of “churning” accounts: buying and selling frequently to generate commissions and service charges for themselves, claiming they can “beat the market” (at the expense of the value of your portfolio).

Many of them know little or nothing about investing beyond the investments their employers tell them to sell, which may or may not be what you need. Ask about alternatives and you'll get a blank stare.

One solution is to hire a fee-only planner who will charge you a flat fee for his or her services rather than take a commission on everything you buy or sell. In addition to removing the obvious conflict of interest, fee-only planners tend to have more extensive training in a broad range of financial fields. Their role is that of adviser, helping you choose the instruments most consistent with your needs and goals.

You can find a fee-only planner by asking friends and colleagues for referrals, or by consulting one of several trade organizations. The National Association of Personal Financial Advisors www.napfa.org

Never hire an adviser who solicits you. Good fee-only planners are rare and busy, and they never have the time or need to make cold calls.

As with anyone else you hire, always ask for references and check qualifications and credentials. At the very least, an adviser should hold one of the three legitimate credentials of the industry: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Personal Financial Specialist (PFS). None of these designations, however, carries a guarantee of adequate experience or education.

Ask to see the planner's ADV form, parts I and II. This document, which must be filed with the Securities and Exchange Commission, outlines the adviser's compensation, whether by commissions or straight fees. (Be sure you are not dealing with one of the few shifty advisers who accept both.) It also details disciplinary actions, if any. Be immediately wary of any adviser who does not freely offer this form upon request.

Once you've chosen an adviser, keep a close watch on the plan being built on your behalf. Make sure the investments are conservative and varied, not concentrated on a few of the adviser's favorites or the financial flavor of the week.

Your planner should be able to converse intelligently about alternatives to his or her recommendations. An adviser who can't or won't do so is lazy, or letting ego interfere with responsibility, and may need to be replaced.

Good financial planners keep their clients well diversified and they make sure that other aspects of clients' finances—budgets, credit ratings, insurance coverage, tax situations, education funds, estate plans, and retirement accounts—are in the best shape possible.

And unlike advisers-cum-salespeople trying to generate extra income for themselves, they won't try to convince you that you can amass a fortune quickly or easily.

This is the second column to expand on the suggestions made in my January “New Year's Resolutions” column.

The suggestion on long-range financial planning generated a lot of feedback. It seems that many readers are concerned that all aspects of their finances might not be in the best possible shape, and several shared unsatisfactory experiences with financial planners.

Believe me, I've been there. The problem, as so many of us have learned the hard way, is that anyone can claim to be a financial planner. There are no officially sanctioned requirements, and there is no government agency to regulate them.

Of the estimated quarter-million people who call themselves financial planners, only a small percentage have any real training, qualifications, or expertise in financial matters. Most are just salespeople whose priority is to sell you financial instruments. Creating a plan consistent with your long-term investment and retirement goals is secondary.

Many have an annoying habit of “churning” accounts: buying and selling frequently to generate commissions and service charges for themselves, claiming they can “beat the market” (at the expense of the value of your portfolio).

Many of them know little or nothing about investing beyond the investments their employers tell them to sell, which may or may not be what you need. Ask about alternatives and you'll get a blank stare.

One solution is to hire a fee-only planner who will charge you a flat fee for his or her services rather than take a commission on everything you buy or sell. In addition to removing the obvious conflict of interest, fee-only planners tend to have more extensive training in a broad range of financial fields. Their role is that of adviser, helping you choose the instruments most consistent with your needs and goals.

You can find a fee-only planner by asking friends and colleagues for referrals, or by consulting one of several trade organizations. The National Association of Personal Financial Advisors www.napfa.org

Never hire an adviser who solicits you. Good fee-only planners are rare and busy, and they never have the time or need to make cold calls.

As with anyone else you hire, always ask for references and check qualifications and credentials. At the very least, an adviser should hold one of the three legitimate credentials of the industry: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Personal Financial Specialist (PFS). None of these designations, however, carries a guarantee of adequate experience or education.

Ask to see the planner's ADV form, parts I and II. This document, which must be filed with the Securities and Exchange Commission, outlines the adviser's compensation, whether by commissions or straight fees. (Be sure you are not dealing with one of the few shifty advisers who accept both.) It also details disciplinary actions, if any. Be immediately wary of any adviser who does not freely offer this form upon request.

Once you've chosen an adviser, keep a close watch on the plan being built on your behalf. Make sure the investments are conservative and varied, not concentrated on a few of the adviser's favorites or the financial flavor of the week.

Your planner should be able to converse intelligently about alternatives to his or her recommendations. An adviser who can't or won't do so is lazy, or letting ego interfere with responsibility, and may need to be replaced.

Good financial planners keep their clients well diversified and they make sure that other aspects of clients' finances—budgets, credit ratings, insurance coverage, tax situations, education funds, estate plans, and retirement accounts—are in the best shape possible.

And unlike advisers-cum-salespeople trying to generate extra income for themselves, they won't try to convince you that you can amass a fortune quickly or easily.

This is the second column to expand on the suggestions made in my January “New Year's Resolutions” column.

The suggestion on long-range financial planning generated a lot of feedback. It seems that many readers are concerned that all aspects of their finances might not be in the best possible shape, and several shared unsatisfactory experiences with financial planners.

Believe me, I've been there. The problem, as so many of us have learned the hard way, is that anyone can claim to be a financial planner. There are no officially sanctioned requirements, and there is no government agency to regulate them.

Of the estimated quarter-million people who call themselves financial planners, only a small percentage have any real training, qualifications, or expertise in financial matters. Most are just salespeople whose priority is to sell you financial instruments. Creating a plan consistent with your long-term investment and retirement goals is secondary.

Many have an annoying habit of “churning” accounts: buying and selling frequently to generate commissions and service charges for themselves, claiming they can “beat the market” (at the expense of the value of your portfolio).

Many of them know little or nothing about investing beyond the investments their employers tell them to sell, which may or may not be what you need. Ask about alternatives and you'll get a blank stare.

One solution is to hire a fee-only planner who will charge you a flat fee for his or her services rather than take a commission on everything you buy or sell. In addition to removing the obvious conflict of interest, fee-only planners tend to have more extensive training in a broad range of financial fields. Their role is that of adviser, helping you choose the instruments most consistent with your needs and goals.

You can find a fee-only planner by asking friends and colleagues for referrals, or by consulting one of several trade organizations. The National Association of Personal Financial Advisors www.napfa.org

Never hire an adviser who solicits you. Good fee-only planners are rare and busy, and they never have the time or need to make cold calls.

As with anyone else you hire, always ask for references and check qualifications and credentials. At the very least, an adviser should hold one of the three legitimate credentials of the industry: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Personal Financial Specialist (PFS). None of these designations, however, carries a guarantee of adequate experience or education.

Ask to see the planner's ADV form, parts I and II. This document, which must be filed with the Securities and Exchange Commission, outlines the adviser's compensation, whether by commissions or straight fees. (Be sure you are not dealing with one of the few shifty advisers who accept both.) It also details disciplinary actions, if any. Be immediately wary of any adviser who does not freely offer this form upon request.

Once you've chosen an adviser, keep a close watch on the plan being built on your behalf. Make sure the investments are conservative and varied, not concentrated on a few of the adviser's favorites or the financial flavor of the week.

Your planner should be able to converse intelligently about alternatives to his or her recommendations. An adviser who can't or won't do so is lazy, or letting ego interfere with responsibility, and may need to be replaced.

Good financial planners keep their clients well diversified and they make sure that other aspects of clients' finances—budgets, credit ratings, insurance coverage, tax situations, education funds, estate plans, and retirement accounts—are in the best shape possible.

And unlike advisers-cum-salespeople trying to generate extra income for themselves, they won't try to convince you that you can amass a fortune quickly or easily.

[email protected]

Everybody, it seems, thinks they have too many samples, but you really don't. What you have is too much packaging.

If you doubt this, take a good look at the next set of samples that comes into your office. Each unit will probably consist of a big box or card, and somewhere within its depths, amid all the wasted space, will be a single tablet or 3-g tube.

All that space-wasting packaging is purposeful, of course. Bigger is better, after all, from a promotional standpoint. Bigger packages are more likely to be noticed, and there's more room for advertising. The marketing people figure that if they use up all of your available sample space, you won't have room for their competition.

As a result, you probably have sample packages taking up two or three closets' worth of expensive square footage—with the samples themselves occupying perhaps 5% of that space or less.

Not only that, but each time you need a particular sample, somebody has to go hunting for it. Sometimes you find it, sometimes you don't. And when you do, there's a fair chance it's expired. It's a waste of time, space, and energy, and it's not necessary.

Here's what you do: Create a “parts-bin system” for your samples.

Have a carpenter build some shelving in a central area of the office. Stock those shelves with cardboard or plastic parts bins, which are available in a variety of lengths, widths, shapes, and colors from many different sources. Three online examples are www.anytimeproducts.comwww.papermart.comwww.lkgoodwin.com

As samples come in, ask the representative who brings them to strip off all the space-wasting packaging, leaving only the tablet bubble-pack cards or the 3-g tubes. You'll be amazed at how much less space they take up. Store them in the bins, and arrange the bins on your shelving by whatever organizational system you fancy. We do it alphabetically.

You'll always know what samples you have, what you're out of, and what's close to its expiration date. You and your staff will waste far less time searching for the samples you want, and you can use all that freed-up sample space for something far more likely to generate revenue for your office.

A parts-bin system could be an even bigger boon to your office if the Food and Drug Administration ever makes good on its recurrent promise to require written paper trails for all samples entering and leaving a facility. Periodic inventories, as well as logging samples in and out, will be far easier with my system.

While you're organizing your samples, organize your pharmaceutical reps too. Many offices allow representatives to come and go as they please, and too many physicians, physician assistants, and nurse practitioners are all too willing to stop and chat with them, which disrupts efficient office flow. And if multiple reps show up in a single day, the chaos just multiplies.

Have your reps make appointments, just as your patients do. We allow only one rep appointment per day—during the lunch break, 10 minutes before the start of afternoon hours. That prevents disruption of the schedule, and it prevents me from chatting too long (which I have a tendency to do).

We also encourage reps not to make appointments at all unless they have something of significance to communicate. I'm happy to speak with reps, but not when all they have to offer is small talk.

[email protected]

Everybody, it seems, thinks they have too many samples, but you really don't. What you have is too much packaging.

If you doubt this, take a good look at the next set of samples that comes into your office. Each unit will probably consist of a big box or card, and somewhere within its depths, amid all the wasted space, will be a single tablet or 3-g tube.

All that space-wasting packaging is purposeful, of course. Bigger is better, after all, from a promotional standpoint. Bigger packages are more likely to be noticed, and there's more room for advertising. The marketing people figure that if they use up all of your available sample space, you won't have room for their competition.

As a result, you probably have sample packages taking up two or three closets' worth of expensive square footage—with the samples themselves occupying perhaps 5% of that space or less.

Not only that, but each time you need a particular sample, somebody has to go hunting for it. Sometimes you find it, sometimes you don't. And when you do, there's a fair chance it's expired. It's a waste of time, space, and energy, and it's not necessary.

Here's what you do: Create a “parts-bin system” for your samples.

Have a carpenter build some shelving in a central area of the office. Stock those shelves with cardboard or plastic parts bins, which are available in a variety of lengths, widths, shapes, and colors from many different sources. Three online examples are www.anytimeproducts.comwww.papermart.comwww.lkgoodwin.com

As samples come in, ask the representative who brings them to strip off all the space-wasting packaging, leaving only the tablet bubble-pack cards or the 3-g tubes. You'll be amazed at how much less space they take up. Store them in the bins, and arrange the bins on your shelving by whatever organizational system you fancy. We do it alphabetically.

You'll always know what samples you have, what you're out of, and what's close to its expiration date. You and your staff will waste far less time searching for the samples you want, and you can use all that freed-up sample space for something far more likely to generate revenue for your office.

A parts-bin system could be an even bigger boon to your office if the Food and Drug Administration ever makes good on its recurrent promise to require written paper trails for all samples entering and leaving a facility. Periodic inventories, as well as logging samples in and out, will be far easier with my system.

While you're organizing your samples, organize your pharmaceutical reps too. Many offices allow representatives to come and go as they please, and too many physicians, physician assistants, and nurse practitioners are all too willing to stop and chat with them, which disrupts efficient office flow. And if multiple reps show up in a single day, the chaos just multiplies.

Have your reps make appointments, just as your patients do. We allow only one rep appointment per day—during the lunch break, 10 minutes before the start of afternoon hours. That prevents disruption of the schedule, and it prevents me from chatting too long (which I have a tendency to do).

We also encourage reps not to make appointments at all unless they have something of significance to communicate. I'm happy to speak with reps, but not when all they have to offer is small talk.

[email protected]

Everybody, it seems, thinks they have too many samples, but you really don't. What you have is too much packaging.

If you doubt this, take a good look at the next set of samples that comes into your office. Each unit will probably consist of a big box or card, and somewhere within its depths, amid all the wasted space, will be a single tablet or 3-g tube.

All that space-wasting packaging is purposeful, of course. Bigger is better, after all, from a promotional standpoint. Bigger packages are more likely to be noticed, and there's more room for advertising. The marketing people figure that if they use up all of your available sample space, you won't have room for their competition.

As a result, you probably have sample packages taking up two or three closets' worth of expensive square footage—with the samples themselves occupying perhaps 5% of that space or less.

Not only that, but each time you need a particular sample, somebody has to go hunting for it. Sometimes you find it, sometimes you don't. And when you do, there's a fair chance it's expired. It's a waste of time, space, and energy, and it's not necessary.

Here's what you do: Create a “parts-bin system” for your samples.

Have a carpenter build some shelving in a central area of the office. Stock those shelves with cardboard or plastic parts bins, which are available in a variety of lengths, widths, shapes, and colors from many different sources. Three online examples are www.anytimeproducts.comwww.papermart.comwww.lkgoodwin.com

As samples come in, ask the representative who brings them to strip off all the space-wasting packaging, leaving only the tablet bubble-pack cards or the 3-g tubes. You'll be amazed at how much less space they take up. Store them in the bins, and arrange the bins on your shelving by whatever organizational system you fancy. We do it alphabetically.

You'll always know what samples you have, what you're out of, and what's close to its expiration date. You and your staff will waste far less time searching for the samples you want, and you can use all that freed-up sample space for something far more likely to generate revenue for your office.

A parts-bin system could be an even bigger boon to your office if the Food and Drug Administration ever makes good on its recurrent promise to require written paper trails for all samples entering and leaving a facility. Periodic inventories, as well as logging samples in and out, will be far easier with my system.

While you're organizing your samples, organize your pharmaceutical reps too. Many offices allow representatives to come and go as they please, and too many physicians, physician assistants, and nurse practitioners are all too willing to stop and chat with them, which disrupts efficient office flow. And if multiple reps show up in a single day, the chaos just multiplies.

Have your reps make appointments, just as your patients do. We allow only one rep appointment per day—during the lunch break, 10 minutes before the start of afternoon hours. That prevents disruption of the schedule, and it prevents me from chatting too long (which I have a tendency to do).

We also encourage reps not to make appointments at all unless they have something of significance to communicate. I'm happy to speak with reps, but not when all they have to offer is small talk.