It’s no secret that Advanced Practice Providers like PAs and NPs are valuable assets to many dermatology practices. In many cases a single full time APP can generate annual revenue similar to a physician associate, ranging between $650,000 to more than $1M. APPs often have their own patient book, assist Mohs surgeons, help with administrative or management responsibilities, or in some cases are the sole provider in a satellite office. Despite the revenue value and non-revenue value an APP brings to a practice, few APPs are included in financial discussions or decision making, have any equity ownership, or are have a sense of “partnership” within their practice.
With COVID-19 affecting so many dermatologists’ practices, many APPs have been furloughed or laid off completely. They are unsure if, or when, they will see their next paycheck. Behind the scenes, many practice owners are experiencing the same uncertainty and are busy applying for PPP loans, grants, and other small business loans and working with their accountant on a plan to keep the practice afloat. In many instances, the practice owner who laid off their valuable APP has full intention of rehiring that person as soon as the patient activity can support an additional provider. What many practice owners don’t realize is that their APP might not be waiting for the green light before they have already applied for a new job, or been hired, to work for someone else.
Communication is the key to success for all businesses, and dermatology practices are no different. There are some communication fundamentals to consider for practices who want to retain their APP team and not be caught off guard when their patient schedule is ramping back up and all of a sudden they no longer have any providers to see their patients. This situation could put practice owners in a predicament of losing much-needed revenue or having to pay high fees to staffing agencies and rushing to hire the first person they can find, even if the candidate’s qualifications are subpar.
What to Do
There are ways to avoid this situation and confidently retain your APP during the COVID19 pandemic.
1 Bi-Weekly Team Zoom Meetings. Have a plan. Determine an objective data point that triggers re-hiring your APP. What quantity of daily patients will support the APP coming back to work? Be transparent with that number to your APP. Everyone knows that COVID-19 will affect each city and state differently, so determine an objective number of patients a day that will support your APP coming back to work and let him/her know what that number is so that you can check in a couple of times per week with a status update and try to predict the timing of the rehiring process. This makes the rehiring process objective and gives everyone a data point to watch, allowing predictions and a sense of control to both sides of the discussion.
2 Be transparent about big picture finances. Be transparent about PPP loan and grant applications. Let your APP know if you anticipate a salary change or reduction at the end of the eight-week PPP loan period if patient volume has not recovered. As a business owner, you can anticipate the runway of cash, and staff will appreciate being able to plan their personal finances rather than being caught off guard. A simple financial overview update every month that informs key providers of the sustainability of the practice can go a long way to ease anxiety of the unknown and allow APPs to take control of their personal financial plan to align with their potential income swings in coming months.
3 Adapt creatively. Get creative with salary adjustments. If patient volume does not return to pre-COVID-19 volume within a few months, many practices will be in a position to reduce all expenses, including APP salaries. This basic business concept will need to be explained to some staff; a business with less money coming in means that less money can go out. Reassure your APP that this situation is temporary and as patient volume increases so will his/her salary.
Make sure to create a win-win salary structure, especially if you are asking your APP to make significant sacrifices. Offer some upside as patient volume returns back to what it was prior to the pandemic. Let your APP know that you appreciate her/him being a team player and you value them enough that you will make sure that their income is higher than it was originally once their patient volume is back to a pre-pandemic level.
This pandemic has put practices in a fluid state; explain that concept and that salaries might be affected up or down until patient volume becomes predictable again. Align salaries to revenue to make income and expenses predictable to both parties.
4 Consider stock or equity. This may be a time to consider stock or equity options for APPs. Many physician associates have the option to partner in some capacity with their practice, but this option is relatively rare for APPs. APPs are learning more about equity options and are becoming more passionate about having some “skin in the game.” During stressful and uncertain times, employees will tend to be more loyal if they feel some sense of ownership. There are simple ways to provide some stock or equity to loyal and valuable team members. A small amount of equity or stock option won’t have much cost or impact to the business and can go a long way when asking a loyal and productive APP to ride out the storm with you rather than risk them exploring employment elsewhere.
5 Be open to ideas. Encourage and welcome ideas from your APP. APPs have a lot of creative ideas, have colleagues who are business owners, and have a large community of peers from whom to gather innovative information and outside ideas. Many APPs welcome the opportunity to help brainstorm solutions to new emerging challenges in their practices. Some APPs are even excited to take the lead with new projects or protocols around telemed implementation or management, In Office Safety Protocol Management, New Patient Communication Methods, etc.
Meet regularly with your APP and ask him/her if he/she has any ideas for some of the new challenges and brainstorm as a team how to implement new ideas. Teach some basic business fundamentals to those APPs who need that foundation and allow them to step up to more of a formal leadership role within the practice if they show interest to get more involved.
A Team Approach
These are challenging times for dermatology practices. Closing the doors temporarily and now opening in a city or state where patients are still fearful to leave their homes will prove to be an ongoing challenge for months to come. Retaining productive APP team members will be vital to many practices, will allow patients to feel more comfortable to come back to the office, will allow revenue to ramp back up, and will save expensive staffing agency fees if you are caught off guard. The last thing any practice owner wants as they ramp back up is to call their long-time loyal APP to invite them to come back to work only to find that they have already secured a job with someone else. This is a unique time in history and savvy business owners will be transparent with valued staff, build a new level of trust, and create a more efficient team environment that positions the practice to acheive much greater heights than ever before when this is all over.