3 Practice Management Pitfalls Plastic Surgeons Must Avoid

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Announcer
You're listening to the Aesthetically Speaking podcast presented by Nextech.

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Robin Ntoh
Welcome to the Nextech podcast. I'm Robin Ntoh, and I am your host today. And we have a very special guest, a plastic surgeon from the Washington, D.C. area, Doctor Steven Davison. Doctor Davison, I am so pleased to have you on the show today. And one of the things that I love about your expertise and background is that it's broad and it goes deep.

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Robin Ntoh
So let's share with our listeners a little bit about your credentialing and a little bit more about your practice to give them a high level overview.

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Steven Davison
So I've been in practice since 1999. The first nine years was a as a full academic attending a Georgetown University under Scott Speer. And then in 2008, Robin who is a very close friend and associate of mine, helped transition my practice into private practice in Washington, D.C. I have a hybrid operation which is involves both reconstructive and cosmetic surgery.

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Steven Davison
The full range of plastic surgery, with the exception of really hand and craniofacial. My background is I'm a dentist, a dental specialist in head neck reconstruction. I'm ENT and plastic surgery, triple boarded in anti facial plastics and plastic surgery.

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Robin Ntoh
And because you didn't really think you'd done enough because you're such an underachiever, you decided to get your MBA as well.

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Steven Davison
I did do my MBA and a John Hopkins and a physician cohort, which was really kind of an excellent opportunity to both learn the language of business and really broaden my interests in, in to the business of medicine, which has always been a kind of caveat that I've enjoyed.

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Robin Ntoh
As it gives you an interesting perspective. So much for us to dig into it. So I think it kind of ties back into the topic today, which is really around just trying to be a successful plastic surgeon, and there's so many components to it. And let's start with you've got a lot going on in your practice. You your day is to see patients and to do surgery.

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Robin Ntoh
But you're running a business. You're running a business. How do you manage all of this?

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Steven Davison
I think the first question you have to ask yourself is, do you want to manage that? Right. And you need to do an internal inventory. You really need to ask yourself. Do you have the skill sets? Do you have the interest? Is this what you want to do on a Sunday morning? You know, in October 13th? Do you want to be reviewing the the K1s?

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Steven Davison
Do you want to be looking over the profit and loss for the practice? Because you're probably talking to run a practice for nonrenewable time 5 to 10 hours a week, minimum, minimum. And and that's that's if you're organized, if you're established and you're not learning it every day.

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Robin Ntoh
That's a lot to manage. Now you also have to think about the growth of your business while you're trying to manage the day to day and thinking about the what's next when you're trying to manage the business, you've got the staffing part. Let's talk about just the staffing part for a second.

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Steven Davison
You said “just” but to my mind, and particularly in plastic surgery, which is a it's really a connection industry, right? I mean, we sort of think of it as a technical industry where we're doing things for people, but that's not really what it is. It's really a relationships industry. You've got to have very positive relationships within your own practice.

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Steven Davison
Everybody inherently knows when those one toxic individual on the team, or there's breakdown in the environment, which begins to affect everything. So the management of people is really the most difficult thing. And I and I think managing the practice it and it's more difficult now because of the competitiveness from all the other.

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Steven Davison
Essentially sort of commercial medicine. So many, many spa's other specialties, other doctors delving into things which were historically plastic surgeries, domain, you know, dentists doing the Botox. So now you have competition, not just external market competition, but you've got competition for your staff. And and there's no more acute environment than that than or personnel right now, particularly a well-trained, experienced own nurse.

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Steven Davison
They have the ability to move around almost anywhere and be picked up with a bidding war at any opportunity. You not only have a problem of staffing and filling positions, but the fact that at any time your key individuals can be poached.

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Robin Ntoh
Well, it goes into my next question. So you've got if you have staff turnover or when you do have staff that either they move away and they were in a good relationship. You have a unique type of build around your staff. One of the things that was put in place in your practice was, you know, you bring in these pre-med students, which is, you know, unique way of thinking about how you foster them, grow them.

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Robin Ntoh
I think you said you have 45 that are in medical school at this point since you've launched this program.

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Steven Davison
Yes. And four of them are either in plastic surgery training or just finishing microvascular fellowships. So our our program where I take pre-med students and use them as the core of my Ma staff, has really been a great way to both pay it forward and staff with really bright people. The only problem is, is they have a lifespan on average of 11 to 13 months.

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Steven Davison
But the good news is, is that they can be trained in 3 to 4 weeks. And so it's a trade of turnover versus competence.

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Robin Ntoh
Generally they've got a quick study that's there. They learn quickly. They want to do this because it builds a skill set for them that eventually is going to be part of what they would do someday. You know, whether it's plastic surgery or something else. But is there a playbook that you have put in place to transition? So you've got them from 11 to 13 months?

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Robin Ntoh
Have you found the right way to really make that transition seamless at 11-12 or month 13?

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Steven Davison
The group that do get into medical school and most do like this year, probably three out of three out of 4 or 3 out of five will go into medical school. Out of the practice is that they have to be trained essentially by the veteran. Now, what I have found that the, the, the the individual who's leaving is not the individual to train you because they have short term as attitude.

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Steven Davison
What is much better is, is if one stays in medical school in Washington, D.C., that's the ideal trainer. So we have overlap where we have right now. I have one of the Emma's. She's a second year at GW. She does the training because her commitment is greater, her longevity is greater, her institutional knowledge is greater. That's how I solved that.

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Robin Ntoh
So the key here is you need to make sure at least one of them goes to medical school. And your region.

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Steven Davison
And my region. Yes. And and that is not without a certain amount of commitment and lobbying.

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Robin Ntoh
I'm sure it is. But you've done a great job in that arena. But let's talk about systems. So we've talked about people. Those people, once you get the right people and this is something else that you have to think about and you have to manage now you need the right processes and systems. What tips or tricks would you share that have been ideal in you managing different components of your business, whether it's staff or something else?

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Steven Davison
So one one that comes to mind right away is to avoid operating room cancellations, right? Okay. You want to have a system in place in which your cancellation rate or your no show rate, either for reconstructive surgery or for cosmetic surgery is absolutely minimal. I mean, it really should be like under 2 or 3%. I mean, it should in a successful practice, it should be really nothing.

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Steven Davison
So one thing to do that is make sure your policies for collecting pre-pay fee for service are well-established. Make sure that you know your staff adhere to those collection dates. And second, I think a pre-op appointment with a nurse for medical clearance and training two weeks before any surgery has really reduced that for us.

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Robin Ntoh
You probably seen a lot of things that surgeons thought they were doing right, or things that may have been the right process, or they, for whatever reason, where do they think is right? But you've seen where it goes terribly wrong.

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Steven Davison
Yeah, I can categorize the, the, the Punjabi, you know, pit problems that people get into, one out of field surgery. And a classic example would be, you know, a facial plastic surgeon retires from his practice, moves to a retirement type place, decides that he wants to pick up a little extra work at Sono Bello and stops doing full body liposuction.

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Steven Davison
And and their experience is not that great in it and is up being a perforation, you know, but that that that that that's a problem. Next is ignoring medical clearance and or risk assessment models for things like PE and DTS, in the interest of getting somebody on the schedule too quickly that that that I would say the second thing, the third thing that I see is the move towards domestic tourism.

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Steven Davison
When you think of medical tourism, of like patients going to say, El Salvador or going to Mexico and having surgery done. But that's what I call macro tourism. You also have micro tourism where you're where you're you're going from New York to Miami to get your Brazilian but lifts. But then you're returning to New York with no follow up care.

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Steven Davison
You've got no there's no connection. No one knows anybody, you know, being sent for. And you have problems in New York. So that's now what I call micro tourism. And then the third area is what I call turf tourism, where, you know, a your abdominal plastic is being done by the Gyn when they do the C-section. That's that's turf tourism, right.

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Robin Ntoh
Oh my goodness.

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Steven Davison
Right. But these things happen and I see these all the time. And those are the three buckets that the problems fall into is inadequate post-operative care because of turf of tourism. Second, not paying attention to the medical clearances based on economic factors, particularly scheduling. And third, out of field surgery.

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Robin Ntoh
You've got some type processes. You're you're really focused in and honed in and you're you're using your data. You've got the metrics, you're using your data, you're understanding your business. Where do practices in your opinion, you've seen a lot of this. Where do practices not listen to the data? Where do you think there's the biggest opportunity when you think about I mean, you mentioned just the cancellation.

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Robin Ntoh
That is key. But where else do you see practices miss?

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Steven Davison
A good example of that would be we lose money on every patient, but we make it up on volume. You know, there's certain there's certain aspects of of my practice that, you know, we already know that are a loss leader, like a, a reconstructive breast reduction is, is is definitely a loss leader now. Right. But on the on the on the flip side, if you do that work then you indie yourself to that that patients mother who then may come in for a facelift.

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Steven Davison
It's it's it's becoming well known in the community as having a reputation for providing care that's appropriate. But you can't possibly make a living doing insurance breast reductions.

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Robin Ntoh
No, not at all.

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Steven Davison
The next thing would be product price control. Now, you don't want to get into a bidding war in terms of constantly lowering the price of your Botox and filler appointments or your your, your injections, because every medical spa around you is running a constant special right eye to to my to my mind, I think one of the important things in the in the Med Spartan filler market is that it's a, it's a relationship.

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Steven Davison
It's sort of like your hairdresser. You want to enjoy that hour with that person and trust that person, not what the cost per unit is. Yeah. Most of the time now, you still take advantage of the, you know, you know, of the Mother's Day special. That's not the same. But you're not changing just on the price point. Another thing that I think is a very important thing, and I've made this mistake multiple times, is that I buy a piece of equipment that delivers some non-surgical.

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Steven Davison
Modality that's supposed to enhance the practice and bring in new revenue. And then I'm selling it. And that annoys the living daylights out of me. And then the minute is paid for, I'm disinterested and we never use it again. But what I found over time is that none of them work unless that's your core market. If you're not doing a lot of laser facial resurfacing, you don't need to buy a laser.

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Steven Davison
It's just not a good economic model, because now you're selling something that is not really your core.

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Robin Ntoh
So you.

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Robin Ntoh
This bridge is nicely into my next question then. So how do you determine when or what new service line you might bring in?

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Steven Davison
I think you first have to start with a motivated, passionate individual who's going to do it other than you. If you don't, if you don't have that, don't do it right. If you don't have if you don't have somebody that's really excited about the idea of doing PRP micro needling, then don't add it right.

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Robin Ntoh
Even if it's got a great demand in the market, for example, like.

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Steven Davison
Well, I well, let's take GLP now. We, we had an opportunity to, to get into the GLP market. We could have done it quite easily, you know, had a pretty good compounding pharmacy. But the problem was that with it is, is that do you have the setup to monitor the patient? Do you have the nurse practitioner or the PA that wants to to to look after them and nurse them through what is, you know, an uncomfortable beginning to the process?

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Steven Davison
And next you really want to be the practice that's now named in a class action suit when it doesn't go well? Not really. I did not want to. And so I made a conscious decision because that's not my core business, right. And I didn't want to be distracted. And more the point. No one in the practice wanted to do it.

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Steven Davison
So it had been just another thing that I was selling that I didn't want to sell.

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Robin Ntoh
And you bring up a good point. You've got to have the team or the staff that are going to be on board with us, and they're going to be supportive of it. And you're part of your core business is you have the surgery is a major core part of it. You build out a beautiful new or and you actually you have contracts where you actually do insurance procedures and there as well, which is an important part of a plastic surgery practice.

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Robin Ntoh
When you think about your business and the management of it. What makes you stay up at night or lose sleep at night?

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Steven Davison
Simple cash flow. Anything you build is going to cost you 2 to 3 times, and that you build is going to have a delay which is outside your control. The, the the individual in Washington, D.C., that licenses medical facilities went on sabbatical for seven months. So we didn't get a license for seven months. Right then. There's no no one else can do it.

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Steven Davison
Like, oh, that would be back, right? Well, you can imagine the carrying costs of seven months for a brand new surgery center. That's a cash flow problem because you're you're anticipating the income from the surgery center to pay its own note, but now you're paying for it with clinical income. So that's cash flow is a problem. Next thing is again, the delays of things like provider contracts.

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Steven Davison
We started doing surgery September of 2024. And we only just got the Blues contracts effective May 1st. So that's right. That gives you a timeline and a delay that it's got nothing to do with you. It doesn't matter how competent you are, how you fill the paperwork out is that the carrying cost and cash flow? You you better have a deep pocket.

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Robin Ntoh
Especially when you're, you know, your core business is surgery.

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Steven Davison
Yeah.

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Robin Ntoh
It's a core business. To that end, you brought on a second surgeon.

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Steven Davison
Yes.

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Robin Ntoh
From a management perspective, what would you tell anybody about that if that's if that's part of where your journey takes you, if you're a surgeon that is going to first, why a second surgeon any way that you would want to position what to think about when you're doing that?

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Steven Davison
I think you have to very carefully think about why you're bringing on another doctor. And is. It a financial dilution of the expenses, because I think you're going to rapidly find that that's not real, that that doesn't work. The expenses go up with the added manpower. They need their own patient care coordinator now there's more laundry. You need a bigger space.

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Steven Davison
I think that that idea of the dilution of the expenses, I have not seen that right. Next social I was 24 over seven 367 on coal. In addition, my wife was the injector in the practice, so for us to go away for a week was a six figure problem because it was all the injectables stopped, the facility stopped, the surgery stopped, the console stopped.

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Steven Davison
So a family vacation started at six figures.

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Robin Ntoh
Before you even left the door, before you even got on the plane.

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Steven Davison
Yeah, before we even packed a bag. It was a multi six figure problem, but now I have a someone to help cover the cost from a social viewpoint to keep the lights on when I'm gone, and then life circumstances change. Sometimes you need a partner to cover you. And I had a bad motor vehicle accident and my partner was there to do the surgery and the practice for a month.

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Steven Davison
Right. I would have I would have gone out of business. So that's a social benefit. Trust in somebody else that you can be away. I mean, I don't look at my phone when I'm here now because I have a partner and a very trustworthy, excellent, competent surgeon. So they will take care of things. She will take care of things when I'm gone.

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Steven Davison
Right.

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Robin Ntoh
Peace of mind.

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Steven Davison
Right then peace of mind. And then the third, the the third angle on it...

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Speaker 4

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Steven Davison
Is exit planning. Right. You've either got two choices. You either sell something out to another doctor or doctors. You sell it out to private equity or you lock the door. Now that blue sky doesn't have any value, and the new generations think that the practice is built more on and they may not be wrong. More on social, social media and exposure than it is on historical, you know, clientele.

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Steven Davison
And that's not a criticism. It's just that's the way that things have changed. You need to have an exit plan, right? Right. And that's why a partner is not a bad problem. I think the hard thing in a partner, having been having had nine partners and no partner, and now one partner is, I think the most difficult partner is the first one.

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Steven Davison
I think the third partner will be easier and the fourth one will be a cinch because the process is for acquisition, for shared expenses, for renewal, for retirement. They will all be in place for this for the next one.

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Robin Ntoh
Right?

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Steven Davison
But the hard, the the most difficult is the first. And I think there's a lot of naivete on both sides of the equation, both on the person taking on the partners and and those that are joining.

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Robin Ntoh
I think that you said something that was important to tease out a lot of practices that go into, you know, they they bring on a partner, fail. And we see a lot of that. We see practices that are doing data splits all the time. They are not really pushing through and getting beyond that point of, okay, there's that honeymoon phase ends very quickly in the first few years are really rocky, but once you can get beyond that and then there's a true partnership that's leveling up, and then you bring on the second one.

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Robin Ntoh
That is when you hope to see where the business really benefits. But I think that people go in and they're short sighted and think that it's going to happen much sooner.

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Steven Davison
Yeah.

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Steven Davison
So I think the the fastest I've ever seen an incredibly busy, busy associate become profitable as a Georgetown peripheral nerve surgeon. No competition, first generation immigrant, paranoid economically. They were they were financially viable in seven months, I would say the average is 24 months. So so that area under the curve is anywhere from seven months to 24 months.

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Steven Davison
And then the period to to pay it back where you are now, adding economic value to the practice, if your salary stayed the same as another two years. So I think that that first four year, it's not until you get to four years are you really stable with that partner. And and that's the hard part. And then when that person makes partner and is is now in a power economic referral sharing type relationship, maybe not complete equity with the with a senior person.

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Steven Davison
I think there's a I think there's six six years minimum, maybe ten before you're ready for the next person. Because the next person that joins always cannibalize is something. And and the hard part is and not going to cannibalize from the most senior person, they're going to cannibalize from the person who came in last. And that's going to make them paranoid.

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Robin Ntoh
So from a business move let's think future five years. Let's let's just do one year. Crystal ball. We know technology is evolving so quickly. It would we would be remiss to not talk about where does AI fit in plastic surgery.

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Steven Davison
I think AI summary to one collate everything. And when I say collate everything, I'm talking about all the information that's available, for instance in medical records. And the next chart is I want to know what quote they picked correlated with the touch MD pictures, and make sure that that's also what was on the consent, so that you're not having those uncomfortable things.

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Steven Davison
Were we supposed to have ordered GalaFLEX but we didn't order the GalaFLEX? Or maybe you got the end of time and not the end of browpexy, you know, and these are sort of like clear examples in my practice. So a summary of of the plan will be helpful. And secondly, what I would really like to see AI doing is real time communication out to the patient of this is what we talked about.

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Steven Davison
This is what my assessment was. This separates me from everybody else you're going to see by next week. And I want, I want that, that that customized letter to go to you real time within like 24 hours. Right.

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Robin Ntoh
Or a great way to think about it though.

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Steven Davison
Right. Because I do letters now to patients summarizing. But I get so far behind on them. But if AI can do those for me by the end of the day now it suits. It fits my practice with technology.

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Robin Ntoh
I think another area in your business is you do insurance procedures. Your partner does a lot. Yes, I think there's opportunity there from an operational perspective.

00;28;28;23 - 00;28;59;15
Steven Davison
Well, right now the the, the practice burden to generate a reconstructive dollar is like completely out of context. You got to have somebody doing pre certifications. You got to have somebody doing the scheduling. You got to do letter of medical necessity. You got to make sure that the you know that the charges weren't denied. You know, the codes were kicked out the precincts.

00;28;59;17 - 00;29;30;03
Steven Davison
If I can sit in a room and literally on a on a piece of white paper, write down what my codes are and what the diagnosis codes are, and have a letter of medical necessity generated for that breast reduction, and have the preset done by the end of the next day, because it's all an automated AI process. You know, I've eliminated, you know, a $70,000 salary for, you know, for, for preset person.

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Steven Davison
And that's where this AI is going to start seeing a return on investment in in a reconstructive practice.

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Robin Ntoh
From the business perspective, you also think about that ten hours that you're spending a week managing your business. It's managing your business, plus being the doctor. Yes.

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Steven Davison
There's one other thing I brought up in terms of reconstructive practices, I brought I brought up today the we're going to get into a renewal death spiral with AI, which what's going to happen here? It's going to be a remuneration death spiral. So the way that Medicare works, Medicare is a.

00;30;16;10 - 00;30;54;29
Steven Davison
A closed financial system. It's X number of dollars tagged to the GDP divided by the number of views which is sent in. So what's going to happen is AI is going to get smart. An AI is going to automatically fill out all the boxes. So every single consultation at every single doctor's office is now a level five, because we're going to take all the boxes and all the criteria, then what that's going to do is the first six months or seven months or nine months will be fine until the next Medicare balance balanced budget.

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Steven Davison
And then what will happen is the reviews will go down and then that medical visit, instead of being worth $159, is only going to be worth 119 because everybody submitted level fives. And medical Medicare is going to say, well, we need to audit everybody because how can they all be level fives? But then the AI is going to have filled in, and it's going to create this death spiral of remuneration for reconstructive visits.

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Robin Ntoh
Yeah. So I think that this is where there's this balance of hype, myth, fear. Where do we where do we see this? And you're right, I think that software can do the wrong thing, which would be the wrong approach. That's going to have a bad outcome if we're not careful.

00;31;42;07 - 00;32;17;14
Steven Davison
I think the other important thing is that. AI scribing and AI data mining in the charts has the has the potential to add vastly too much information into the charts and two types of information one repetitive repeat information that doesn't add anything, which it already does in like a perfect example would be epic. It's impossible to find out in an epic note what happened, right?

00;32;17;15 - 00;32;44;06
Steven Davison
I mean, it's just it's just words. The next problem will be if you use the technology to capture everything in the consultation, there's going to be some things in there that people aren't going to want the notes. Absolutely. Like, you know, you know, you're right. You know, you know, perfect example would be a label of plastic consult. That's not going to be what the patient wants in their right.

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Steven Davison
But, you know, you know, all the euphemisms that you use to get around things or to to be polite and not going to translate that. Well.

00;32;56;05 - 00;33;12;12
Robin Ntoh
No, you're right. It's figuring out what the right information is. So to close this, Alex, if you could give some great advice to your younger self when you first started, what would you say to yourself.

00;33;12;14 - 00;33;45;24
Steven Davison
When you're starting out is you've got to take a personal inventory of what your skills and what your interests are and not do what a mentor did or not go where you're expected to go, but to do the things that really suit you. If you have. If you have no tolerance for numbers and for money, and that stresses you, be an employee, right?

00;33;45;25 - 00;34;12;04
Steven Davison
Right. If you're not a follower and you consider yourself kind of like a pioneer, kind of like, you know, someone that would set out in a red wagon on the Oregon Trail, you may be one of those doctors that still does well in private practice in a solo practice. Right? Right. If you never played a team sport, don't think you're going to do well in a nine man group, right?

00;34;12;05 - 00;34;12;18
Robin Ntoh
Very good.

00;34;12;18 - 00;34;20;19
Steven Davison
Point, but I think you should take a look at yourself before you jump off any cliff.

00;34;20;21 - 00;34;26;18
Robin Ntoh
Now, the words don't just follow a mentor, follow you and be true to you.

00;34;26;19 - 00;34;52;17
Steven Davison
Yes, I, I think you've got to know you, to follow you first. So I take a weekend, take a week, take a month, and maybe take the last two years of your residency to figure out who you like, what you like, where you like, what you're good at, what you're not good at, what stresses you, what doesn't stress you, what fills you with energy, you know?

00;34;52;22 - 00;35;05;02
Steven Davison
Do you want to be a mentor? Do you want to have employees you know, or do you just want to go in and get out because you know, you've got kids to get on the bus, right? Right.

00;35;05;03 - 00;35;11;28
Robin Ntoh
Well, this has been excellent. Thank you so much for joining us today. And I am excited about where this takes us next.

00;35;11;29 - 00;35;31;00
Steven Davison
And thanks to you for such a giving me such a wonderful start. You did the bout the best job anybody could have, from transitioning from an academic to a private practice, and has been nothing but positive and growth since 2008 when you made it happen for me.

00;35;31;07 - 00;35;35;00
Robin Ntoh
Love it. Thank you.

00;35;35;02 - 00;35;57;22
Announcer
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