Minimize the risk of internal theft

The chances are significantly-perhaps surprisingly-better than even that the typical eye-care practice will fall victim to internal theft. That being the case, practice managers need to know how to identify internal theft and how to prevent it from happening in their practices.

Paul White, president of Dynasty Health-care LLC, an Atlanta-based medical consulting firm, discussed the identification and prevention of internal theft in a recent seminar.

"Medical practices experience one of the highest theft rates of all service businesses," he said. "Theft is occurring in 50% to 75% of all medical practices, and 70% to 80% of all physicians will experience some kind of embezzlement in their careers."

According to White, it's because practices tend to have minimal or ineffective financial controls, typically limited staffs make it difficult to segregate financial functions, administrators don't have time to monitor financial controls, and staffs often are granted a high level of trust with little or no oversight by the practice manager. In addition, medical-practice thieves are seldom prosecuted-and savvy wrongdoers know this.

Trust all, monitor all

Internal thieves, White said, often are a practice's most trusted employees.

"More than 50% of thefts are committed by front-office personnel, and 27% are committed by office managers or administrators," he said. "More than 60% of these thieves have never been arrested."

All the more reason a practice manager should have some way of knowing what to look for in terms of identifying a potential internal thief. Certain common characteristics, White said, can serve as red flags signaling the existence of an internal thief. Some of White's red flags to watch for:

Just as many red flags can warn of potential internal theft, several different kinds of theft exist, White said.

"There is petty theft, like the stealing of contact-lens samples, frames, vials of Botox, that sort of thing," he explained. "Then there's the more sophisticated, higher-tiered theft of co-pays, cash payments, petty cash, and 'lapping,' which is taking one payment from a customer and using it to cover a previous embezzlement."

Transactions and inventory can be monitored to help identify possible problems, White said.

"Practice owners should compare all bank receipts and deposit slips, keep receipt books locked up, lock all contact-lens samples, and read all company credit-card receipts and compare them with credit-card statements at the end of the month," he said. "Also-and this may seem basic-use a time clock to keep track of employees' work hours, with an eye toward identifying those who frequently stay late or arrive very early."

White-collar crime