More than ten years ago, NPBO published an article about employee theft; it was titled “Mis-placed Items?”
Barbara talked about her initial experience with theft in the office. During her first year in practice, she lost a Doppler, a canister of Verruca-Freeze®, and a number of other small items.
Initially, she thought the items had been misplaced. It took her some time to realize what really happened… someone had walked the items out the front door!
Employee theft is not something you worry about when getting starting in your practice; nor should it be. There is more than enough to worry about already.
But unfortunately, employee theft happens more often than we like to think.
The question is what to do about it. What steps can you take to minimize the chances of it happening in your office?
What is Employee Theft?
While it seems a silly question, it is not. Employee theft comes in many shapes and forms. And sometimes, it may not even look like theft at all.
Here are common ways “not so nice employees” could steal from your office and hurt you in the process:
Theft of Cash and Supplies
Dishonest employees may take small amounts of cash from the office petty-cash.
Why small amounts? Well, small amounts are less likely to be discovered and don’t seem to be that important in the grand scheme of things. However, even small amounts of money will add up over time to a lot of revenue lost for your practice.
Another tactic is to pocket cash payments made by patients for co-pays, deductibles, and co-insurance. This leaves your office taking in less revenue for the services provided and less income overall.
But that’s not all the damage that’s done. Chances are, your patients will be impacted too.
When an employee pockets patient payments, it appears that these patients have not made any payments to the practice; it may even seem that their accounts are past due.
And to collect money from these patients, your practice may attempt to collect again. As you may have experienced in your own practice, this is a recipe for disaster. Most patients will be upset, and some may even look for a new provider, one who can be trusted more.
And while none of this is your fault, ultimately you will take the blame; because as the business owner, the buck stops with you!
Some dishonest employees may also “borrow” from your office: paper, printing supplies, software, and small medical equipment. While this activity may cost you a nice penny over time, it’s nothing compared to this.
Some brash employees even “borrow” laptops. Forget that nobody should take anything that doesn’t belong to them. There is a huge potential for exposure and loss of patient information. And of course, this means violating HIPPA regulations and laws.
No matter how you look at it, it would be a bad situation
Let’s see, has this ever happened to you?
You’re working with one of your patients and want her to try out a new medication. Fortunately, you have samples to give to her to get started. However, when you reach for the samples, there is not a single one left!
What a surprise…
Not only are you left without medications to give to your patients, but you’ve also been embarrassed.
Patients may wonder…
“What kind of clinic is this? Don’t they know to keep better track of their meds? I wonder what else gets missed in this office?”
While many patients are forgiving, let this sort of thing happen a few times, and some of them will head for the exit. It’s just bad PR for your office.
Now, let’s take this one step further.
Let’s say one of your employees pockets medications and gives that to someone else. What happens if that person experiences an adverse reaction? Chances are the employee is not aware of possible interactions and side effects.
If it’s a Schedule Medication that gets pocketed, the situation might even turn out worse. And guess who’s left holding the bag? Depending on the circumstances, it might well be you!
What is embezzlement and how is it different from basic employee theft?
Embezzlement most often refers to the diversion of money and other assets from a business. Typically, the embezzler is in a position of trust and has easy access to money and assets of the business.
In contrast to embezzlement, employee theft typically refers to taking money or small items from the business.
Most often employee theft happens when an opportunity arises. Typically there is not an elaborate scheme in place, designed to steal money or property on a grander scale.
I talked about embezzlement in a recent article, and you can read it here.
You may be losing money because you’re paying for work that’s not getting done. Some employees do it deliberately while others default to it.
Employees doing this by design inflate the time they claim to have worked. They pad their time sheet with 5, 10, or even 20 minutes here and there, and it adds up.
The employees doing it by default simply don’t get their work done. Some spend time on personal calls, surf the web, or take care of other personal business while on the clock.
Co-workers often have to pick up the slack to get the job done, or work is left undone altogether. In some cases, it might even be you who is left to get the work done.
Others are slow in getting the job done. These are the employees who take far more time to complete a task than it should take them. The bottom line is this; they only get a fraction of the work done compared to what their co-workers accomplish.
In all cases, co-workers who pick up the slack often feel unfairly treated and resent the situation. This leads to discord and dissatisfaction in the workplace, and you may end up losing a good employee.
As you’ve seen, not all theft is equal.
While some theft may not seem substantial by itself, when combined with others, they’ll add up over time and take a big bite out of your bottom line.
So now the question is, what can you do about it?
Well, there’s a ton of stuff you can do to safeguard against theft in the office. However, it all comes down to three principles.
And here they are:
Hiring & Firing
It begins when you’re hiring. Take your time when hiring new employees.
Do your due diligence, check references and run background checks. Have every new hire come back for a second interview. While this will not guarantee that anything won’t happen in the future, it will put the odds of hiring a good employee on your side.
What should you do when you notice a problem with an employee?
Do talk to the person and find out all details. Things are not always what they seem.
At the same time, don’t spend too much time trying to teach, correct, or give a second chance. As the saying goes, hire slow and fire fast.
Policies & Procedures
Establish clear and written policies and procedures for all aspect of your business.
Your employees must be clear about what you expect of them, how things are done in your office and what eventual consequences would be.
Always provide your employees with proper training and instructions about your policies and procedures.
Do this when they first start their employment. Also, provide employees with a yearly refresher and when you update or add to your policies and procedures.
Controls & Cross Checks
Make sure you create and implement controls and cross checks, such as:
- Supervise employees
- Utilize technology security protocols
- Separate tasks so that two employees are involved
- Utilize a cash receipt book to log all payments to your office
- Issue printed receipts to patients and maintain an office copy
- Require receipts for any office expenditure
- Limit who can authorize practice purchases
- Conduct informal audits
- Pull reports from your business software and review on regular basis
- Most importantly, let it be known that you are paying attention
Follow these principles. Implement them, then improve and fine tune them.
You’ll not only be taking steps to safeguard what’s yours, but in the process, you’ll also create a better work environment for yourself, your employees, and a more successful practice.
In closing, let me say this.
While employee theft is real, I believe most people are honest and want to do the right thing. Unfortunately, there is the occasional “bad apple” that gets put into the mix and messes it up for everyone.
So take the time and think how you can safeguard against theft in your office. Take steps to secure what’s yours and be vigilant about keeping your office free from the occasional bad apple.
Let us know what you think. Have you experienced a problem with theft in your office before? Let us know how you handled the situation by leaving your comments below.
By Johanna Hofmann, MBA, LAc; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.”