PookieMD's Blog: Where Physicians Learn About the Business of Medicine

For those of you who insist that medicine is not about making a living, is not a business, and has nothing to do with money, please stop reading.  Immediately go and volunteer at a free clinic, go in to your lab and develop  a vaccine against tobacco addiction, and a pill to cure obesity.  For the rest of you, who realize that you can’t keep the doors open to see patients unless revenues equal expenses, read on.

Medicine, like it or not, is a business.  If you don’t like that fact, you should consider moving to Japan, where physicians are accorded great respect, and little money.  If you decide to stay here in the U.S., here are a couple of ways to look at your medical practice, ahem, business.

In general, there are  two mind sets in setting up and running a medical practice.  There are practices that focus on making money, and practices that are focused on saving money, I don’t care which model your practice falls in to, as long as your realize which is which, and are content with that choice.

Money making practices are focused on…making money.  (Orthopedic practices come to mind.) Key characteristics:

• Seeking profitable sales and loyal patients (customers).
• Developing and training employees.  (This is where orthopedic offices, in general, have it dialed.  The orthopods, do what they do best–surgery.  Their assistants, PAs, secretaries do the rest.  My orthopod has a secretary type his notes as he sees the patients.)
• Spending money where it gets the greatest returns.  Yup, orthopods have EMRS, comprehensive websites, and lots of assistants–all of which are designed to increase efficiency and through put.
• investing in the future of their practice.  Orthopods, and their savvy office managers got the EMRs and websites because they need to constantly feed the pipeline of patients.  Most patients are there for a single episode, so orthopods need to keep the pipeline of patients full–hence investing in the future of the practice.

Money saving practices are focused on….saving money.  (Primary care practices come to mind.)  Key characteristics:

• Getting the work done for the lowest or cheapest price.  (Yes, I know ALL about how little primary care is reimbursed, especially compared to our example above, the orthopod.)
• Maximizing employee and office efficiency.
• Constantly reducing costs through out the business, and looking for ways to save money.
• Providing acceptable service, but not a usually stellar knock your socks off service.  (There isn’t time, energy or money to provide consistently amazing customer service in this model.)

Okay, don’t get all upset with me.  I didn’t make the rules on reimbursement.  I would encourage you to look seriously at how your practice runs and make sure you are comfortable with that choice.  And, just so there are no misunderstandings, if  you find yourself in a practice that is too focused on maximizing revenues, and not enough about time with patients, or if you are struggling to make ends meet, then it’s time for a change either way.   The New Year is coming around, and this may be just the time to reprioritize and grow.  Just make sure YOU chose the direction!

See bookstore page for Get Your Business to Work, by George Hedley.

Tags: medical practice, money making, saving money

This entry was posted on Friday, December 11th, 2009 at 12:00 am and is filed under Increasing Revenues, finances. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.