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5 Steps To A Successful Private Medical Practice Business
Physicians, tell me truthfully! Are you one of those doctors who chases windmills? Do you believe in the precept, “If you begin a medical practice anywhere, patients will come and your medical practice will flourish.”
If so, don’t be embarrassed by that idea being jammed into your brain for decades, and now realize it’s far from the truth. A successful medical practice is a small business, functions as a business, follows all the parameters of a successful small business, is maintained as a business, and grows as a business. So why is it that 95% of medical doctors fail to realize this fact—or if they do, they totally ignore it and hope for the best?
It’s a shame to look at all the older doctors like me who have spent all that time and money on education and medical training only to end up with suboptimal medical practices they hang on to with tenacity thinking, “It’ll get better soon” and never does. At the opposite end of the scale are medical students who have no idea that a medical practice is a business that sells medical care to its customers.
Medical practice business is not about a doctor seeing patients and providing medical care. It’s about a business that stands on its own, has people in it that are employees, or technicians that provide health care services.
And that, my friends, is the ultimate truth as to why almost all doctors fail to reach their maximum potential for income and enjoyment in life. If you can’t quite get my point, remain skeptical about my admonitions, and need to hear it from other experts, I recommend you read what Michael Gerber has to say about it in his 30 year summary of working with doctors, “The E-Myth: Physician.”
Since we are going to now look at the most important issues concerning the business of medical practice and why it usually doesn’t measure up, keep an open mind.
1. A medical business separates goals from functions:
A business is successful when all of the individuals in it are dedicated to performing their required jobs to perfection and understand that they all work, improving continually, towards growth of the business. It’s not about improving the doctor’s income and his staff hoping to get a raise.
It’s about understanding that great things happen when coordinated efforts by everyone there results in tremendous expansion of their patient load and income for the medical practice.
A mind-set that-- the medical staff works for the business, not the doctor.
2. Physicians must readjust their thinking:
Sure, doctors want to be the kingpin in the practice and make all the decisions. After all, it’s only there because of them—right? Inevitably, what happens next happens to all small businesses. When the doctor discovers he can’t do everything in the practice, he relies on an office manager to keep employees in line and the office running well.
Then the doctor can do what he is supposed to do, see and treat patients. A doctor wants to be an entrepreneur but loses control of his office business because he is too busy to make sure the bills are being paid, patients are being treated well, and each member of the staff is happy working there. Most physicians never take the time to actually know how their business is doing—other than seeing the monthly report from the CPA.
Employees come and go frequently for many reasons. Usually, what happens is that one of the other employees takes over the job, and is now doing two jobs for the same pay. The work effort decreases. Practice slows down. The doctor must get involved more in the business part taking away from his time with patients—or staying late in the office to get it all done. During all this process the practice income drops to the point where it can hardly pay the
It may take a year or two before the office gets to this point. Since the doctor and staff are overworked, tired, and stressed, this is the usual point when the doctor closes the practice and moves elsewhere. You’ve seen it happen many times in your community, all for the same reasons.
A few doctors hang on, put up with the recurrent problems, low income, unhappy employees, and simply decide to accept things the way they are for the next 30 years.
3. Understanding the dynamics of money:
Money can be income, profit, flow, or equity says Michael Gerber. Everything in the medical office can be done more efficiently, more effectively, and more smoothly. Getting right down to the exact details of every small business office income and expense item is the only way a physician can evaluate how his practice is doing with any degree of accuracy.
Medical practice equity is rarely understood by doctors and yet is probably the most critical to his business success. It’s what your medical practice is worth to someone who wants to buy it. And, your practice must be understood as your “product”—not your services. Patients expect that your business needs to be there 24/7, whether you are there or not.
You must have your medical practice business be there and available, whether you are present or not! It must be setup to function independently of the physician himself.
4. Provide a business system for your office:
Successful businesses, such as McDonalds, can be compared to a “turn-key” system. Everything in every franchise is done exactly the same everywhere. If you have a detailed list for every job in your office, any newly hired employee for that spot knows exactly what they are expected to do—and you eliminate the troublesome job of trying to train them.
The business system you develop is the secret to your ultimate success. While you are on vacation, or at medical meetings in another area of the country, new patients are joining your practice, your office jobs are being maintained properly, and the usual functions of your office continue. You never want to entertain the idea that, “when I’m away, we don’t
make any money,” which is exactly how most physicians truly feel.
The problem for most physicians is that the business system has to be in place at the start of the medical practice for it to work effectively. If you implement a new system in your present practice, it’s almost always necessary to start with a new group of employees. Breaking down the mind-set of old employees as well as their habits they have developed working for the old you, just doesn’t work well.
Relegate yourself to being a doctor-as-employee—not doctor-as-owner in this situation.
5. Business Plan is the initial step:
The foundation for your successful medical practice begins with a practical sound set of dreams and goals for your medical practice business. The fallacy of starting a medical practice and then deciding where you want to go with it doesn’t work, as a whole bunch of medical doctors find out eventually.
Once your vision of where you want to be in 20 or 30 years is clear in your minds-eye, it’s just a matter of completing the blueprint and setting up shop.
Sure it may change over time. So, you must extend your blueprint in another direction.
6. (Bonus) Marketing is the glue to hold the system together:
Unless you are already a medical doctor celebrity, you must have marketing strategies as part of the planning strategies. Successful businesses require it. Understanding what marketing is all about at the beginning means doing some studying and research.
Patients have to know you are available, where you practice, what you are trained to do, and what you provide that patients need or want. You do that through marketing strategies
As you can see from what I have described, the whole approach is the opposite of what is traditionally accepted for medical practice. The mistake is to start at the bottom, as most do, and look up instead of starting at the top and look down at the business structure of medical practice as you know it.
I want to burn these thoughts into your mind so you will never forget to consider them when you reach a point where enlightenment of your left brain dominates.
And, yes, there’s much more about these factors you’ll need to know and understand. That’s exactly what I intend to teach you when you’re ready.
Before You are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.
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