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Physicians can survive and thrive, professionally and financially, if they will leave the smooth operation of their practice to business professionals.
A medical office is a complicated business for several reasons:
• The business of medicine is subject to all of the regulations applicable to any service business, plus regulation that applies directly to healthcare;
• Most services require approval from a third party;
• Consumers are often unaware of their payment responsibilities at the time the services are rendered; and
• The business model is, has been, and will continue for the foreseeable future to be in a state of flux.
The situation is exacerbated because:
• The services provided can be technically complex, and even simple services require constant vigilance to keep current with new developments and changes in best practices;
• Staff requires structure, training, and management, and the mechanisms to provide them are seldom in place;
• The physician/owner has little time for, patience with, or interest in the mechanics of running any business, much less a highly regulated one; and
• Reimbursements are going down, costs are going up, and net income is being squeezed. If money was ever available for outside help, it is less available now.
Is there an obvious solution? It would seem so. A significant number of physicians have given up on covering all the bases. They do everything they can to keep up to speed on developments in medicine, work harder, and hope osmosis will make them aware of crucial developments.
Once aware of new regulatory requirements, operational issues, and financial problems, these physicians invest a few minutes to think about what to do. Then they go back to work and hope to avoid disaster.
This probably sounds like criticism, but it is empathy. Physicians are facing incredible and increasing pressures on all sides. Something has to give, but what?
The only solution I see for physicians and groups who want to remain independent is professional management. Even now, I know practices in a variety of practice areas that are very profitable and provide great professional satisfaction to the physicians in them. What they all have in common is either a strong businessperson managing the business, or a cadre of specialized business people they engage on an as-needed basis.
To be successful, physicians must be willing to give the business professionals specific objectives, the latitude to do their jobs, respect for the disciplines they will impose, and steady attention to monitoring progress and outcomes.
This is a lot of work. It requires careful attention to engage the right businesspeople in the first place and invest upfront effort in defining their deliverables, the ground rules, and the measures of success. It also requires spending some money before the prospective benefits become reality.
Engaging professional business management is very similar to selling the practice to a hospital or large group. The difference is that the physician retains the right to set priorities and policies, as well as the upside income potential. It is well worth thinking about.