I often find that many doctors come to me with doubts and are grappling with the idea that they don’t know how to manage the business aspects of their private practice. However, in working with them, most come to the realization that the truth is that the skills required to run a successful medical practice are not as foreign as they may think. In fact, they are deeply rooted in the very expertise that we each have honed through the years of our medical training. They are the same skills that we use daily in our clinical approach to treating our patients.
Just as no two patients are alike with each requiring a personalized approach and tailored care plan, our private practice demands the same level of attentive examination and customized treatment. We wouldn’t dream of prescribing a treatment plan for a patient without first doing a thorough assessment, taking a good history, looking at vital signs, and examining our patient to see what symptoms are present and reproducible. Similarly, we must approach our medical practices with the same diligence — taking the time to carefully evaluate the unique needs, challenges, and opportunities before formulating a strategic plan of action.
Translating medical expertise into business acumen
When physician colleagues started reaching out for my help in transitioning from an insurance-based practice model to a direct pay/cash-based approach, I realized that what seemed instinctive to me was difficult to articulate and convey to others. Despite my years of hands-on experience as a private practice owner, I found myself struggling to relay the concepts and strategies that had worked so well for me. It was like I was speaking a different language entirely. I took advantage of an opportunity to go to business school so that I could learn the proper pedagogy, formal business terminology, and frameworks, with the purpose of understanding the basics and so that I could better communicate these ideas to my colleagues.
As I went through the curriculum, something struck me during my studies — there were remarkable similarities between the skills we use daily as physicians and the core disciplines taught in business school. I began to see accounting, finance, marketing, operations management, organizational behavior, leadership, strategy, and entrepreneurship not as foreign subjects to me, but they were simply different labels on concepts — the very same principles and practices I had been applying in my medical career all along.
It was an eye-opening experience, to say the least. Suddenly, I could see the clear parallels between managing a patient’s care and managing a successful practice. The attention to detail, analytical thinking, resource management, and commitment to excellence that make us great doctors are precisely the qualities that translate into the basics of sound business acumen.
So, while the formal business education was invaluable in introducing me to new industries, expanding my network, and sparking innovative ideas that allow me to interact in and out of my world as a physician, I am grateful that I learned the language and structure to effectively communicate entrepreneurial ideas to my colleagues. Do you need an MBA to be a private practice owner? No. To pursue the degree is based on a personal decision. The truth is, as physicians, we already possess the basics and fundamental business and management skills. If we treat our practices as our patients, it’s just a matter of recognizing and applying those skills in a different context.
Treating your practice as your patient
So, it is not only possible that physicians can do this, but it is a natural extension of the expertise that we already have. Allow me to break down core business school subjects in the context of the physician’s wheelhouse.
Accounting
You know how we’re always stressing the importance of keeping detailed patient records? Well, the same level of detail and care is needed when it comes to our practice’s finances. Those seemingly boring financial statements are like the medical charts of our business. The income statement tracks our money coming in and going out, kind of like a symptom log for our bottom line. And the balance sheet? That’s a full-body scan of our assets, debts, and overall financial health at any given moment.
However, it’s not just about recording the numbers. Just like we analyze patient data to diagnose issues and plan treatments, we have to look into those financial reports. We look for patterns, red flags, and anything out of the ordinary that could signal concern or trouble. And just as preventive care is crucial for our patients, keeping a close eye on our finances through budgeting and forecasting helps us stay ahead of any potential money woes. It’s all about using those financial vital signs and symptoms to make smart decisions for the long-term well-being of our practice.
Finance
If we look at financing, it is the lifeblood of any business, including our medical practice. The goal is that we have to make sure we have enough resources to sustain. It is like balancing a patient’s “ins/outs” – keeping homeostasis and/or improving the system. Our experience in managing patient care resources and treatment plans has given us the necessary abilities to understand effective cash flow management, including budgeting, spending control, and revenue forecasting. We’ve got to make sure there is enough revenue coming in to keep the lights on, pay our staff, and cover all those other bills that come with running our business.
But as I mentioned, as it is important to sustain, we should be thinking about growth and investing in our future. As in surgery, we know that performing the indicated procedure is critical, but equally important is to consider the recovery success and the degree of rehabilitation to return to function. We need to know what motivates our patients and offer options. If we want to expand our facility, offer new services, purchase new equipment, or just have a little extra cushion for a rainy day, we need to get creative and investigate all options, whether it be loans or investors, when more capital is needed.
Marketing and pricing
When a new patient comes in, you are scanning them from the time you lay eyes on them, and your goal is to do a thorough examination. We ask about their medical history, run some tests, and really get to know their unique situation. In a similar way, attracting new patients to our practice is a lot like that initial workup. You can liken that to market research, and with each patient that you see, that research has more depth. We make it a point to understand the terrain, get out there, make ourselves visible, and let people know what makes us different.
Getting involved in community health fairs or giving talks at local organizations is like taking a patient’s history – it allows us to introduce ourselves and start building that relationship. Having an engaging online presence with an informative website and active social media is akin to running diagnostic tests – it gives prospective patients a way to learn more about us, and analytics are our way of reviewing data. And networking with other providers for referrals? That’s like getting a second opinion from a respected colleague.
When we examine a patient, we don’t just listen to the symptoms they are showing—we take a comprehensive view of their overall health, right? So when we determine our pricing structure, it requires that same big-picture perspective. We can’t just look at the cost of providing a specific service; we have to consider our overall expenses, what our competitors are charging, and how our patients perceive the value of what we offer.
Pricing has a similarity to developing a treatment plan and the way we explain it. If we recommend an expensive procedure or medication, we make sure our patient understands why it’s worth the investment based on the desired outcome. With our pricing, we’ve got to be able to justify our rates by highlighting the skill, experience, and quality of care we provide; however, we also have to be mindful of making our services accessible — we try to minimize side effects or financial strain when treating patients. It’s all about finding that sweet spot.
Operations management
There’s a natural flow in thinking and moving that physicians use to keep things running smoothly as they are seeing multiple patients day to day, and that skill is what allows physicians to manage operations. Just like businesses optimize their processes for efficiency, we can apply our clinical skills to streamline everything from patient intake to scheduling. By carefully examining each touchpoint with the patient and identifying bottlenecks, we can implement solutions that increase productivity, reduce wait times, and elevate the overall experience. It’s all about observation and fine-tuning the processes.
And it’s not just what our patients see, we have to manage the back end too. Our understanding of treatments and consumption patterns allows us to implement smart inventory strategies that maintain optimal stock levels while minimizing waste. And because we tend to be creatures of habit and adhere to protocols, we can establish robust tracking and documentation procedures to ensure accountability. When it comes to negotiating with vendors and evaluating product quality, our clinical lens gives us a distinct advantage. We can run a tight ship from the exam rooms to the supply closets by bringing that same operational discipline we apply to patient care.
Organizational behavior and leadership
Leading and managing teams is nothing new to physicians. Think back to those residency days and that whole “see one, do one, teach one” grind. Once we learned a protocol or procedure from our attending or chief, it became our turn to teach it to the intern or medical student. It was all about understanding a chain of command; hopefully, it was one that fostered an environment where everyone felt comfortable speaking up and collaborating. We know how to lay out the game plan, explain the “why” in a way that gets people to understand their role, and delegate responsibilities like pros. It is about creating an atmosphere where everyone is united behind the mission and goal – just like when we were running a code or doing a case in the OR. We can tap into those finely-tuned leadership abilities to steer change, remove roadblocks, and drive progress. Little did you know that all the years of being forged in the fire of residency were basically a master class in management.
Strategy
With every patient we treat, we develop a customized plan or treatment protocol – that’s our clinical strategy in action. Crafting a strategic vision to guide our practice’s growth and direction is really no different, and that forms our corporate strategy. This vision should align with our core values, areas of expertise, and the needs of the community we serve. It will steer decisions around what services to offer, how to allocate resources, and what long-term goals to pursue.
Just as businesses innovate to improve competitiveness and meet evolving customer demands, staying ahead of the curve by implementing innovations isn’t just about flexing our medical knowledge – it’s a crucial strategic move. Investing in the latest imaging systems or training staff in groundbreaking therapies ensures we offer cutting-edge, state-of-the-art care that keeps patients coming back and attracts new ones. Making these big-picture strategic calls to maintain our competitive edge is vital for long-term success.
Entrepreneurship
Perhaps, the often-underrated skill set that physicians forget they innately possess is entrepreneurship. Every encounter with a patient is a complex project that we have to manage. Consider how we have to coordinate and understand what is going on with each organ system and correlate the interactions. The analytical abilities required to diagnose and treat patients directly apply to our ability to identify business opportunities and develop innovative solutions. The resilience and adaptability instilled in us to rapidly adjust to changing situations equips us with the mindset needed to pivot business strategies. Our drive to continually learn and improve aligns with the growth mentality an entrepreneur needs to evolve their approach when faced with challenges. While the contexts differ, the core competencies that make us exceptional physicians are highly transferable assets for entrepreneurial pursuits across any industry.
Our medical training has equipped us with critical thinking skills to assess risks, manage uncertainty, and solve complex problems creatively – all crucial entrepreneurial skills.
At the end of the day, we’ve got this. Running a successful medical practice is well within our grasp because the very skills that made us preeminent clinicians are the same ones that will make us unstoppable as business owners. We know how to size up a situation, create a game plan, and deliver personalized solutions that get results.
The business of medicine doesn’t have to be daunting. In fact, it’s an opportunity to use the very talents that make us so great at what we do. With confidence in our abilities and a customized approach, it’s important to realize that we have it within us to build thriving private practices that are as extraordinary as the care we provide.
Doctors, don’t underestimate the business acumen you already have!
Grace Torres-Hodges is a podiatrist.
