Maybe it’s because you are a business…

I have come across another article about how physicians are losing money. The usual culprits are blamed, “Among the factors they cite for their shrinking revenue: falling insurance reimbursements, changing regulations and rising business, medical liability and drug costs.” While all these factors contributed to the situation, the blame must lie at the feet of the physicians. I have worked with doctors for over 10 years, both as a provider and as an administrator and I am constantly surprised at their inability to grasp the concept that medicine is a business. In a business, if your revenues continue to drop year after year and expenses continue to grow, then maybe you need a new business model. The article does discuss concierge medicine; however, that is a limited business model that does not deal with the situation at hand.

“From 2000 to 2011, Small Business Administration loans to physicians' offices, including private practice doctors and mental health specialists, ballooned to $675 million from less than $60 million.”

It is interesting that the article cites the growth of Small Business Loans to physicians began about the time that Medicare froze the Fee Schedule, effectively keeping a physician’s reimbursement at pre-millennial dollars. When a business is suddenly facing a reduction of revenue, for whatever reason, the successful business changes to meet the new reality, businesses that do not change fail. Doctor’s did not change to meet the new reality of medicine and as a result are failing.

The successful physicians are those that realize that they do not have the business acumen needed to keep up with the changing landscape. They will actively seek professionals in the healthcare business field to assist them. A successful physician, either through consulting or direct hire, is going to work with professionals to develop and implement the business changes needed for success. They will put the needed funds into technology, staff, marketing, billing, and administration. They will diversify their services, have office hours when patients want to be seen, and offer products for purchase. They will recognize that right now medicine is a volume business; the more patients that are seen in a day, the more money that comes into the office. Finally, doctors will recognize that medicine is no longer the cash cow it once was and work with business professionals to keep their medical practice viable so they can do what they went to school to do, practice medicine. In other words, they will begin to act like other successful businesses and businessmen.