Lessons Learned From My Medical Office Business Mistakes – Part 2 of 3


The lessons you learned in part 1 of this series introduced you to many of my medical practice eroding mistakes, not so different from hundreds of other physicians starting their practice, yet going well beyond good judgment that you might relate to in some way. For physicians who are never taught, never learned, never considered the importance of knowing how to effectively manage the business of their medical practice, which is basically all physicians who graduate from medical school, even today, it’s a matter of learning it all the hard way and having to suffer along the way more than you need to.

We normally consider ourselves as being quite intelligent, as being above average in common sense and judgment, and as being intellectually selective in understanding the academic steps necessary for a medical career to succeed. If we are in that elite group of academically enlightened individuals, then, why is it that you are easily convinced that the illustrious practice of medicine can easily be successful without a knowledge of managing a small business effectively and without implementing the proven elements applicable to all successful businesses?

Now, to dig much deeper into the reasons why all of us are caught in the web of medical tradition, miss out on the true business foundations, and near the end of our practice years are forced to realize we could have done much more with our medical practice. We could have been more business oriented, been a better manager, essay writing service earned a lot more money, spent more time with our family, and used our intensive medical education to accomplish a much higher degree of personal accomplishment over those years. These regrets are ever present in the older docs, but too late to make amends. Not going to happen to you………right?

Medical practice business mistakes and solutions:

1. Believing that your position in medicine will miraculously launch you over any financial barriers you face (tradition):

Talk to any successful entrepreneur in business today and they will tell you that one of the best ways to rise to the top is using a leap frog financial strategy. When you open your first office, spend as little as possible, either by renting space in a reasonable location, or sharing office space with another physician until you have discretionary income enough to move, renovate, and go solo.

A common way to cut costs and save money is to join an existing medical practice with a formal cost sharing agreement on paper. Those physicians who start out as an HMO employee and later decide to go into private practice rarely save enough money to carry them into and through the first 6 months in a new practice. Face it! We have felt money deprivation for so many years by then that the first natural urge when you finally are earning some money is to spend it for “soul” satisfaction.

One of the reasons for holding off on buying a new car or house or signing a long term lease agreement for your office, at least for the first 3 years is related to your practice future. Presently, about 10 to 12% of doctors move their practice each year according to an AMA survey. They must have a good reason to do that. Right?

The two most common reasons for any physician to move their medical practice elsewhere are financial and financial. The first is a direct result of practice competition where a physician is unable to draw a sufficient flow of patients to financially sustain his or her practice business. The second is a little more subtle, goes unrecognized long before the crisis happens, and occurs at a time when sensibly it shouldn’t be happening. It’s a time when the chaos of your own unorganized and reactive management of your practice business reaches a point (usually 5 to 10 years into your practice) where your business instability can no longer be depended on for growth or financial independence of your practice. You should understand the underlying cause, but most physicians never see it.

You’ll notice that each of these financial disasters are those which could easily be resolved by knowing how to effectively run your practice business using business strategies that are employed in all successful businesses. You don’t have to move your practice…..just your mindset.

Often, this is also a time when you look back to the time when you were deciding where to start your medical practice. Where do I want to live for the next 30 or so years? Am I obligated to go back to my own home town because of family ties? Is it the climate that makes the most difference to you? Shall I go to a big city with lots of patients available?

If you are business literate, no matter what the emotional influences are, there are critical business related demographics that make a world of difference to your success or failure. For example, if you were an ObGyn physician looking for a place to practice, you should know the basic statistical data concerning your probability for practice success before you decide on the town or city or state. When you divide the number of OBG physicians practicing in the city into the population of the area and discover that the ratio is more than one ObGyn physician per 10,000 population you’ll probably not succeed there without a vicious struggle for patients.

Finding the ratio to be 1/20,000 population or more, would indicate you most likely will be able to start a practice there, build it rather fast, and hold a strong position for your practice business in the area.
Successful physicians are those who have checked their competition, visited the area where they want to start practice, matched the amenities to their family needs, researched the available consultants they will rely on, know the hospital facilities in detail, and have an exact mental picture of where they want to be 20 or 30 years in the future with their practice.

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