Or, why doctors are so poor at managing money. Some answers:
* Doctors have studied medicine and NOT the economics and finances of practicing medicine – they lack knowledge
* Doctors are really busy people, under a lot of pressure (getting worse all the time – my comment) – they lack the time to get educated about money
* Doctors, for the most part, don’t like dealing with money – they have an emotional reaction to money
* Doctors don’t think of themselves as business owners with responsibilities to teach all their staff to think like practice owners – they just want to be left alone to be a doctor and let the money take care of itself.
In this day and age, not being comfortable with the business and entrepreneurial aspects of medicine is a major obstacle to being a successful physician.
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{ 10 comments }
Being savvy at the business side of your practice can actually make you a better doctor and is as important as “doctoring.”
I don’t understand how doctors could have ever functioned without dealing with the money. Especially those in the business of private practice. Is it because everyone we made so much money before, no one cared? Now since the purse strings are tightening, they have to be more aware. How in the world did they survive before?
anon 7:01
Back in the 1980s a vascular surgeon would do a couple of bypass cases and get paid basically what he is getting paid today and either spend the rest of the day doing charity work or other endeavors. So, basically you are correct.
Don’t know who in their right mind would go into vasc or cardiac surgery today.
Q: How do you turn a doctor into a millionaire?
A: Give him a billion dollars…
7:01 is right.
A lot of doctors who practiced in the 70s through the 90s could make money easily and didn’t have to sweat details of small business. Many got rich despite the leaky finances of their private practice. Living costs were lower, staff and operating costs were lower, banks lent readily to doctors wanting to start out in practice and it didn’t take a full schedule to make good on the note. Terms were relatively easy. In ophthalmology, the most common operative procedure, cataract surgery with implant, paid then five times the present reimbursement for present-day-standard surgery, (which is a much higher quality surgery). Quite a few retired at 50 with no worries.
..And quite a few others, including my partners, lived high off the hog, got married then divorced then remarried, spent all they earned on high maintenance wives, made poor investment decisions, and are now “working ’til they drop” to quote one of them who sees 90+ patients a day!
A physician contrarian fund! Great idea!
Physicians are horrible investors because they are overconfident, are extended credit too leniently (is that a word?) and are targeted by others who assume they are rich (including a certain class of women and business predators). And like everyone else, they feel they need to buy a big house and car to impress everyone. (I am a physician)
b
Buying the big house is smart but the car is not. I drive a beater but live in a big house. Not smart to spend excessive amounts of money on depreciating assets. Additionally, buy index funds or large caps with dividends. End of story.
Greed mostly. You can dress it up how you want, but predominantly it is greed. The ones who are the most cheap are the ones who’s sole motivation is the size of their paychecks. My experience is that those who care the most about their patients are the least cheap. Odd how that works.
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