Physicians who aren’t good at business won’t survive

A business degree should be a pre-requisite for medical school.

Extreme? Perhaps, but doctors who have some business acumen will have the best chance to thrive in the medical landscape after health reform.

Marketing and the art of negotiation will soon play just as important a role as the diagnosis and treatment of patients.

In a recent Washington Post article, Michael R. Yochelson, associate medical director of the neurological program at National Rehabilitation Hospital, said that it doesn’t matter whether the physician as an interested in business or not, saying, “in order to survive, this knowledge will be critical.”

Independent physicians need to learn how to successfully negotiate with both hospitals and large insurance carriers. Practices will have to astutely market themselves to compete for patients.

Business has influenced American medicine like nowhere else in the world. This is one reason why more doctors are joining large hospital practices and taking a salary — so they don’t have to worry about these non-clinical issues.

Physicians who can’t accept this simply won’t survive. As Dr. Yochelson says, “The reality is if you don’t understand business practices, you can’t survive in today’s market — and if you don’t survive, you won’t do anyone any good. You will no longer be practicing medicine and providing the much-needed care to the patient that you went to medical school to treat.”

Indeed.

Comments are moderated before they are published. Please read the comment policy.

  • stargirl65

    You can try to negotiate with insurers all you want. They basically are a take it or leave it kind of bunch. They do not care that you have a low ER utilization rate, use computers, do same day appointments, etc. They have a number in their head and that is it. Should you choose not to accept their offer, then you will be out of plan for that insurance. And patients do NOT like paying cash for their health care when they have insurance. They will leave for a participating physician.

    There is no “negotiating” with insurers.

  • family practitioner

    I agree with stargirl.
    The deck is staked against us.
    All the business degrees in the world won’t change that.

    Just finished a weekend on call, frequent phone calls, free advice, at least 5 people wanted to go to the er and I advised them not to. Saved the system (and them) a lot of money. What is my reward? Nada. Zilch. A weekend on call. Aggravation.

    Why do I do it? Because I am in debt and have neither the resources nor guts to start a concierge practice.

  • http://nostrums.blogspot.com Doc D

    I want to control how I practice medicine. If I have to become an expert on running a business to do that, OK.

    But, patients dislike encountering the business side of running an efficient and effective practice. They want “care,” something that “customer service” falls short of.

    When my practice looks like a corporation, I’ve failed.

    • MD/MBA

      Running your practice like a business does not mean being less responsive to your patients, it means being more responsive to your patients. It means improving operations, so patient waiting time decreases. It means delegating activities (such as insurance paperwork that non-physicians can fill out) to free up physician time to see patients. It involves understanding how your practice overhead affects your bottom line, so you can more effectively purchase equipment to make your practice more effective.
      The idea that running a practice more business-savvy is somehow bad for patient care must change. Both doctors and patients are better off when a practice is efficient, and that concept does not involve ignoring patient needs.

  • Vox Rusticus

    I agree. Unless you can go it alone without them, and few patients will pay out of pocket and wait for a check from their carrier, you haven’t got much choice. The government feels free to threaten doctors who organize as a group with anti-trust prosecution where they never do the same with insurance carriers that behave the same way. The U.S. Government is in the pocket of the insurance companies and essentially uses its prosecution powers to tilt the contest in great favor of the insurance companies, something to remember come November.

    Gotta go now, I think I’ll get a cup of tea.

  • docguy

    yeah i’m solo, the crap about being able to negotiate rates is just that crap.

    I have been to meeting where a few mds have stated that they were able to negotiate their contracts. Hmm one of them works with CMS making the fee schedule I wonder if the insurance companies want her to be nice to them.

  • another

    Those who think that the insurance companies are in control of health care are correct. This is a reality that is not good for the patients or the practitioners. I would like to see health care be about people again, not profit. The profit motive brings medicine to its knees to produce more dollars. I do not want to practice to serve them more: we have allowed them to take us hostage for increased revenue at the cost of lives daily. They are bleeding us for thier benefit.

  • Burgeoning Physician

    Although I’m just a young and naive med student, I was under the impression that in the olden days a physician marketing himself was seen as wholly inappropriate. As professionals, a doctor were to be judged by his peers and his patients and not how much he spent on some fancy spread in the Sunday paper.

    • another

      Thank you. The point of this work is still to bring intellectual medical excellence, reduce suffering and improve quality of life to people. Marketing medicine and/or oneself seems crass and beneath the profession.

  • http://www.cyberdentist.blogspot.com Dean

    Them that pays gets to decide. In other words if a doc is the owner, ultimately he has more power to decide how his patients are treated. You may say government or ins. co’s pay, and you are correct, but ultimately, who says you have to deal with them? Look at plastic surgery, lasik etc.

    Docs tend to fall into two categories: those that just want be an employee-less control, “just let me practice medicine”=less pay, but more stability, (definition of an employee) — and those that want to own and control their own business, as an entrepreneur, and yes it is a business = more pay, more control, less stability and vulnerability to market forces. Those who can adapt and thrive will do well. Perhaps, there is a place for both, but do not attempt to say they are the same. Beware outside forces that will try to control your decisions.

  • http://www.boogordoctor.com Russell Faust

    Agreed. To make matters worse, hospitals ALWAYS negotiate their deals with the ins companies before the physicians get to the table. We get the leftovers. Of course, our hospitals must stay in business or we physicians will be out of business as well, but we have been at a severe disadvantage for many years. The pendulum has swung back to the trend of hospitals hiring physicians, including specialists. For some hospitals, their tact is to pay docs a salary, then justify lack of raises or worse, pay reductions, on the basis of financial hardship. At the same time the administration pays themselves handsome ($Millions) bonuses. I can’t think of how to change this imbalance without becoming one of the hospital administrators. Thanks for the post, the discussion, and for letting me rant a bit. RF

  • http://www.alnmm.com Tim Coan

    Our company provides business services to independent physicians with the aim of helping them control their own destiny and stay independent. From my vantage point, your comments are right on. I do believe there is hope for independent physicians, but only if they act boldly. Some will throw in the towel and take the employment gig. But my hope is that there are enough left with the entrepreneurial spirit to stay independent. The rest of our industry is dominiated by giant corporations. Patients needing care must have physicians with whom they have a direct relationship to help navigate the behemoths. Yet, some things have to change. You have to embrace the mindset Kevin describes. You have to band together in real ways. You have to be strategic and intentional about how you compete. And you have to take risks. If that is your DNA, it is worth it and you can do it. We have clients making it everyday.

    Tim