Medicine should welcome the fact that it’s a business

At the end of each day during my primary care rotation, my preceptor and I sat together and reviewed patient charts. Simon Craig, MD*, built his internal medicine practice from the ground up and is a pillar of the Connecticut community he has served for more than two decades. He is a physician, a clinician and a scientist. While he manages the day-to-day operations of his practice, he avidly denies being a businessman.

On one occasion, we were having a deep discussion about PA education during which I made a comment that business ideology should be taught as part of medical education. The look from his eyes went through me like daggers. What resulted was a fiery, passionate and off-the-cuff dissertation about how business and medicine ought to be entirely separated. I vehemently argued back. Prior to entering PA school, I was trained at the leading institution for entrepreneurship education, and started and managed several companies. I know business, and I recognize that our medical system would be stronger if healthcare providers knew it too.

Business is not evil. Of course, there are some aspects of business that are cutthroat. There are individuals looking to make a quick buck at the expense of others. Some companies operate with questionable moral grounding and others with seemingly no meaningful purpose at all. However, it would be irresponsible to deny that similar behaviors can exist in medicine.

To me, harnessing business values means thinking creatively to craft solutions for everyday problems. It is about delivering outstanding service while providing a scientific framework for doing so. It begs for efficiency and waste reduction. Perhaps, above all in our current healthcare climate, a good medical “business” is one that manages its costs — something we have profoundly failed at in healthcare.

In reflecting on my business education, there are countless examples of lessons learned which apply to the world of medicine:

  • The managerial accounting course explained how overhead expenses contribute to real costs. It is with those principles that I understand why a single tablet of acetaminophen costs $2 at a hospital and a container of 100 tabs costs about the same at Target. Understanding why specific pricing exists is paramount to brainstorming ways to reduce fees.
  • The services marketing course provided key insight into how important communication is within a service-based industry. We must never forget that at its most basic foundations, medicine is exactly that — a service, and one that is provided to thousands of patients each and every day.
  • The human resources management course detailed how the proper treatment of employees leads to better outcomes. Medical providers who enjoy the culture of their respective institutions work more effectively, embrace team-based medicine, and ultimately provide better patient care.

The list of parallels goes on.

Dr. Craig made a point that businesses exist to make money and his practice exists to treat patients. In his eyes, the two interests were completely misaligned. Herein lies one of the largest misconceptions of the art of business. While it is true that basic business principles are about improving the “bottom line,” nowhere is it dictated what must be done with those earnings. In medicine, those profits could (and should) be reinvested into patient care.

Case in point: Dr. Craig and I spent time together crunching numbers and discussing process improvements within his practice. It became apparent that Dr. Craig could actually hire a PA with the savings, thus improving his patients’ access to medical care.

There have been times in my PA education where I have been seen as an intruder by skeptics; an impostor looking to learn medicine only to turn around and profit from it. The truth is quite the contrary. I am proud of my business education, and it is because of that education that I feel prepared to not only be an excellent medical provider, but also an individual poised to contribute to the PA profession and the field of medicine. Rather than fearing business, we should all welcome and learn from it — and then utilize that expertise to effect positive change in our healthcare system.

* The name of the primary care preceptor has been changed.

Rich Bottner is a physician assistant student.  This article originally appeared in PAsConnect.

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  • Ron Smith

    Hi, Rich.

    Good article. In particular I would like to give some food for thought not only about medicine as a business (which it will have to be to survive), but the principle that you suggested about thinking differently about how patients access your services.

    First off, I’m a solo Pediatrician. And by choice. I LOVE it! I will never go back to a partnership or any form of doc-in-the-box shock therapy. (No offense to anyone intended…my thoughts ran me back to a terrible experience, but I digress).

    Now the most important thing that you have to remember is that as a solo practitioner, you don’t treat your practice as a business, then well, you are likely heading out of business and out of practice.

    We help no one if we don’t attend to ourselves. It’s like I heard someone say thats the reason you put the oxygen mask on before you put it on your child…

    I have two nurse practitioners and some eleven staff supporting us. I would never have dreamed that the practice could be highly successful with more people rather than less. But I have realized that because we form a very, very close knit team, our patients really get very good access in a timely, efficient manner. Not only that, but I constantly get comments about how happy and helpful everyone is when parents come in, especially for the first time.

    The new medicine is the business of medicine. When we treat the patient like they are also a customer whose satisfaction we crave, then we have really gotten to the core of good patient care which will be the result.

    Warmest regards,

    Ron Smith, MD
    www (adot) ronsmithmd (adot) com

    • Chiked

      You are describing the business of running a solo practice. That is not new. It has been that way for decades.

      Corporate medicine is an entirely different business model which Dr. Craig is probably alluding to. It may make good customer satisfaction but it is not good patient care.

      • Ron Smith

        Hi, Chiked.

        Yes, you might think that what I described is the same, but really it is not. I’ve described a patient centered and focused ‘business’ as opposed to a physician centered business.

        Here’s the difference. When we three providers are working, our goal, and the stated goal of everyone in the office is to have patients (customers) in the room at their exam time and out in an hour.

        That means that I and everyone else in the office are focused, not on my wants, wishes, or whims, but the needs of the patient/parent whose customer experience is the goal.

        That is not, nor has been, the focus of medical practice, solo or otherwise, as a rule.

        The best experiences that I can compare this too are when I drive through a fast food restaurant. Most of the time, the people waiting on you really could care less about you and your experience. But when I go through a Chcik-fil-a I get ‘how may I help you’ and when I leave its ‘its been a pleasure serving you.’ I leave with fresh, hot food and a real feeling that I’m appreciated.

        The difference in customer experience for me has been so dramatic, that I don’t even consider going to the other fast food drive throughs.

        Just this week, I’ve had a handful of new patients, that weren’t newborns or people who have found me because they have had a job-related transfer to the area.

        When I ask new patients how they found out about me, I’ll hear that the person they worked with or friends on Facebook highly recommended me.

        I’m keen on not cutting shortcuts in the exam room, keeping my hand off the doorknob and my nose out of the computer as much as possible. I exhibit a heart-felt excitement about each family. Considering that I’ve been at this now thirty years, the medicine long became old even though I have a couple dozen or more children with rare, even very rare conditions. I truly do love these children and their families.

        But as C. S. Lewis says, you cannot bequeath to the next generation what you have not got.

        My joy at new families and children is sincere and is one of the things that will carry me on through the next 10 to 15 years, if I live and can function that long. That is a very personal change that is beyond the scope of this blog of course, but that does speak really to why my practice is the way it is.

        Warmest regards,

        Ron Smith, MD
        www (adot) ronsmithmd (adot) com

        • Chiked

          I have worked for several doctors who through various methods try to keep their patient arrival and departure times to less than an hour. So I still don’t see what makes your business model any different from others before you.

          But your fast food restaurant analogy is spot on and is what is wrong with medicine today. Good patient care cannot be measured by conventional business metrics because the product and ethics surrounding are entirely different.

          • Ron Smith

            Hi, Chiked.

            I think the difference is that we are scheduling adequate time to see the patients besides being timely. I see about 25 patient visits a day, and not 40 as do our nurse practitioners. Our patient flow model is different in the way we have a nurse facilitator that is actually bringing the patients back and watching to see that we are always on time. But there’s more to it I didn’t mention.

            As a physician I’ve put myself under the practice manager (she’s not an office manager). She has the ability to confront me if I’m not keeping up my pace just as well as anyone else. If I’m late, then she will want to know why, just like anyone else. She sets the whole tone for the office and her attitude is that this has to be fair for the staff, patients, and me. Everyone craves this.

            As to the staff, they have a true profit share incentive in the practice. That vested interest then really makes a difference in the way they interact with patients. I get comments continually about how nice and warm our staff are.

            Customer experience is not the same as getting them in on time and out in an hour. And that’s really what I was alluding to.

            Warmest regards,

            Ron Smith, MD
            www (adot) ronsmithmd (adot) com

          • Rich Bottner

            Ron Smith – greatly appreciate your insight and comments, and could not agree more!

            The major take-home message here should be that basic business principles applied to healthcare make the delivery of medicine more efficient AND more effective. In Connecticut, there are a few large healthcare systems that may fit into some of the respondents definition of “big corporate medicine.” However, still, understanding the language of business can help one be more productive within the confines of their institutions.

          • whoknows

            I have to disagree with you here Rich. I am a physician trying to get an accurate read of my own urgent MRI. my morning started out trying to go to a huge 5 star academic Medical center to get a comparison from the previous mri done at this facility. This is the standard of care.

            The head radiologist said she was too busy to talk to me because she has 50 MRI’s to read this morning and has no time for my urgent case. Every 4-5 minutes a new image to read and that’s just their morning. The place looked like a sweatshop but in the dark.
            Do the math. Each MRI is say on average $4000 times 50 is $200,000 for just one radiologist.
            Is it efficient and more effective? Not for me. Maybe it would be for you if you ever have to deal with it.
            She had no time to go over the urgent MRI.

            Yep those are “basic business principles applied to healthcare” as you say. At this time, still not read by her and no diagnosis as yet. Had to spend the rest of my day hunting down another radiologist outside of this medical 5 star bureaucracy to take the necessary 4-5 minutes required to accurately read and diagnose the problem. So this is great efficiency to you?

          • Rich Bottner

            It’s absolutely not great efficiency… but you can’t blame “basic principles” for that as those same principles would mandate identifying the process issues (bottlenecks, etc.) that have resulted in the delay of your MRI reading.

          • rbthe4th2

            Hmmm. What about: did you have to go to another doctor for the same symptoms? Was it a referred specialist or did you need to see another same type of doctor? How many visits did it take to get your situation resolved? I don’t see that in surveys. Liking a doctor is one thing. Can they get the job done is another.

      • buzzkillerjsmith

        Yep. There are evil businesses in health care, those that care only about profit maximization, and what he calls businesses–practice is the correct term– that are not. From what I have seen, CorpMed is usually evil, designed to be so.

        The poster’s use of the word “business” is meant to be provocative and not to accurately describe the reality here.

        The business brainworm continues to infect the world of medicine.

  • Deceased MD

    This author is obviously clueless.

  • Dave Mittman, PA, DFAAPA

    Of course medicine is a business. If not, please let’s return the medical corporation tax breaks you get. And while we are at it, let’s let the PA student become a partner in your medical corporation or open one if if he so chooses when he graduates.
    Everything is a business. You sell yourself. You sell your services. You want them to be “bought” and you want your consumers to be happy. You also want some positive return on your investment. You want to save money and put it in the bank and go on vacation and businesses make that possible. The terms corporate, profit and loss, head count, even “Holiday Party” are all common business terms.

    I am a PA that practiced for years and also entered the business world with a PA partner. We did very well-well beyond what we thought we could do and used the principles we learned in medicine with some common sense.
    We marveled at how we would have changed things if we were “in charge” of a medical office when we practiced after years of being bosses who were open to change. One thing is we would have found the best NPs and PAs in the state and hired the max amount of both and created a real TEAM second to none. Then gone out and conquered the world.

  • Jbsilva

    I think this article would be more accurately titled “doctors should know more business”; which I agree with. However saying modern medicine needs more business seems seriously near-sighted. Mainly because medicine today is more of a business than it ever has been. The majority of medicine is provided by large, multicenter hospital conglomerations that are run by MBAs not MDs.

    Just try analyzing the current trends of modern medicine from a business perspective. The rise of mid-level practitioners such as NPs and PAs is directly a result of cost-cutting measures. The rise of online charting and check box medicine allows for more accurate billing and accounting. The highest paid employees in any hospital are unanimously MBAs. The loss of physician autonomy is occurring due to increased regulations that surround opening private practices. If medicine is enhanced by business, then the medicine we have today must be the best medicine that has ever existed.

    The issue that occurs when one mixes business and medicine is that it is dangerous to mix a profit-seeking entity with a field that has largely inelastic cost. How much will a person pay for life-saving treatment? Everything. This is an issue when there is a business on the other side that is trying to improve their bottom line. I agree that tenets of business should find their way into healthcare, but with extreme, extreme caution. When insurance companies are left to their own devices, they repeatedly cut coverage on life saving treatment any way they can in order to put more money into advertising, because that is their profitable model. Too much business in medicine is equally if not more dangerous than too little.

    • Rich Bottner

      I appreciate your closing sentence quite a bit and completely agree. Again, my argument is that business principles used appropriately can increase efficiency and lead to better patient care. It’s a balance but our education system and the attitude of many providers is anti-business. That doesn’t help either.

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