Physicians, particularly those who haven’t received business education, must address the frequently circulated question among their ranks: “Can you practice medicine without money?” Medical history unveils an era when most physicians were compensated through non-monetary means for their medical services and often went unpaid.
During that time, the choice to pursue a medical career was grounded in the personal belief that treating patients was the foremost aspiration for most physicians. Few made this decision, and the majority anticipated fulfillment from it. Physicians resided within the lower middle class due to the unavailability of business education.
At present, most physicians still reside in the middle class of society. However, the medical landscape in which they practice has undergone a complete transformation. These changes have led to a significant loss of physicians for various reasons. Surveys indicate that about 65 percent of privately practicing medical doctors contemplate leaving medical practice. They find their medical practices inadequately profitable to sustain or achieve their objectives, thus joining the “burnout club.”
Private medical practices are collapsing because these physicians cannot generate the income required to sustain their practice or meet their obligations and goals.
Currently, we find ourselves in a situation similar to that of physicians in the 1700s—struggling to earn a livable income and compelled to tap into their creative capabilities to survive financially. This predicament remains despite their unique professional education and status, with a lack of business knowledge to pull them out of the quagmire.
Renowned author Nicholas Erik points out our failure to revert to the fundamental principles that have held true for centuries. These are the factors that remain relatively constant. Drawing from his AI experience, he believes in the potential to align our work and knowledge with the pace of technological advancement, building a sturdy career foundation.
Recognizing the significance of fundamentals highlights how often we overlook and neglect them. Many of us tend to bypass them, hoping that new tactics or tricks will miraculously yield improved outcomes. This phenomenon has indeed seeped into the medical education system.
I still find it astonishing that I spent four years in a top medical school in our nation, progressed through internships, residency training, and several years in private medical practice before realizing the necessity of a business education to achieve my goals. It’s astounding that I endured all of that without once comprehending the fundamental aspect of medical practice—managing a medical practice as a business.
Moreover, and more crucially, I committed the same oversight as the majority of medical students and young physicians still do today. Even as a more seasoned practicing physician, struggling with the realization that I had neglected the “other” critical fundamentals essential for a successful medical practice. I had never worried about or considered making a profit until it became an issue.
During the initial five years of private solo medical practice, as my income gradually increased, I never received any form of business education. The progress I made was more like a “placebo miracle” experienced by every physician in the early stages. “Hey, things are going great.”
Certainly, another business-savvy physician in my specialty required someone to handle the overflow of patients, and I can’t express enough gratitude for that opportunity. The presence of a new physician in the area is also a draw. Medical patients often seek out a new medical doctor to determine if they align with their treatment criteria, leading to an influx of new patients beyond the natural flow. This phase is exhilarating for both patients and physicians.
The issue arises when this excitement dwindles after five years. Income levels off, especially during certain holiday months. Patients depart from your practice, and the influx of new patients diminishes. However, you remain oblivious to this since you haven’t maintained records of new patients versus those leaving your practice each month. You believe you’re “doing great,” yet the attrition remains unnoticed. Why do we fail to perceive this? I certainly did.
Most private practice physicians receive monthly financial statements or printouts from their CPAs or accountants. Unfortunately, these summaries often seem of minimal value because, if the income figure surpasses the expenses, “all is well.” Few pay heed to the subtle messages scattered across the pages that hint at potential problems. Most physicians lack comprehension of financial statements, myself included. Despite being a proficient medical doctor, this doesn’t translate to improved financial outcomes.
Only when the office manager mentions that the practice’s income barely covers overhead expenses do you start to suspect something is amiss. Consequently, you review the last six to eight monthly financial statements from your CPA. A gradual decline in practice income becomes evident. You dismiss this as a temporary issue, believing that income will inevitably rebound. When this dwindling income persists for half a year, a significant concern arises, demanding action.
What no one informs you about, and what you’ve never questioned, is the deficiency in your office management. Unfortunately, your CPA, attorney, or office manager never raises a red flag. This predicament is yours to address, not theirs.
Once your practice’s income has decreased for six consecutive months, the likelihood of its total failure reaches 100 percent, unless you possess marketing knowledge to resolve the issue. Do you possess such knowledge? Unfortunately, most physicians don’t and have never grasped its significance. It’s one of the fundamental aspects of a prosperous business. Yet, even then, you might not have the resources to hire a business expert capable of resolving your practice’s business and financial challenges.
During my tenure in private medical practice from 1973 to 1994, I’m ashamed to admit that my lack of business acumen ultimately led to the demise of my medical practice. Only after retiring did I commit to understanding why my private medical practice career concluded in such a disappointing manner. My self-assessment of “I believe I performed well in my private medical practice” despite my business ignorance came to an abrupt halt upon retirement. Several attempts at online businesses failed, yet I did establish that anyone aspiring to substantial business success must possess foundational business education, either before or early in their business venture. The cornerstones of business success lie in business management and business marketing.
After dedicating fifteen years of retirement to studying and absorbing business principles, I finally found the answers I sought. I comprehended why, over the past century, countless physicians lost their private practices due to financial reasons. The absence of business knowledge and the utilization of business tools were the culprits.
The ultimate consequence of inadequate business education for physicians is a predetermined likelihood of failure to some extent in their medical practices. This is a truth medical schools inexplicably omit. Consequently, thousands of medical doctors have either forfeited their private practices over the course of a century or have struggled to subsist on an income comparable to that of blue-collar workers, rather than reflecting their value as elite professionals.
The current surge in physician attrition is evident. Men are deterred from pursuing medical careers. Documentation reveals stagnant physician incomes coupled with government-imposed fee limitations and financially unfeasible practice mandates.
Medical schools must integrate business education into their curricula to ensure the viability of our profession. Failing to do so will likely result in the assimilation of our profession into a socialized health care system. This compromise would undoubtedly erode physician quality and trigger the deterioration of health care nationwide.
I’m resolved to champion the inclusion of business education in all medical schools until my last breath. What about you?
Curtis G. Graham is a physician.h