Understanding the business of medicine: How to pursue excellence in the medical field

Your success in the medical field is not solely contingent upon your clinical dexterity but often results from the mastery of various industry aspects. What separates a great doctor from a good doctor is their cognizance of both the clinical and business sides of medicine. The market, risks, and trends of medical businesses are a great resource for residents as they establish their place in medicine. Business management is a huge component of an outstanding medical institution. Still, medical schools seldom teach you how to properly run a business despite its substantial impact on many aspects of your profession!

What do I need to know?

  • Practice proper business maintenance techniques, such as inter-organizational communication and financial management.
  • How to track your income, expenses, and revenue.
  • What regional physicians with similar credentials and specialties charging for services.
  • The fundamentals of financial literacy and basic business jargon.
  • How to use financial statements, such as balance sheets.
  • How to file and maximize your business taxes.

Basics of business literacy and business-mindedness

According to Kyle J. Anderson, a business school professor at Indiana University, business-minded physician stands out from the crowd because they “have the tools necessary to transform (their) practice, hospital, or other clinical setting from average to exceptional.” To be business-minded is to analyze and convert information into strategies that promote an enterprise’s profit and efficiency. Business literacy is being knowledgeable on running a business: How to file taxes, how to manage finances, investments, understanding the lingo, and so on. Being business-minded is impressive in solidarity, as is business literacy, but you become a valuable asset to any team when you put them together. Within the medical industry, physicians who possess both qualities are far more likely to maintain excellence.

How will knowledge of medical business benefit me?

  • Comprehending the risks will eliminate financial or legal liabilities.
  • By following trends, you will naturally generate more revenue.
  • Maintaining organization in all aspects of your finances (invoices, taxes, reimbursements, etc.) prevents stress and disaster.
  • Understanding the regional market will prevent you from undervaluing your abilities without overcharging: Know your value.

The defining characteristics of an exceptional clinical practice begin with the quality of care provided. Your staff should shower every patient with hospitality, the doctors should be highly accredited, and the business should like a well-oiled machine. This is only possible if the clinical management works intentionally and business-mindedly. A business-minded physician would note how the transparency within employee communication, the consistency in customer satisfaction, and other tendencies of their business. They would then compare their microcosmic evaluation to that of competitors and regional averages to track performance and adjust accordingly. Any good business constantly strives to improve, innovate, and excel- medical businesses are no exception. Understanding the market can radically shift the trajectory of success for a business if the information is used strategically. Sequentially, doctors, particularly those operating private practices, must evaluate the trends, patterns, and risks of the market in which they reside.

There is a lot to tackle in the medical business world. Still, if you start now, your business literacy can drastically impact your prosperity as a doctor and subside the stress of running a business when the time comes. Regardless of what medical facility you work for — be it a public hospital, a private organization, or a private practice — a thorough grasp on the medical business will contribute to your pursuit of excellence.

Todd Skertich is a health care consultant and can be reached on Twitter @adventuresinmed.

Image credit: Shutterstock.com

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