Shift from Provider to Entrepreneur to Save Your Practice
Like many healthcare professionals, you probably entered into medicine, first and foremost, to heal. However, the landscape of healthcare is rapidly changing. Yes, compassionate care and effective treatment is still a component, but many providers need to change their mindsets in order to survive.
A lot of what's changing in healthcare right now is out of your hands including expanding corporate models, increasing administrative duties, and changinging insurance regulations. These changes are continuing to shake up the system.
Here’s the long and short of it all…healthcare is a business and many practices find themselves struggling to survive. Honestly, the real struggle isn’t always about providing care, it’s often the day-to-day operational headaches and financial obstacles that make things tough.
In the past, physicians could rely on the quality of care to satisfy patients and thrive in practice, but that has changed with modern medicine. Being a provider is simply not enough, success lies in acting and thinking like an entrepreneur.
Are You a Physician or a Business Owner?
No matter what else is going on in your practice, at the heart of the matter, you are a physician. Your education, residency, and clinical experience is what makes you a true medical professional.
Even with all your years of education and training, one big missing piece to the puzzle is knowing how to actually run a successful healthcare business. It’s not that you can’t learn these skills, it’s just that it probably hasn’t been the focus of your education up to this point.
When you’re seeing patients, you’re focused on giving personalized, patient-centered care. But once you step into the role of a business owner, things get a lot broader, expanding beyond patient care. You’re not just thinking about your patients’ health, but also about managing the day-to-day operations, keeping an eye on finances, handling marketing, reaching out to new patients, and dealing with whatever challenges pop up along the way. It can be a lot.
This is where a mindset shift becomes essential, and learning business fundamentals comes into play. Making the switch from doctor to business owner means you’ll need to start thinking a little differently.
Key mindset shifts from doctor to business owner include:
Looking at the big picture and adopting a long-term strategy instead of focusing solely on day-to-day-operations
Implementing systems and processes to make things run smoother and ensure better results
Basing decisions on data rather than gut feelings
Calculating risks to spot and create growth opportunities for your practice
It’s important for you to remember that your clinical expertise and business leadership skills actually go hand in hand. Combined, they work together to help you build a thriving practice.
Why Financial Literacy is Important
Did you know high patient volume does not automatically guarantee financial success? If you think it does, you are actually creating a false sense of security for yourself. Before you realize it, cash flow problems and debt can put your practice at risk, leaving you to take immediate action just to stay in business.
A basic understanding of the following financial principles can put you ahead of the curve:
Revenue Cycles and Cash Flow
Payer Mix
Profit Margins
Debt Management
Reimbursement Analysis
Overhead Expenses
Financially savvy physicians are better prepared to ask the right questions and make informed business decisions. It just makes sense. When your practice is on solid footing, you’re in a much better position to take care of your patients and support your staff for the long-term.
Making Sound Business Decisions Without Compromising Care
The mission for any practice should be to deliver exceptional patient care, meaning business and clinical decisions need to be aligned to keep the mission the core focus.
Practices that are financially sound and operationally efficient can:
Recruit and retain exceptional employees
Better embrace cutting-edge technology
Expand patient access for improved convenience
The clinical mission must always be supported by a strong business foundation.
Business Mistakes That Put Your Practice in Jeopardy
Recognizing common risks is important. Some include:
Refusing to delegate - With a competent staff, there is no need for you to micromanage administrative decisions and non-clinical operations.
Having an ineffective marketing plan - Relying on referrals is not the best way to do business. A proactive marketing strategy including relevant and consistent content, a digital presence, and effective patient engagement are all vital to long-term success. Plainly said, you need to let patients know that your business exists.
Undercharging for services - A market analysis can help to determine competitive rates. You should have a general idea as to how much your competitors are charging.
Strategic planning - Focusing too much on day-to-day operations and not looking towards the future can result in serious consequences for your practice. Forecasting is important for growth.
Weak negotiation skills - It’s important to understand the terms of your insurance contracts to achieve and maintain profitability.
Finding Success as a Provider and an Entrepreneur
To keep your patients healthy and feeling good, you are trained to diagnose and treat symptoms. Remember, you don’t have to choose between being an excellent physician and a successful business owner/entrepreneur. These days, you need both skill sets to succeed and set your practice up for long-term success.
Learning to identify and address business inconsistencies allows you to achieve financial health and long-term sustainability.
What does thinking like an entrepreneur help you to do? It empowers you to establish a sustainable business model that consistently achieves both clinical and operational excellence. You put yourself in a great position to support your patients and staff both today and in the future.
