These practice management pearls are derived from Medical Economics' readers and editorial board members and reflect years of experience.
Medical school and training teach you a lot-except how to be a successful businessperson. You learn that on the job by running your practice or serving in a managerial role. These practice management pearls from our readers and editorial board members come from experience. And, as the late author Clarence Shepard Day Jr., said in The Crow's Nest: "Information's pretty thin stuff unless mixed with experience."
OPERATIONS | CASH FLOWNo one will watch your money like you do
My Grandfather Otto taught me, "No one will watch your money like you do." In business, this means no one has your best interests at heart like you do. Further, if you don't pay attention to your money, someone else will. What does watching your own money mean? Answer:
If you know how to watch your money, and you take care of your patients, then your medical practice can achieve great success.
Where does your revenue come from? Most revenue comes from insurers. Read those EOBs (explanation of benefits) attached to payment checks and you quickly will learn a lesson in who pays and who does not. When you discover how you're paid, you will:
Every dollar saved in overhead is a dollar in your practice's pocket. Scrutinize overhead. Care about staff numbers, the bank fees, rent, phone, and the IT bill. Eliminate unnecessary overhead, but don't skimp where you shouldn't; you need to spend money to make money. I spent plenty to convert my practice to concierge medicine but broke even on those expenses in just 6 months, and while practice revenue did rise, my largest increase in income resulted from reduced overhead.
Not watching your money can cost you plenty. If an employee watches your money more closely than you do, look out. That money will walk right out the back door. None of us is immune to embezzlement, so set up as many safeguards as you and your accountant can possibly imagine. Doing so sends a cautionary message to all employees and reduces the odds you become a victim. Make sure your employees know you watch the money.
Caring about business will expand your career options. My career goal is to practice the best possible medicine in an enjoyable practice with optimal professional and financial rewards. I started in academic medicine, followed by group practice, then solo, and finally concierge solo medicine. Focusing on taking care of my patients and on the business led to career and financial advancement. Your final career destination could depend as much on your business skills as your medical skills. Watching your money is business skill #1. Learn this skill.
I respect my grandfather's wisdom. He founded his tire store in Kalamazoo, Michigan, 78 years ago during the Great Depression. Three generations later, the business is still strong and still bears his name. My best business lesson came from my grandfather, not medical school. No one will watch your money like you do.