Finding financial partners: Why physicians need a support team to sustain personal and organizational finances

Between pre-med tracks, medical school and residency, physicians have a long, concentrated education and training journey to professional life. The duration and intensity of focus on life sciences and clinical training leave little room for elective pursuits for most young physicians. Despite the training burden, a proportion of professionals find the time to pursue alternative passions of exercise, music, reading or other wellness fortifying activities. But it is quite rare for a physician to pursue financial education. Yet, whether in private practice, employed by a system or coming out of school deep in debt, physicians often find themselves hampered by a lack of financial literacy, experience and acumen. Clinician well-being can be further supported by providing financial resources supportive of professional and personal success.

In the Western Journal of Emergency Medicine article “Survey-based Evaluation of Resident and Attending Financial Literacy,” the authors indicated that only 9% of residents and 12.5% of attendings had prior formal financial education. Respondents shared that they were least confident about financial literacy regarding the stock market, applying for a mortgage and their own retirement. In addition, the participants strongly believed that financial independence and their finances were very important to their well-being.
In this article, we will highlight several avenues for overcoming this challenge that many clinical professionals face.

Finding partners

In private practice, find corporate partners — other MDs — to share financial burdens, risks and decision-making. In addition, find an administrative dyad partner with the business acumen needed to remain solvent and thriving in good times and bad. Second only to their possessing reliable skill sets, a partner's trustworthiness is crucial. The stories of mismanagement, fraud and theft among small medical practices are incredibly sad to hear when most principals are trying to do the right things for their community and patients.
U.S. medical practices lose $25 billion annually due to embezzlement. A Medical Group Management Association (MGMA) study of 946 practices indicated that 83% of practices were victims of embezzlement at some point in their operation. According to a 2017 study by Hiscox, as much as 5% of all embezzlement in the nation is in the health care industry. Practices stand to lose between 5% to 10% of revenue to fraud annually.

Auditors and system partners

Find independent audit partners to ensure proper financial controls are in place, maintained and “unbreakable.” This will fortify the structures needed to maintain regulatory and financial integrity and mitigate most risks.
Find system partners to supply, support and maintain information systems that meet today’s rigorous standards for regulatory scrutiny, revenue optimization and transparent reporting. Search for system partners who maintain shared ambitions for appropriate claim scrubbing, coding review, denial analysis, and who use artificial intelligence for efficiencies, precision, clinician well-being and staff augmentation. This is a sizable investment and a long-term decision. The selection process should be rigorous, including tightly managed requests for proposals, orchestrated demonstrations and rigorous reference checking (ideally including site visits of similarly situated clients).

Vendors and payers

Engage with vendor partners as needed to manage billing, receivables and bad debt as efficiently as possible. Although the administrative leadership may have excellent skills, some outside assistance will likely be required to effectively manage the ever-evolving revenue cycle tasks of operations. Keeping up with regulations, automation and processing efficiencies is critical to success.
Focus on payer relationships and payment arrangements, generating goodwill between provider organizations and payers. We can only succeed as an industry by seeking this end result, although it is aspirational, ambitious and often ephemeral. The “arms race” of denials-appeals ping-pong will mire the systems and processes in costs and non-value-added activities. Work with payers on denial reductions to avoid pulling vital resources from where they are needed — patient care.

Financial advice

Find financial literacy resources or advisory service partners that can help prioritize, guide and tweak the physician’s financial journey, whether the focus is on debt reduction, childcare, lifestyle decisions, retirement planning or legacy decisions. The comfort provided by increasing confidence that one is “on the right financial path” provides well-being improvements that support a clinician’s career satisfaction.
With the support of these partners’ respective relationships, physicians with and without financial skills can proceed on their journey with the hope of achieving success for themselves, their patients and their communities.

Jonathan Moss, MBA, FACHE, FHFMA, has devoted his 30-year career to consulting and support of health systems and physician practice management in the areas of financial sustainability and health care worker well-being.

Jerry Schreibstein, M.D., FACS, is a practicing otolaryngologist and president of Ear, Nose and Throat Surgeons of Western New England with over 30 years' experience in physician group practice management and an interest in physician personal finance and wellness.