Today, I want to shed light on an often overlooked aspect of the healthcare industry - the role of physicians as entrepreneurs. The practice of medicine, much like any business, has evolved significantly in recent years.
Understanding business aspects, managing teams, and exploring various practice models are becoming increasingly important for physicians to thrive in a changing healthcare landscape.
The Physician as an Entrepreneur
Traditionally, physicians were perceived solely as healthcare providers. However, they are also entrepreneurs in their own right. Here's why:
Running a medical practice involves financial management, budgeting, and strategic planning. Physicians must grasp these business aspects to ensure the sustainability of their practice.
Like entrepreneurs, physicians need to adopt a customer-centric mindset. Patient satisfaction and experience directly impact a practice's success and reputation.
As part of the ACA's Hospital Value-Based Purchasing Program, the Center for Medicare and Medicaid Services (CMS) is withholding 1 percent of Medicare payments—30 percent of which is tied to HCAHPS scores—to fund the incentives of the program.
There are 29 HCAHPS questions in total, such as doctor and nurse communication, staff responsiveness, the hospital environment, pain management, medication communication, discharge information, care transitions, overall rating of the hospital, and likelihood to recommend the hospital to name a few.
Additionally, providers are constantly ranked on a 5-star scale with comments to boot, resembling a reviewing process akin to evaluating a product or service on an online marketplace.
Managing a healthcare team is similar to leading a small business. Effective leadership is crucial for creating a cohesive and efficient practice environment.
Employee retention is a huge issue in healthcare. Limited skilled workers requires has created a public health emergency.
The healthcare landscape is dynamic. Physicians must adapt to changing regulations, technologies, and patient expectations, much like entrepreneurs in other industries.
Challenges in Private Practice
While private practice remains a popular choice for many physicians, it's important to acknowledge the challenges:
The rising costs of healthcare, insurance, and administrative burdens can strain private practices' financial viability. The average cost of an electrical medical record is between $50k and $500k, depending on functionality.
I am sure some are saying, "well, don't buy it!"
The federal Health Insurance Portability and Accountability Act (HIPAA) in 1996 led to additional laws mandating electronic medical records.
These laws aim to standardize insurance claims, to make medical records more portable, and to eliminate medical errors.
Don't even get me started about other individuals quietly undermining the healthcare market, increasing healthcare costs for everyone for self gain.
Navigating healthcare regulations and compliance requirements can be overwhelming, requiring additional time and resources.
Lastly, the landscape is increasingly competitive. Healthcare systems and large corporations are expanding, making it harder for small practices to compete.
The Physicians Foundation, which conducts surveys of America’s doctors, found that 62% of physicians were independent in 2008. By 2014 that number had dropped to 35%—a precipitous decline in such a short timeframe, according to Forbes.
A 2012 survey by the Doctor Patient Medical Association found that 95% of physicians see corporate medicine supplanting the traditional private practice.
Thriving in a Changing Landscape
Making it in today's competitive healthcare market as a private practice provider requires a combination of strategic planning, adaptability, and a patient-centric approach.
Here are strategies for physicians to thrive as healthcare entrepreneurs:
Offer Exceptional Patient Care
Focus on delivering high-quality, patient-centered care. Excellent clinical outcomes and satisfied patients can lead to positive word-of-mouth referrals.
By mandate, invest in electronic health records (EHRs), and telemedicine (not mandated) to enhance patient experience and streamline administrative tasks. Implement a user-friendly patient portal for appointment scheduling, access to medical records, and secure communication.
Efficient Practice Management
Optimize office workflows to reduce administrative burdens and wait times. Consider outsourcing certain administrative tasks, like billing and coding, to specialized services.
Create a professional website that showcases your services, staff, and patient reviews, like Dr. Babak Azizzadeh. Leverage social media platforms to engage with patients and share relevant healthcare information.
Marketing and Branding
Develop a marketing strategy that highlights your unique value proposition - I wrote about value proposition a few weeks back. Consider running targeted online ads, community outreach programs, or referral marketing initiatives.
Foster patient engagement through regular communication, educational materials, and wellness programs. Solicit feedback from patients and use it to improve services.
Network and Collaborate
Build relationships with local healthcare providers, specialists, and hospitals. Collaborative partnerships can lead to referrals and shared patient care. Not virtual visits - in-person visits! Build a relationship.
Ensure sound financial management by monitoring revenue, expenses, and profitability. Explore different payment models, including insurance contracts, direct primary care, or concierge medicine.
Stay Informed and Compliant
Keep up-to-date with changing healthcare regulations and compliance requirements. Attend relevant conferences and join professional organizations for ongoing education.
Engage with the local community by participating in health fairs, offering free health screenings, or providing educational seminars. Building trust within the community can lead to increased patient loyalty.
Consider offering a range of services, such as preventive care, wellness programs, or telemedicine options, to attract a broader patient base.
Participate in quality reporting programs that can enhance your reputation and potentially lead to better reimbursement rates.
Adapt to Market Trends
Keep an eye on healthcare trends, such as value-based care and population health management, and adjust your practice model accordingly.
Encourage a culture of continuous improvement within your practice. Regularly assess and update processes to enhance efficiency and patient satisfaction.
Patient Access and Convenience
Offer flexible hours, same-day appointments, and online scheduling to accommodate patient needs.
Efficiently manage overhead costs, negotiate favorable vendor contracts, and explore group purchasing opportunities to improve profitability.
Develop a solid financial plan that includes budgeting, savings, and investments to ensure the long-term sustainability of your practice.
Remember that success in the competitive healthcare market often requires a multi-faceted approach.
Continuously seek opportunities for growth, be adaptable to change, and prioritize delivering the best possible care to your patients. Building a strong reputation for quality and patient satisfaction will ultimately be one of your most potent assets.
As the healthcare landscape continues to evolve, physicians must embrace their roles as entrepreneurs.
By understanding the business side of medicine, adapting to change, and exploring innovative practice models, physicians can not only survive but thrive in a dynamic and challenging healthcare environment.
The heart of entrepreneurship lies in innovation and adaptability - qualities that are just as relevant in medicine as in any other industry.