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How did you doctors manage your private pratices during the first few years?
I am debating on whether I want to do hospital work and private clinic work after graduating from medical school. #medicine # #work-life-balance #social-work #college #working #work
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Jeff’s Answer
I kept expenses as low as possible without sacrificing quality. I worked very hard to maximize production. To do this, I hired the best staff. They are more expensive, but they helped maximize my production. My wife and I ate lots of spaghetti and oodles of noodles. In other words, we lived very frugally. I started to pay down my student and business loans. I worked my tail off.
Matthew L. Tuck, J.D., M.B.A.
CEO/Managing Attorney, Greater Detroit Area
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Matthew L.’s Answer
Hi William. Great question.
I would agree with Jeff's comments. Starting a private medical practice right out of medical school is hard. You probably have no clients, comparatively not much experience in medicine or running a practice, and you probably have a lot of debt. Be prepared to make very little money for the first few years until you have a decent number of patients and referrals coming in.
One great way avoid this lean period is to buy an existing medical practice. Buying a practice from a doctor who is retiring is a great way to get a thriving practice that already has trained employees, systems, equipment, patients and, most importantly, revenue. You can buy a practice and actually pay yourself a real salary right out of the box AND the seller will teach you how to run the practice, get new patients, accounting, handle staff, etc., before he or she leaves. Do your due diligence--not every practice is a good one. Don't buy a bad one. Buying is a much better option than starting from scratch, but everything I've written below still applies not matter what your practice is.
As to me and my background, I am an attorney with my own law firm, but I managed a busy infectious disease medical practice (6 doctors, 3 physician assistants, 2 RNs and about 8 staff members). I interacted with a lot other docs who ran their own practices and many who worked on staff in hospitals and for big practice groups. I saw a lot of different practice strategies. Some worked, some did not. The doctor I worked for loved practicing medicine, but did not like running the practice so he hired me to run it for him.
To really know what you should do after you graduate and finish your residency, you need to get to know yourself. It takes a special kind of doctor to successfully manage a medical practice of his or her own. You not only have to be great at the doctor part, but you also have to be a great business person. If you have one or the other but not both, you will fail (or just be broke, super stressed, miserable and over worked all the time). Many doctors (and lawyers and accountants) are terrible business people. They like doing the work (treating patients), but don't like the business side. And to run a small medical practice, you are probably going to be the CEO too. It will feel like you have 2 full-time jobs a lot of the time. By day you practice medicine and by night you run the practice (hire people, fire people, pay bills, do sales and marketing, manage the computer system, deal with accountants, lawyers and vendors and salespeople who constantly pester you to prescribe their drugs and buy their equipment). It's hard. It's nice if you have the cash flow to hire people do all those things, but most small practices don't, so you may wind up doing a lot of it yourself.
You also have to worry about all the expenses that come with running a small business: rent, salaries, student loan payments, insurance, office supplies, equipment, computers, etc. And all those expenses come before you get paid anything. You need to be able to handle stress. You may not always have money for payroll, key employees may quit or steal from you, computer systems crash, and you may get sued or have professional complaints made against you, no matter how careful you are.
This is why many doctors opt to join a larger practice group or go to work for a hospital. Larger practice groups have the revenue to hire people to handle the accounting, computers, insurance claims, compliance, billing, HR, sales, marketing, and everything else. It goes without saying that hospitals also have people to do all those jobs as well. You get to spend more time being a doctor, but in exchange you lose a lot of control. There are tons of rules you have to follow, lots of paperwork, you have to work with jerks (can't fire them if they don't work for you) and you become an employee. You have a J-O-B, not a business. Which may be okay if that is how you're wired.
This is why I say it's SO important to understand what type of person you are deep down. If you just want to practice medicine and treat patients and have no interest in the business side of practice, you're probably better off going to work for a larger practice or for a hospital (these days you can actually do both depending on your specialty--many larger practice groups are being bought up by hospitals, so you get the best--or worst--of both worlds).
Many doctors I know started working for a larger practice or hospital and realized they did not like all the rules and managers and difficult people, so they left and started their own practices. This approach has the added advantage that you get time to figure out how to practice medicine while working for someone else for a time. The ones who thrived (and this is just as true of the accountants, dentists and lawyers I know) were the ones who liked and embraced the business side of the practice. Even if your plan is to grow the practice and add other doctors so you can hire people to do all the things you are not good at or don't like to do, early on you will still need to embrace the business side if you want to survive the first few years.
No matter how good your medical school experience and residency are, you still have a lot to learn about the practice. It's best to learn while someone else is signing your paychecks and paying for your health insurance. You learn what to do and what not to do, so by the time you open your own shop you know a lot more about the practice. And in my experience, medical school and residencies don't teach you much about the business of medicine--and it is a business.
Starting a practice requires much more than just hanging up your "Doctor is In" sign. Most professional practices (doctors, lawyers, accountants, whatever), get their patients (or clients) in 3 ways (ideally you get them in all three ways so if one dries up temporarily you still have plenty of new patients coming in): (1) professional referrals from other doctors, (2) traditional marketing (web, advertising, your sign out front) and (3) referrals from current or former patients who are happy with your service. A new practice means no patients yet, so no referrals there. And you probably don't have too much money to advertise with either. So you have to network like crazy with other docs and people who can refer new patients to you. This can be hard if you're not good at networking. If you're shy or introverted, it will be difficult. So take this into account.
What to Do Now - If you are still in high school or college, take some business classes to see if you like it and have a knack for it. If you're going into medicine, you're probably good at math so accounting, finance and econ classes should be a breeze. Be sure to take some management, sales and marketing classes, too. You'll get the basics and will know whether you like this stuff or hate it. This may tell you whether having your own practice is for you, or whether you are better off working at a hospital or for a larger practice group.
And lastly, during college and medical school, practice networking like crazy. Join clubs. Socialize with other doctors or med students. Get good at it because your classmates may very well be your first source of referrals.
If you do choose to start your own practice, be ready to make mistakes. Business is hard. It's a lot of trial and error before you get it right. It's stressful running a small business, but so worth it. If you're cut out for it, you can design your own life, unlike when you are an employee of someone else.
Take business classes to find out if you like running a business. Take accounting, sales, marketing, and management classes. If you don't like those, you probably won't like running your practice either.
Network like crazy and get good at it. Your classmates in med school and undergrad may become your first source of patient referrals and the better you are a networking, the more referrals you'll get.
Talk to docs who run their own practices. See what they like, what they don't, and what they struggle with the most.
I would agree with Jeff's comments. Starting a private medical practice right out of medical school is hard. You probably have no clients, comparatively not much experience in medicine or running a practice, and you probably have a lot of debt. Be prepared to make very little money for the first few years until you have a decent number of patients and referrals coming in.
One great way avoid this lean period is to buy an existing medical practice. Buying a practice from a doctor who is retiring is a great way to get a thriving practice that already has trained employees, systems, equipment, patients and, most importantly, revenue. You can buy a practice and actually pay yourself a real salary right out of the box AND the seller will teach you how to run the practice, get new patients, accounting, handle staff, etc., before he or she leaves. Do your due diligence--not every practice is a good one. Don't buy a bad one. Buying is a much better option than starting from scratch, but everything I've written below still applies not matter what your practice is.
As to me and my background, I am an attorney with my own law firm, but I managed a busy infectious disease medical practice (6 doctors, 3 physician assistants, 2 RNs and about 8 staff members). I interacted with a lot other docs who ran their own practices and many who worked on staff in hospitals and for big practice groups. I saw a lot of different practice strategies. Some worked, some did not. The doctor I worked for loved practicing medicine, but did not like running the practice so he hired me to run it for him.
To really know what you should do after you graduate and finish your residency, you need to get to know yourself. It takes a special kind of doctor to successfully manage a medical practice of his or her own. You not only have to be great at the doctor part, but you also have to be a great business person. If you have one or the other but not both, you will fail (or just be broke, super stressed, miserable and over worked all the time). Many doctors (and lawyers and accountants) are terrible business people. They like doing the work (treating patients), but don't like the business side. And to run a small medical practice, you are probably going to be the CEO too. It will feel like you have 2 full-time jobs a lot of the time. By day you practice medicine and by night you run the practice (hire people, fire people, pay bills, do sales and marketing, manage the computer system, deal with accountants, lawyers and vendors and salespeople who constantly pester you to prescribe their drugs and buy their equipment). It's hard. It's nice if you have the cash flow to hire people do all those things, but most small practices don't, so you may wind up doing a lot of it yourself.
You also have to worry about all the expenses that come with running a small business: rent, salaries, student loan payments, insurance, office supplies, equipment, computers, etc. And all those expenses come before you get paid anything. You need to be able to handle stress. You may not always have money for payroll, key employees may quit or steal from you, computer systems crash, and you may get sued or have professional complaints made against you, no matter how careful you are.
This is why many doctors opt to join a larger practice group or go to work for a hospital. Larger practice groups have the revenue to hire people to handle the accounting, computers, insurance claims, compliance, billing, HR, sales, marketing, and everything else. It goes without saying that hospitals also have people to do all those jobs as well. You get to spend more time being a doctor, but in exchange you lose a lot of control. There are tons of rules you have to follow, lots of paperwork, you have to work with jerks (can't fire them if they don't work for you) and you become an employee. You have a J-O-B, not a business. Which may be okay if that is how you're wired.
This is why I say it's SO important to understand what type of person you are deep down. If you just want to practice medicine and treat patients and have no interest in the business side of practice, you're probably better off going to work for a larger practice or for a hospital (these days you can actually do both depending on your specialty--many larger practice groups are being bought up by hospitals, so you get the best--or worst--of both worlds).
Many doctors I know started working for a larger practice or hospital and realized they did not like all the rules and managers and difficult people, so they left and started their own practices. This approach has the added advantage that you get time to figure out how to practice medicine while working for someone else for a time. The ones who thrived (and this is just as true of the accountants, dentists and lawyers I know) were the ones who liked and embraced the business side of the practice. Even if your plan is to grow the practice and add other doctors so you can hire people to do all the things you are not good at or don't like to do, early on you will still need to embrace the business side if you want to survive the first few years.
No matter how good your medical school experience and residency are, you still have a lot to learn about the practice. It's best to learn while someone else is signing your paychecks and paying for your health insurance. You learn what to do and what not to do, so by the time you open your own shop you know a lot more about the practice. And in my experience, medical school and residencies don't teach you much about the business of medicine--and it is a business.
Starting a practice requires much more than just hanging up your "Doctor is In" sign. Most professional practices (doctors, lawyers, accountants, whatever), get their patients (or clients) in 3 ways (ideally you get them in all three ways so if one dries up temporarily you still have plenty of new patients coming in): (1) professional referrals from other doctors, (2) traditional marketing (web, advertising, your sign out front) and (3) referrals from current or former patients who are happy with your service. A new practice means no patients yet, so no referrals there. And you probably don't have too much money to advertise with either. So you have to network like crazy with other docs and people who can refer new patients to you. This can be hard if you're not good at networking. If you're shy or introverted, it will be difficult. So take this into account.
What to Do Now - If you are still in high school or college, take some business classes to see if you like it and have a knack for it. If you're going into medicine, you're probably good at math so accounting, finance and econ classes should be a breeze. Be sure to take some management, sales and marketing classes, too. You'll get the basics and will know whether you like this stuff or hate it. This may tell you whether having your own practice is for you, or whether you are better off working at a hospital or for a larger practice group.
And lastly, during college and medical school, practice networking like crazy. Join clubs. Socialize with other doctors or med students. Get good at it because your classmates may very well be your first source of referrals.
If you do choose to start your own practice, be ready to make mistakes. Business is hard. It's a lot of trial and error before you get it right. It's stressful running a small business, but so worth it. If you're cut out for it, you can design your own life, unlike when you are an employee of someone else.
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