Home > Medical/Health Commentary > Who’s afraid of the Big Bad Business of Medicine? (Part 2)

Who’s afraid of the Big Bad Business of Medicine? (Part 2)

The “business side” of medicine is every bit as important as the “clinical side,” and is decidedly not outside the legitimate purview of physicians.  Those who ignore it are not “purer physicians” than those who address it… if anything, those who ignore it risk doing a grave disservice to the patients they profess to put first.

In Part 1, I provided some examples of declining interest in the “business of medicine” among physicians, especially younger ones, in the context of a growing movement of physicians practices from physician ownership to hospital ownership.  We saw that some physicians see business issues as somehow less “pure” than clinical practice; that there is a sentiment that “practicing medicine” and “running a business” are distinct and separable endeavours, with many younger physicians strongly preferring the former to the latter; and that these tendencies are likely both causes and symptoms of a lack of familiarity or even interest in basic business, economics, and policy issues that affect the practice of medicine.

Why does this matter?  Over the past few weeks I’ve offered a few examples (here’s one) of how the business of medicine is inextricably linked with its clinical side, and the health and experience of patients more generally.  We live with a market economy, and medical professionals and practices are not exempt from the needs to pay the bills, to secure funding, and to abide by the various laws and regulations that govern the conduct of trade and commerce.

The basic truth is that a bankrupt medical practice is of no use to anyone, and cannot help any patient.  Nothing can change this fact.  If a physician wants to open a solo practice in a rural town that’s too small to attract a large medical group or hospital-owned practice, he will need to keep enough money coming in to keep the doors open.  If a physician wants the independence and autonomy to offer an alternate, innovative model of care that doesn’t fly with the large group in town, she will need enough revenue to keep the practice going.  Aspects of an office visit such as appointment length and scheduling, front-office staff accessibility and demeanour, and what insurance plans are accepted are all business decisions that affect the patient’s experience, and the nature and availability of clinical care.

One of the articles I linked to earlier points out that in larger private practices, physicians need not be directly involved with management (the nuts and bolts of running the enterprise), just governance (setting vision and priorities, making major personnel and other decisions, etc.).  However, in a smaller practice — for instance, the kind that might be sustainable in the archetypal under-served small town or rural area where there aren’t enough patients for a large group to survive — that choice isn’t there.  From its inception (business registration, filing status, tax registration) to its operations at maturity (personnel decisions, supplier contracts, practice marketing, contracting outsourced functions) there are real business decisions to be made at every step, and hiring a practice manager might not be feasible at that scale.  The physician-owner is ultimately responsible for all aspects of the practice’s operation.  Arguably, this is as it always should be.

The argument for physician ownership of medical practice is related, and addressed in part by a recent post of Dr. Rob’s explaining the necessity of private practice primary care to the health of individual patients, and the health system as a whole.  I agree wholeheartedly, and would add that the existence of private practice requires physicians to embrace the challenges and responsibilities of running a business, whether their role is one of governance, management, or both.

Physicians should be taught to embrace the business of medicine as part and parcel of their responsibilities to patients.  Being active in the governance and even the management of a practice reflects a commitment on the part of the physician to take responsibility, accountability, and leadership for every aspect of the practice that affects its patients.  It allows the physician to establish the necessary degree of personal autonomy needed to be sure that he or she can act in the best interests of the patient and not the employer or manager.  There should be no question that the clinical side of medical practice is affected by the business side; a physician who cares about his or her patients should strive to optimize both.

I’m enough of a libertarian to respect the choices of those physicians who walk away from the business side of medicine, for whatever reason.  It’s their choice, and I say power to them for finding a practice arrangement that is to their preference.  I certainly understand the host of factors that militate against increased physician involvement with practice management and governance.  That said, while I don’t judge or criticize the decisions of individual physicians, I deplore this trend in the aggregate.  Physicians, as those in the health care sector who should have the best interests of their patients closest to heart, should be willing and able to play a leading role in those businesses and institutions involved in their care, especially the medical practice in which the physician works.  If physicians, acting in their patients’ best interests, don’t take a leadership role, someone else will.  A wholesale movement out of this leadership role — leaving it to be filled by those who are responsible to others before the patient — would, in my mind. constitute a collective abdication of the profession’s responsibility to the patients that its members are supposed to serve.


“But wait, you never said anything about the health economics or policy stuff they teach us at medical school!”

Economics is to business as physics is to engineering, or as botany is to the Happy Hospitalist’s shiny new vegetable garden (which I hope to one day emulate in my own backyard).  My undergraduate background is in economics, but much as I love it, I recognize that it’s distinct from the issues of medical business that I touch on in this post.  Though I think that a background in health policy and economics would also be useful for medical students and physicians, I wouldn’t ascribe the same importance to it as I do to questions of actual business management and governance.

That said, many medical schools have begun to offer courses in health policy and economics, either as electives or as required courses.  This is a positive trend.  Knowledge of policy and economic tools and issues helps medical professionals to understand the larger system in which they work, how to analyze policy changes and trends, and how to think of the various market and government forces that do (or don’t) drive behaviour.  When conversations such as the recent health reform debate arise in the political sphere, economic and policy knowledge enables physicians to be more effective advocates for their  patients and their profession.  It also lets them collectively play an informed leadership role in such discussions, being able to move beyond parochial issues of pay reform (not that they aren’t important) and to make intelligent proposals as to how other parts of the health system can be improved (beyond the chorus of “insurers are evil”).  It is to physicians’ detriment that, as a whole, they were largely unable to provide a fully informed perspective in the recent debate surrounding American health reform.

  1. April 28, 2010 at 08:29

    I could not agree more that the business of medicine is inextricably linked with its clinical side. But let me add one more link. The business of medicine is also linked to the patient experience which influences the clinical outcome as well as the bottom line. Patients who have a positive experience with the practice encounter are much more likely to comply with medical orders including keeping follow up appointments and are more likely to tell their friends. The business has everything to do with the experience in how well you manage expectations, handle co-pays, and create seamless processes that ultimately build patient confidence in the practice.

    During our mystery shopping experiences we often uncover ways in which the business side dominates pieces of the encounter making the experience less than desirable. For instance, the practice wants to improve collections so they set up a policy to gather detailed information at the time of registration. That makes sense. But the caller (potential new patient) simply wants to find out how long the wait will be to get in for a physical. But before he/she can get any information about access, the attendant asks for social security number and insurance information. Which can make the caller feel uncomfortable since all he wanted was to find out about access. We find that in such cases, up to 25% of the callers state that they will not seek future care with the organization because they are more interested in the revenue than they are in answering their questions. Of course, much of the experience has to do with the skill of the person answering the phone and how they handle inquiries, but nonetheless, it is important to keep a balance between business objectives and the patient experience. Mystery shopping is a great way to get reliable feedback.

  1. July 10, 2011 at 23:36
  2. February 8, 2011 at 01:08
  3. January 23, 2011 at 01:14
  4. May 13, 2010 at 22:14
  5. May 10, 2010 at 00:28
  6. April 28, 2010 at 15:07
  7. April 28, 2010 at 05:18

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