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Patient Payments Blog

Why Many Doctors Ignore Business Issues And How To Approach Them With Change

Posted by Jim Turner

Oct 11, 2017 8:43:00 AM

“If it ain’t broke, don’t fix it” could be the by-word for many doctors when it comes to the business side of medicine. In my thirteen years in the industry, I’ve had a lot of conversations with doctors, administrators, and other industry professionals. When asked about the business side of the practice, I keep hearing that doctors are either uninterested or unskilled. It’s a wide consensus that doctors often ignore the business side as long as the bills are paid and they have a decent salary (whatever their definition of decent is).

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That conclusion would seem to hold based on the profit margins for medical practices reported in two different sources, one from 2013 and one from 2016. It seems that medical practices are fourth on the list of most profitable business endeavors. The only industries more profitable are Accounting/Tax Services at 18.4% (of course – accountants are supposed to know how to work the numbers!!), Real-Estate services at 15.2%, and Law Firms at 14.5%. An average medical practice realizes a 13% net profit. That’s over against the ‘average net profit across all industries’ of 10% in 2013 and 7.2% in 2016. Almost double the average in 2016 – NOT BAD!

Why would a doctor push to change the status quo when the numbers are so comfortable? The truth is, he or she probably won’t. Not only is the doctor comfortable, but he or she is frenetically busy. Doctors have very little time to devote to business issues unless and until the business model breaks. Many, perhaps most, don’t like the business side. They see it as a necessary evil. They just want to practice medicine. That makes things tough for you as the administrator. How can you get the doctor to pay attention to something he or she tries hard to avoid?

Know your doctor(s), partners, board. This is the key to persuading decision makers to consider the changes you think necessary. Are they competitive? Compassionate? Results oriented? Avoidant? Narcissistic? Staff centered? Whatever their primary motivator is, construct an approach that appeals to it. Like these approaches to the characteristics listed above. In each case, make sure you can prove your point with numbers and a process to get there.

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Competitive: The average net profit of medical practices in our town (or his/her circles of friends) is 13%. I have a way we can achieve 15% without much pain which will make us a top performing practice. Interested?

Compassionate: Our patients are having trouble in ___________ (example area). I’ve had an increased number of conversations with them about their struggles. I think we can help them without any downside to the practice. Can we set a meeting to discuss?

Results Oriented: Our numbers are presently _______ for ________ (back office business issue). They are not bad but I think we can move them upward to _______ (number) by _________ (date). This means that we will realize ____% more _________ (benefit). Do you mind if I make some changes to get there?

Avoidant: Just make it easy for them. Do all the leg-work and present them a finished plan that’s easy to sign off on. Anticipate all their objections and have quick answers.

Narcissistic: It’s all about them so make it all about them. How they will benefit in stature, income, prestige, or any other tangible benefit they adore. If they want the latest Mercedes, tell them how you will help them get it.

Staff Centered: We all love docs like this! Emphasize that your solution will maximize _______ (benefit) while making things easier on staff. Perhaps requiring less time, easing stress, resolving conflict, etc. When he or she hears that staff will benefit, the change you are suggesting will be easier to contemplate.


Regardless your doctor’s bent, you can find an approach that makes your solution more palatable. Take the time to think through what motivates your decisionmakers and then carefully craft your presentation. This approach may not win every time but it will stand a better chance than an approach that doesn’t consider your doctor’s motivations. Try it next time you need a decision made and see what happens. I’d love to hear!

Topics: medical practice management, practice management, Back Office Tips, change, Scripts

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