Lucrative Practices

The Comprehensive Handbook for Healthcare Executives

Michael Spellman

• Publisher: American Association for Physician Leadership
• Year: 2021
• ISBN:
  9780984831166
• Edition: 1
• Topic: Medicine
• Subtopic: Public Health, Administration & Care

Starting and owning a well-run, successful practice are two of the most rewarding activities in which a healthcare professional can engage. However, staying ahead of the curve in our ever-changing industry environment can feel burdensome and can be disheartening. The fact is that at the end of the day, clinicians are trained in their science, not in business. This can ultimately result in a costly, inefficient, trial-and-error approach to practice management.

Written as a business reference guide for healthcare executives, office managers and professionals in independent practice, Lucrative Practices includes detailed "how to" discussions and instructions, tips, forms, templates and guides that steer professionals away from problems and toward forward moving, financially successful management practices.

What will this book help you do?

• Organize, structure, and operate your business so that it is as profitable and rewarding as it can be.
• Learn from the successes and failures of others to avoid costly mistakes and make more profitable decisions.
• Free-up the time your practice deserves and needs to prosper by implementing the strategies in Lucrative Practices.
• Stay ahead of the curve in our ever-changing healthcare environment with "how to" instructions and discussions for all phases of private practice management.
• Maximize your practice's profitability by creating a buffer between managers and the financial challenges they face.
• Find new inspirations and renewed motivation to build your practices to the fullest, most lucrative, potential.

There is no substitute for knowledge and experience. No matter how bright and clever a manager is, they are destined to make costly errors and miss valuable opportunities if they manage through trial-and-error and best guesses. Lucrative Practices serves as a concise, practical handbook in which other people's mistakes and successes are synthesized.

Chapter 1

Becoming a Healthcare Entrepreneur

Your Vision Your Business Plan Naming Your Business and Choosing a d/b/a Legally Organizing Your Business Permits, Licenses, and Numbers

Professionals from every healthcare profession can successfully apply the principles of entrepreneurship to their businesses. Properly trained managers and support staff can increase their value to their employer by learning and helping to implement these same principles. Regardless of whether you are a current practice owner, an aspiring owner, a manager, or a support staff member, you can adapt qualities, perspectives, and ways of thinking to become a successful Healthcare Entrepreneur.

As a Healthcare Entrepreneur, you must expand how you think about your practice. This means adding a business dimension to your perspective, all the while pursuing your dreams, goals, and aspirations. Healthcare Entrepreneurs structure their businesses to maximize lifetime earnings; therefore, the primary financial metric is “What is the value of my company?”

Certainly, money is a part of your business’s value, but esoteric values such as quality of care also must be taken into account. Looking only at the money or only at the more personal values diminishes both. Attending to both enhances both.

When applied thoughtfully, the best business models in healthcare also result in the highest possible quality of care. In fact, failure to implement the principles of Healthcare Entrepreneurship can actually diminish the quality of care. An example comes from the professionals who must limit their time spent with each patient in order to see enough patients to make ends meet. Healthcare Entrepreneurs use business principles to remain profitable without having to cut clinically valuable corners or sacrifice job satisfaction.

Making the shift from traditional thinking to Healthcare Entrepreneurship thinking requires an ongoing commitment. Ingrained habits and the historical sociologic tenets of most professions may act as inhibiting forces. Fear of censure by your peers for opening new paths can compete with your desire to succeed. In reality, there is nothing to fear. Successful Healthcare Entrepreneurs tend to be admired by their peers and sought after by their patients.

As a Healthcare Entrepreneur, you will recognize that the business you own has value. How that value benefits you and increases your personal wealth depends on the decisions you make. Certainly, the salary, dividends, and bonuses you draw from the business are among the benefits. They are not the only considerations, however. Nor are they the primary considerations driving decisions. For example, as a Healthcare Entrepreneur, you may choose to take home less money in any given year so you can invest in equipment that will make a larger contribution to your personal wealth at a later time.

“A decent hockey player always knows where the puck is. Great hockey players know where the puck is going to be.” — Wayne Gretzky

This does not mean Healthcare Entrepreneurs ignore their annual profits; they keep their eyes on both their current profits and on the value of their business. Healthcare Entrepreneurs make business decisions by determining how their decision will affect the monetary value of the business over the near term and the long term. For example, consider a physician who has an option to purchase an expensive piece of diagnostic equipment. Over the near term, the cost of doing so will diminish net profits. Over the longer term, however, owning that equipment will likely bring in more patients, resulting in more profitable billings per patient and increasing the value of the business when it comes time to sell. All other factors being equal, the savvy Healthcare Entrepreneur likely will invest in the future and purchase the equipment.

Unlike business owners in other industries, far too many healthcare practitioners simply shutter a practice when they are ready to leave or sell the practice to a colleague at a price well below its true value. Healthcare Entrepreneurs are always tracking the value of their business and building that value. When the time comes to sell their business, they are in a position to profit and, in a very real way, keep profiting personally long after they have retired.

The healthcare industry is fraught with risks. Although some people choose to avoid thinking about them, no one in any business is immune from risks. Healthcare Entrepreneurs manage and master their risks by staying on top of the information flow regarding factors that impact their business and by making informed decisions. Likewise, they know their own level of risk tolerance and make decisions commensurate with that level.

There are no right or wrong levels of risk tolerance for a Healthcare Entrepreneur. For example, some adhere to conservative operating models; they will not enter a new market, offer a new service, experiment with new technology, or take other risks until the new market, service, or technology has proven itself. This approach reduces the risks but also tends to reduce the rewards. Other Healthcare Entrepreneurs follow an “early adopter” model. These professionals keep their eyes on future trends and consider the predictor variables that might help them “get a jump on” new trends that turn into profitable options. They maximize profits by staying ahead of the curve.

There is one exception to the “no right or wrong” principle of risk-taking in the business world: impulsivity. Certainly, there are Healthcare Entrepreneurs who tell tantalizing stories of a profitable decision made purely on intuition. Their success is a product of chance; if you roll the dice often enough, eventually, you will come up with snake eyes. Successful Healthcare Entrepreneurs know to walk away from the table when they experience such a fortunate gain. It is foolhardy to take the profits from random good fortune and re-invest them impulsively in another risky venture. Owning a successful business is hard work, and much of that work involves learning ab...

Table of contents

• Acknowledgments
• About the Author
• Chapter 1
• Chapter 2
• Chapter 3
• Chapter 4
• Chapter 5
• Chapter 6
• Chapter 7
• Chapter 8
• Chapter 9
• Chapter 10
• Chapter 11