An article in CNN Money not too long ago entitled “Doctors Going Broke” really made me stop and think about how difficult it is to operate a medical practice.
There is no doubt that owning a medical practice may be one of the most challenging businesses out there, especially since physicians historically have little business training and virtually no control over costs or pricing. With sobering statistics like one from the Small Business Administration that says more than 50% of small businesses fail within the first five years, it’s a wonder doctors have survived as well as they have.
If a physician were to write a completely honest advertisement for a franchise opportunity, in fact, you could expect to read something like this:
Exciting opportunity in the ambulatory office space! Invest $300,000 and 6 years of your youth in grueling academic setting to obtain medical degree. Serve an ever increasing supply of unfunded clients who believe it is your obligation to provide service with no understanding of their financial obligation. Partner with insurance companies, who are well funded and outman you 10 to 1, to define your compensation plan. Bask in the glow of federal and state regulations that continuously increase government oversight and restrictions on the way you run your business. No business experience required.
Do you think the response rate would be low? You bet!
Given the state of affairs in healthcare, it’s a small miracle that bright people are willing to enter the practice of medicine at all. Having said all that, though, I routinely encourage my children to become physicians. Not because of the way I see healthcare today, but in light of how I think it will be in the future. Granted, as an entrepreneur, I tend to take an optimistic view of things, but I think there are some fundamental changes on the horizon that support this view.
There is a severe shortage of physicians in the U.S. and a growing population of patients. Soon, demand will outstrip supply; when that happens, prices will go up. Software as a service (SaaS) companies, blending service with technology, are helping physicians to better manage their practices, improving results and lowering costs. Analytics will level the playing field between payers and providers and enable physicians to share best practices.
I am also betting that technology will help to improve the results physicians are able to provide to their patients. If I’m right, I imagine that in a few years the advertisement for a medical practice franchise might read more like this:
Opportunity to make a substantial improvement in customers’ lives, while earning competitive salary, in an industry that has positive and sustainable growth for the foreseeable future.
Is running a medical practice difficult? Yes. But there are tools available even now that bode well for the business of medicine.