Make no mistake – a private medical practice in the community is a ‘customer’ focused, service-oriented small business. While the mission statement should emphasize providing the best possible patient care for thousands of sick patients in need, you also need to be driving a profitable business where 2-100+ people make their living. In the first of this small 2-part series on why physicians have difficulty running medical offices, we will look at how a clinic is different from most other businesses.
Many of us had part-time or full-time jobs prior to starting residency, usually in the retail or service sectors. To highlight the differences, let’s arbitrarily make a comparison between a medical office and a bakery.
Patient-centric care: A bakery needs to cater to its customers, who have happily chosen to visit to get a treat. A visitor to your clinic is generally in need of essential care, and may be in pain and distress coming in the door. The patient may be in the middle of the worst day of their life, suffering while you explain to them and their family that they have metastatic lung cancer (as a Respirologist, I had to deliver that news too many times).
Regulations: A good bakery will create a welcoming environment, focusing on comfort to entice customers to come in and linger. While there are certainly rules around food handling, a medical clinic (especially one where procedures are done) is subject to a strict set of highly regulated laws encompassing health and safety for the patient and staff, as well as ensuring patient confidentiality.
Revenue: If the price of flour goes up, you as the baker can increase the price of a loaf of bread by a nickel to compensate (i.e. pass the price increase on to the consumer). Anyone who runs a medical practice can tell you that the cost of staff salary, rent, utilities, equipment, disposables, insurance, etc. continues to escalate yearly, often faster than the rate of inflation. However, since the revenue of a Canadian MD is fixed by the provincial government, the only ways to keep up with rising costs are to see more patients, do more procedures, work evenings and weekends, and hope that provincial fee increases materialize. Budgeting is made more complicated by the time lag between service (seeing the patient) and getting paid; this time lag can be weeks to months. Fee codes are sometimes rejected or downgraded, requiring administrative time to ensure correct payment.
Liability: If the counter person at the bakery accidentally gives you 13 doughnuts instead of 12 (or worse, only 11 doughnuts), it’s not a huge deal in the grand scheme of things. At a medical clinic, every decision is scrutinized, as even small errors can lead to patient harm with lasting consequences.
Employee Skill Level: A bakery will happily accept a 16-year-old co-op student from a local high school; if they are not performing up to par, the school will send a replacement the next day. Staff turnover in your clinic is not as well tolerated. Allied health care professionals such as nurses have had rigorous training and certifications. Many of them (particularly technicians like echosonographers and respiratory therapists) are highly in demand. Losing a key allied professional can paralyze a clinic’s patient throughput and testing volume.
Scheduling: If you owned a bakery and were making the staff schedule, you would add more employees during busy times of higher customer demand, which is relatively predictable week to week. If you have seen the colour coded nightmare of a schedule on an EMR, you will know that scheduling can be a full-time job in a large medical office. Scheduling a patient depends on physician and technician availability, and requires triage to determine how time sensitive the appointment needs to be. A clinic’s patient flow directly impacts the quality of care a patient receives, as well as the financial bottom line.
Marketing: To meet the goal of a solid base of returning customers in a bakery, the owner can use aggressive advertising, promotions, loyalty programs, and social media. The marketing of a new medical clinic is very limited due to ethical standards and patient privacy. On the plus side, you could argue that there seems to be an unlimited number of patients.
Record Keeping: A baker needs to maintain records of sales, inventory, and customer data for the loyalty program. A medical clinic is held to a much higher standard. Detailed patient records are essential for continuity of care, legal compliance, and billing. The records are also protected by law, and are subject to audit at any time for 10+ years.
So, as you can see, a community private medical practice is unique in the sense that it serves both as a patient care centre for sick people, and (hopefully) a profitable small business. This is not to dissuade you from taking on the challenge of being the point person and owner of a medical clinic, but you should know what you are getting into (and maybe consider bringing in some professional management). In the next instalment of this 2-part series, we will examine why MDs may be uniquely unsuited to running a medical practice.
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