With all of the resources available today, you can take action and improve the financial health of your practice. You'll be better armed to protect yourself against fraud and theft in your practice and your individual financial life making the right business decisions. There follows what you need to know to be financially healthy.
Imagine you’re early in your medical career, such as a medical student, and you are getting ready to see a patient. You glance over their chart before you walk into the exam room. Their vitals look fine. Then you flip to the results of the laboratory blood work. You glance over the paperwork, hoping the report has normal values listed, or better yet, the report will flag anything abnormal.
The reports from this lab don’t do that. All you get is a number. What do you do? Do you shrug your shoulders and determine the patient is fine and send them on their way? Alternatively, do you hit the pause button, research, and learn how to use the lab results, so you make the best decision for the patient? A competent medical student, who is hoping to be a successful physician, would take the time to learn how to interpret the lab values and incorporate the data with other findings. You want to solve the real problems your patient is facing.
Unfortunately, we physicians take a different approach when it comes to the financial health of our practice.
I’ve worked with many physicians who treat their practice as the patient above. There doesn’t seem to be any problems on the surface. The financial reports are complicated, intimidating, and challenging to understand. Many will shrug their shoulders and move on, and they will miss finding the real problems affecting their practice. We wouldn’t do this with a patient, and we shouldn’t do this with our business.
Get the Knowledge
With all of the resources available today, you don’t have any substantive excuse not to improve your financial intelligence. You can pour over various websites and piece the information together. Alternatively, books such as mine will help you take the step to raise your financial intelligence level.
This isn’t a sales pitch for my book. Instead, my goal is to motivate you to take action and improve your financial intelligence. I believe there are three significant reasons why you should begin to study this critical information.
First, it will teach you a different way of thinking about money. How you view money in your business is likely how you see and handle money in your private life. What’s your individual financial life like? Are you making good decisions? We will view money problems at home the same way we view money problems at work. If we can improve our financial intelligence at work, that knowledge and experience will carry over into our personal lives. Improve in one area, and it won’t be long until you see improvements in other areas too.
Second, understanding financial reports will help defend you against less-than-reputable investors. You will know how to read their financial statements and prospectus. When things don’t make sense, your “spidey senses” will go off. Remember, not every huckster can be easy to identify. Bernie Madoff wasn’t as he fleeced many wealthy, supposedly smart investors. A few folks tried to sound the alarm, but most of his clients were happy and didn’t dig into the numbers. He was counting on their lack of financial intelligence so he could line his pockets with their money.
Third, you’ll be better armed to protect yourself against fraud and theft in your practice. The most common fraud occurs in the back office of small businesses where only one or two people have access to and handle all the money. If you cannot read and use financial reports, it becomes much easier to steal from you.
Finally, and most importantly, your patients need you to be financially healthy.
Your Practice is More Important Than Your Patient
I would argue understanding the financial health of your practice is more important than patient care. Without a solid knowledge and understanding of your practice’s financial matters, you put your patients at risk.
Your practice will need to be profitable if you want to continue to serve your patients. Why? You’ll need capital for improvements and investments in new and safer technologies. You’ll need money so you can attract and retain high-quality personnel. Today’s profit is tomorrow’s capital for investments. Without profit, you’re at risk of hurting yourself, your employees, and your patients.
Consider what happens to your patients and employees when you can no longer keep the doors open? Where will they go? Who will take them in? Who will provide them care? With financial intelligence, you’re doing your patients, employees, partners, and yourself the right thing because you will make the right business decisions.
Get financial intelligence today and use it to determine the financial health of your practice. Feel free to reach out to me should you have any questions. I’m more than happy to help. 1
David J Norris, MD, MBA
© David Norris, LLC, 2020