"The amount and method of your medical practice
marketing efforts should be directly coordinated
with the up or down economic stock market
trends because all practice marketing results
follow the trends and level of money flow."
Catch up or you will be forced to change your method of medical practice! Ever worry about the fact that your practice income varies directly with the economic trends and often drops year by year since you established your medical practice because of inflation.
Working hard to improve your income to compensate for that? Then, there’s the government continuing to restrict your medical fees... increasing those restrictions whenever they choose.
Then, there’s the problem of medical malpractice law protection using caps on pain and suffering which some states have in force, but almost all others will never let it happen.
It’s obvious that if you are relying on increasing your practice hours, work load, and patient flow each year above what you did the previous year in order to compensate for the factors causing your decreasing income... the bubble will burst! So, what will you do when it requires you to see 100 patients daily just to break even financially?
However, smart physicians reading this are about to discover a new critical view of medical practice business planning cycles. When your medical practice marketing efforts follow the world economy trends, and if you do any marketing of your practice at all with intention, you will be amazed at how much financial stability and income you can create for your medical practice business.
It always provides a cushion of income far beyond what other physicians experience who pay no attention to the economy.
For example, we are presently in a huge economic downturn (2021-22) where economic decisions can make or break you. The survival instinct kicks into action. You save money, cut expenses, and stop doing the 20% of things that cost you 80% of the overhead. That’s good, but going beyond those efforts requires a keen knowledge of economic cycles and trends in order to know what to do and when to do it.
A look at the years ahead using economic predictions and by following economic trends, economic cycles gives you an opportunity most physicians never consider for getting a tighter grip on medical practice success and income. The economist, Harry Dent, has traced economic cycles based on demographic statistics over the last century.
Not only have they occurred at predictable intervals, but also have well known cycle lengths and recovery phases. Economic cycles have an 80 year span which Harry Dent, Jr., a world renowned expert in economic cycles, has shown and proven by following the demographics of societies.
Drawing a bead on business cycles will be considerably more valuable to you than the advice of most financial advisors who deal only with your immediate future.
Your belief that national and global economics are simply chaotic and have no predictability, and that you have to ride with the tide, is far from the truth. Dent's predictions are rarely wrong, and at least far more reliable than anyone else. And, those predictions are based on what people do, where they move, what they want, and how they think, not on the GNP or census stats.
How to manage these economic effects on your practice...
These economic cycles have direct connections with and powerfully impact your medical practice business management and income.
Experts seem to agree that over the next three to four years any business (including medical practice business) should follow these financial guidelines...
- Hunker down over the next few years—till 2025.
- The state of the market economy in 2008 as mentioned below is very similar to today's market all over again.
If you own a medical office building, beware. Why? Because commercial real estate is now entering the phase of a drastic reduction in real estate values due to business bankruptcies we are told, which usually follows the residential housing price reductions after a short lag period of a year or so.
In the WSJ today (Oct. 2021) I read that people who are buying houses are being shocked by the banks that are now appraising homes well below the agreed upon sale price of the home, and makes the deal falls through.
Cash is king now and will be for at least 4 to 10 years while credit and borrowing are unavailable. In three or so years you can go back and buy your medical office building at half the price you paid for it, so they say. Lease or rent an office now, or save the cash profit you get from the sale and save it for 5 years or so when commercial real estate will be at the bottom and your cash will go a lot further. Dent's advice, not mine.
- Don’t spend money on major capital improvements for at least the next 3 years. Don’t buy new equipment, buy new cars (only lease it), expand your medical practice, buy a new home, upgrade to a bigger home, or jump into any investments such as the stock markets because cash accumulation now will put you far above those who aren’t saving cash.
Looking at the future demographics, if you are in the process of moving your practice or are nearing the time when you are ready to start medical practice, knowledgeable physicians will be choosing to practice in the suburbs (less crime, violence, and congestion) of growing cities of 700,000 to 1 million range population located away from the costal areas of the USA, and which have colleges, universities, and good life empowering facilities.
Demographic cycles reveal the migration of citizens to southern states, cities, and inlands where housing is more affordable, cities are growing with more jobs available, and taxes are less than costal states. It’s clear that those are the areas where medical practices will thrive the most, grow the fastest, and provide more income.
How to implement smart economic thinking for your medical practice management both now and from here on.
Too many physicians, if not all, were never taught how to run a business efficiently and profitably. It’s why there are so many physicians retiring with no retirement plan or resources of income for retirement. It doesn’t have to be that way. Ways to avoid those issues are many, and that kind of information is available on this website.
After making every mistake in the book about managing my own medical practice, I have come to believe that my benevolent, compassionate, inattentive, denial, forgiving, and accepting personal traits caused me to lose an overwhelming amount of income during those years of medical practice business and that I should have been more ruthless all along.
With that in mind, I would like to present you with some pointers and facts about truly successful medical practice business which will help you do much better than I did. Every physician has a unique set of ideas about what they want to do with their medical practice business planning and marketing, where they want to go with it, what goals they have for it, and how much work they expect to do to get there.
Think like this... (Dan Kennedy, business and marketing expert, speaks the truth)
- Three requirements for you when you have employees... Leadership, Management, and Supervision
- The relationship between employer and employee in inherently adversarial. Your agenda is completely different from theirs.
- Your business is your life and your life is your business. Employees are not your friends
or family. - Employees forget you are paying them to work and generate profits.
- You are under no real or implied obligation to make your employees happy or to like you.
- Your primary obligation is to yourself and your practice. If you forget that and you start to compromise your obligation by trying to be “liked” and be thought of as a “nice boss,” then you will, in doing that, let employees get away with things which will upset your goals for your practice, significantly reduce your practice income, and shortchange your obligations
to your family. - An effective boss is one who sets and enforces standards and procedures in order to create maximum possible profits. Isn’t that why you are in the business of medicine? You can remove the guilt of feeling you’re in medical practice to earn income only, by understanding you can provide more and much better care of your medical patients when you are earning your maximum income than you can do by charitable work in healthcare.
- What kind of employee do you want? There’s only one answer to that... a profitable one.
- It’s not your responsibility to provide Mary with a job, nor pay her enough to support her family and dog. It’s Mary’s responsibility to make herself so valuable, your business can’t live without her. The only reason to keep Mary around is profit.
The above comments perhaps will insult a third of readers. Another third will attempt to rationalize them. And, the final third will understand that the business logic is there, but the complexity of the issues need more explanation, debate, and discussion.
Are you the frog in the pot of hot water? If it recognizes the heat will jump right back out again. Or, are you the one that got in the water when it was cold and as it got to a boil, the frog never
left the water?
----Professional Probe----
"You may not have a farmer background,
but your medical practice business
is your "cash cow."
The idiots who accuse you of being a greedy medical doctor because you are using your medical practice business only to make money your priority, need a bit of instruction about the complexities
of business hierarchy.
Keynes writes, "By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens." The objective for physicians in these chaotic times should be to make every effort to reach their maximum increase of income, the quickest and easiest ways, which up to today has been to increase the source of income, new patients, to "burnout" producing levels.
So what do we do about that? When desperation reaches its highpoint, we suddenly begin to consider all alternatives. The trouble is that nearly all profitable alternatives for income for physicians come from outside medical practice businesses. The trouble is, it requires either quitting medical practice, starting a new business or profession that physicians are not trained for, or being clever enough to run two full time jobs at the same time.
The one necessity to resolve all of those issues is to have had an academic business and marketing education. Physicians do not have that. If you want to help solve the income problems with physicians, you need to read my book, THE WOUNDED PHYSICIAN PROJECT---second edition upgrade.
Articles © 2013-2022/CGG INVESTMENTS LLC. All rights reserved. #7, 3-15-22.
