Concerns over administration, finances, medicare cuts, marketing, building referral networks and the fear of working a 70 hour week is steering many young physicians away from medical practice ownership. The older generation is feeling the same pressures as they shutter their practices and these physicians join the ranks of large groups with big marketing budgets, referral networks that are pre-developed, and often hefty compensation packages.
Young physician residents are ready to practice medicine but they want nothing to do with the business of medicine. For stats on this check out Healthcare Reform Influencing Physicians’ Career Choices.
THIS WILL ALL CHANGE!
A bold statement considering the current healthcare system and forthcoming changes being imposed by the government? Absolutely. However, you’ve got to look at demographics to some degree and the psychology that developed the mindset in different age groups.
Lets start with the older generation. 30 years ago, it was a given that a graduating physician could open their own practice with a reasonable expectation of financial success and an opportunity for lifestyle design. Insurance companies enabled a greater autonomy that allowed the physicians to make decisions with a significantly lower level of interference from payors.
Second, we look at the young physicians of today. They came up through a time of economic boom where many developed a sense of entitlement. I’m of this generation and saw many of my peers (and myself) get knocked off of their feet when the recession hit. We’d never lived through anything like this and the high interest rates of the 80′s were a foggy memory at best. Suddenly we clamored for any sense of stability so that we too could some day have a retirement opportunity.
What happens in 10 years? This is why I say private practice will re-emerge but in a different form than it exists today. A year ago, I had a discussion with a few 18 year olds. They had very little sense of entitlement like my peers when I was 18. They knew they weren’t going to go make 3K-4K a month part-time like I did at that age. The difference is they knew it wouldn’t happen from a job. This generation has been forced to look for new ways to create income and to question the old models.
From personal experience, I can say that traditional logic no longer works. Going to college in hopes of attaining a high income is an outdated philosophy that leaves you with debt and at the mercy of industry. The youth of today wants more. Their entitlement includes more than financial success. They want a lifestyle that provides freedom and flexibility with their time.
So what will this new private practice look like? It’s available to private practice today!
1) It will not be enough to expect insurance companies to provide your income.
2) Ancillary streams of revenue are vital.
3) There will be greater connection with patients. This is something we see in concierge medicine now.
Do you see a pattern? The new business of medicine will have a great chasm. On one side is those with standard insurance (possibly Obamacare). On the other side is patients who want deeper relationships with their provider and have the financial means to get the higher standard. This group will have access to tests that insurance doesn’t cover. They will get nutritional scans, supplements and medicines that providers in large insurance dominated organizations may not even know about.
Finally, the private practice physicians will have multiple streams of recurring income. They will have no fear of layoffs, downsizing, or where income will come from at retirement. They will be in short supply so the demand will be strong and they will retire sooner than their peers that chose employment.
I’m always in the hunt for new revenue streams to make this new private practice a reality for physicians today.
There are 3 requirements.
1) Provides quick ROI
2) Provides residual income
3) Improves Quality of Care
As always, this article could go on indefinitely as this is a broad topic.
What is the best income stream you’ve seen at your practice? Share in the comments below.