With the ability to spend millions of dollars yearly, large hospitals or health care systems have the ability to collect, analyze, and organize data, while reducing waste and increasing profits. Unfortunately, many private practices do not have millions to spend on effective reporting. Many physicians are in a financial fog and unable to have a clear view to make real-time decisions that can benefit their medical practices. However, with some basic knowledge of where to turn for help, a physician can make the best choices in who to turn to for help.
As a member of the medical profession, protecting assets and personal finances is vital not only to a physician and his or her family, but to their patients as well. There are some practical tips that every medical practice owner and physician should follow to protect their assets.
First, protecting a family with advice from a financial advisor in regards to tax planning is essential. Life, liability, and disability insurance ensure that a doctor’s family is covered. Many physicians run themselves ragged trying to keep up with the constant demands of family, immediate and extended, ironically, often at the expense of their own health. Setting enforceable reasonable limits will not only take pressure off of a physician, but it will be better for the many people who depend on the practice for their livelihood.
There is a list of recurring professional risks that can be predicted. These risks can be proactively managed in many different ways. Identifying these risks on a monthly basis and taking steps to guard against them is vital and sensible.
Having more than one business plan guards against the unexpected. Many physicians fail to have a backup plan for management of the business, risk, or retirement. Working hard for years without a specific end goal in mind is not only unproductive, but can lead to financial ruin.
Treating a Practice as a Business
While some issues are definitely unique to the medical field, many more are mutual to all successful American businesses. Having exit, continuation, and marketing plans along with patient retention programs can make or break a medical practice. Maximization of profits and retention of earnings are business aspects that can be outsourced. By paying attention to the details of patient care, a medical practice can flourish.
By focusing on the people who help inside and outside of the practice, success is inevitable. How employees are paid, treated, and protected shows that they are important. This means to be an effective leader, expectations must be set and rules enforced. Human resources are among the most valuable assets. Protect the best of these assets by making changes to personnel that do not contribute to the overall success of the team. Terminating employees is never a pleasant experience, but keeping toxic workers will only bring down a business.
In the same thought process, invest time in finding the right advisors, bankers, vendors, and lawyers. Build a team that is oriented toward the goals of the business. Set specific, short-term goals that can be attained through action.
Hiring an Attorney
Just as going to a doctor instead of self-medicating can mean the difference between life and death for patients, hiring an attorney instead of trying to go it alone can mean the difference in life and death of a medical practice. By listening to friends or family who lack the expertise, even well-intended legal advice can lead to financial ruin. Even if a group presents themselves as experts in document preparation, only a professional attorney can craft a business plan with the specific medical practice in mind.
Beware of Document Mills
Many companies have realized that medical practices are deluged with laws, regulations, and paperwork. While many doctors find themselves in need of legal advice, non-attorney promoters who are pushing the latest book or DVD often have no formal legal education in the specific areas of medical malpractice, tax laws, or medical business profit/loss management. Instead, they are experts at filing out forms where a “one size fits all” approach is taken, often charging tens of thousands of dollars in the process. Many physicians find themselves with less money and more headaches after investing in a non-attorney paper mill.
Time and time again, stories about poor or incorrect advice by a document prep group lead to ineffective, and sometimes illegal, actions to fix legal tax problems. In one case, a physician listened to the advice of one of these groups and ended up being pursued by the IRS. In the end, hundreds of thousands of dollars were spent to fix the mess that the bad advice created.
Hiring an attorney does not immediately ensure business success. Unfortunately, since there are a few unscrupulous attorneys in the legal field, a medical business owner must be diligent in finding an attorney that is not only experienced but ethical as well.
In a recent Florida lawsuit, a client lost $1 million from the actions of an attorney. After gaining access to trusts, the unscrupulous attorney went on a spending spree at casinos, gun stores, liquor stores, and went on extravagant vacations. Because the physician did not check on his accounts, the unethical attorney was able to go unchecked. An ethical and experienced attorney would never name them as a trustee in this case.