A few weeks ago, I came across a peculiar article on KevinMD.com. What really caught my attention was a doctor (of all people) stressing the need to be business savvy in medicine. In fact, most (if not all) of the articles that promote success as a doctor stress upon more training and more certifications. (But if you read my free report, you will know that you need more than that to be successful.)
Since the peculiar article did not just rehash the same-old advice, and actually took a very contrarian stance, I decided to investigate and contact the author: Dr. Curtis Graham.
When I reached out to Dr. Graham, he graciously shared about his life experiences and his thoughts. As I listened to his life story, everything began to unfold. I clearly see why his tune is so different than the ones sung by his colleagues. In short, I was shocked.
Let me give you a brief introduction.
Dr. Graham is not just any old, regular doctor. He is an ivy-league doctor, who graduated from University of Pennsylvania’s medical school. He has practiced in obstetrics and gynecology for over 30 years. He wrote numerous medical articles. He even authored a book about infertility.
In spite of all his achievements, the healthcare environment chewed him up and spit him back out. He is dead broke — he has nothing.
When I heard this, I just cannot believe it. How could this happen? Based upon the advice by the medical society, he did everything right.
But he made one major mistake: he believed that his medical training alone was enough to reach success. He lacked business skills. And as a result, he made many mistakes throughout the course of his practice that has lead to his current state.
Well, I decided to ask him for advice on how we, as medical students, can avoid this fate.
And all I have to say is to keep on reading. For your financial stake, you cannot miss this.
Interview with Dr. Curtis Graham
1. Why is it important for medical students to understand business? Doesn’t becoming a doctor guarantee financial success?
Medicine is a business, no matter if you are in a solo private practice, academia, or part of a HMO. Neglect this fact and you may find yourself in a financial ditch you cannot get out of.
Let’s start out by discussing medical practices. They are obviously businesses. Therefore, someone needs to know how to run it productively and profitably. Or else it will fail. It takes a working business knowledge to do that. And if you own the practice, it is your obligation to have that knowledge.
If you don’t have the knowledge, then how do you intend to run your practice? By trial and error? Books? Guessing? Prayer?
The most common response I find is:
I will assign the business-aspect of the practice to one of my office employees.
If you decide to go that route, keep in mind that most doctors can’t afford a trained office manager for $50,000 – $70,000 per year. This is especially true for new doctors just starting their practices.
And if you can afford an experienced office manager, you will often find that she exaggerates her managerial knowledge, falsely expands on her qualifications, and very often don’t know much more than the doctor about managing an office. So in the end, you will hire someone who cannot handle the job.
But let’s say you do find one who is competent. Still, she does not know what you have in mind about your practice, your goals, and your methods for running your office (unless you spend a lot of time teaching her).
Another facet about this situation (that I have personally experienced) is that a really well-trained office manager will grow to resent the doctor’s instructions, thinking them to be dictatorial.
In my experience, it is always best to do all the management yourself, even if you have to learn everything from scratch. And since most doctors do end up running the business-aspect of the practice by themselves, doctors with no business knowledge or experience have no idea how to run their practice efficiently and profitably. As a result, they will end up with a mediocre medical practice, earning half or less of what they could potentially be earning.
Presently, doctors are losing their practices in droves for financial reasons; they can’t earn enough to keep them open. But it doesn’t have to be this way.
Now you may argue that you don’t want to own your practice. You want to work for someone else instead. That is respectable. But do keep in mind that doctors’ incomes have dropped nearly 10%, on average, over the last 20 years and will continue to decrease. That’s because of governmental interference with doctor fees, increased restrictions on healthcare, continued lack of medical malpractice caps in most of the states (which results in sky-high premiums).
Doctors will never get back to the incomes they had 30 years ago. The golden age for doctors is over.
If you want to enjoy a doctor’s income in the foreseeable future, you will have to take initiative. That means you will have to start a business, and it may not even be a medical practice.
If you refuse to embrace the knowledge of business, your income will keep going down. You will barely have enough to pay off your medical school loans. And you will live on the edge of poverty for most of your life. You will be at the mercy of the government, employer, health insurance companies, and whoever else controls your future as a doctor. You do not hear this side of the story. But this is what has happened to me. And I do not want it to happen to you too.
2. Let’s say you have just graduated from college. Would you still choose to become a doctor? Why or why not?
If I were to start all over again, I would never choose the medical profession. Why? Because I now know that having a personally-owned business separate from medicine is the best means of earning much more money than physicians ever will earn. Most affluent people derive their millions from several income sources using their entrepreneurial skills.
Many of my former classmates in medical school chose to involve themselves in academic institutional practices, subsidized by hospitals, government grants, and institutional donations. They all seem satisfied with their career. But I have a feeling that deep down, something is missing. They are not totally happy because because they have not reached their full potential. Employed doctors no longer are in control of their profession or career — others are. I have many regrets, as do they.
3. Let’s say you have just finished residency. What would you do to become successful? Why?
This story should begin in college. First, pick the right medical school. The school has to fit your personality and has to be in an area you would like to practice. Purely from an economic point of view, it is best to set up practice in the Midwest states for several reasons:
- lower tax rates
- lower cost of living
- population is more trusting
- lower malpractice premiums
It is best to be in a city with a population of 500,000 or more. The city should have a college or university so your kids can stay home while in college. This will save a lot of money. If you plan to open a practice, start it in an affluent neighborhood because it will be very difficult to move later.
I also believe that private medical practices will disappear within 5 years, with one exception — concierge cash-only medical practices. If I were a graduating medical student today, opening a cash-only practice would be my plan and objective. It enables you to retain full control of your career and income potential.
New doctors need to become very selfish with their careers. Family aside, nobody gives a damn whether you live or die, make it or don’t make it. Others are too distracted by their own dilemmas to have time to care about how you are doing.
Why am I focusing so much on money? Obviously, you need to pay back student loans and make a living. Believe it or not, you need money to practice medicine. Even if you just want to help people, you need money. You need money for medical equipment, medical supplies, transportation, etc. In my mind, wealth enables a greater distribution of healthcare across the world to the underserved.
4. What is the healthcare environment going to be like in the future? What can medical students do today to adapt?
There is no question that students should start an online business today. This will teach you a lot about business at a very little cost (besides time and sweat). I am trying my hardest to get a business education program started at a medical school somewhere. So far, there have been no takers.
If you want to be successful, here are some important things for students to do:
- Fixate firmly on a specialty as early as possible. Pick a specialty that will produce the highest income — surgery, invasive cardiology, or gastroenterology. It’s either doing that or become one hell of a business man in your practice.
- Learn business. You can do this by:
- Approaching the medical school dean with an idea to create a voluntary business education program. A good idea is to get business students from a local business school to teach the medical students at least some business basics. They can teach for community service or for a few dollars an hour.
- Reading the best business and marketing books. In addition, I would advise you to subscribe to the top-of-the-line business and marketing, monthly newsletters. A good one is Glazer-Kennedy Marketing Newsletter ($59/yr). And, of course, you should subscribe to my free newsletter about the business of medicine. (You can find a link to Dr. Graham’s website at the bottom.) Personally, I do not like to watch videos. But if that is how you learn, you can do that instead of reading.
If you follow my advice, the business education you will get during your four years in medical school will give you a tremendous advantage over all the other doctors who focuses only on medicine and nothing else.
5. If there is one thing medical students can do to ensure their future, what would it be?
Although I don’t claim to have all the answers or have the mind of Edgar Cayce, I do have some serious thoughts about this.
This is what I would do if I were you, from most important to least important:
- Establish multiple sources of income, preferably passive income. Money is the key to survival and success.
- Always have short-term and long-term goals. Then achieve them. Those who laugh at this idea have absolutely no knowledge about the subtle but critical powers that goal-setting provides. You can call it, “Developing a habit for success.”
- Learn how to maintain your passion, creativity, and expertise for the practice of medicine. Find them, recognize them, and then seek to build your medical career around those several factors. If you do this, you will not quit when things get tough. You will need perseverance if you want to achieve any type of success.
- Create and maintain success habit patterns. Be open-minded and adaptable to any and all opportunities that that add value to your passions. Make it a habit of associating with winners and successful people, so you can learn their secrets to success. And dump all the naysayers you run into. Always have at least one workable back-up plan, just in case something devastating happens.
- Be frugal, at least in the beginning. You don’t need a Porsche 928 to start your practice or to look good. A new house and a big mortgage compromise your credit rating when you need money for medical equipment. Early in practice, those kind of things significantly delay your success and goals. Last, but not least, this is a personal rule about how I spend my time. This rule is modified by the principle that made so many entrepreneurs filthy rich. The rule is:
Only spend your time on things that will in some way help you in your career or medical practice.
Do not waste your time.
Dr. Curt Graham is a physician, author, marketer, and expert in medical practice marketing strategies. He can be reached at Marketing Your Medical Practice.
Attention! Do you want to make more money as a doctor? Do you want more freedom? Are you sick of all the useless, time-wasting paperwork? Do you wanna learn how to set up and run a profitable practice that only takes cash, from someone who has “been there and done that?” If yes, check out My Cash-Based Practice: Essential Knowledge for Creating a Successful Private-Pay Physical Therapy Practice — the best book I have found on starting and running a cash practice.
At the very least, check out the book review.
This article is part of the Money in Medicine series. Click on the link if you want all the money-making secrets available to doctors.