How Sick Is Your Practice?

Imagine you have a patient in your exam room. They seem healthy enough. They don’t have any complaints and appear happy. Their body weight looks fine, and the cursory physical exam is normal. You think everything is hunky-dory. Then you are handed a couple of sheets of paper with the results of the laboratory blood work. Now, if you’re a medical student, you glance over the paperwork hoping the report has normal values listed to help guide you. 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 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 and intimidating. Many will shrug their shoulders and move on, and they will miss finding the real problems affecting their practice.

Get the Knowledge

With all of the resources available today, you don’t have any substantive excuse not to improve your finical intelligence. You can pour over various websites and piece the information together. Alternatively, you can even read my book on the topic. The important thing is that you take that step and begin to raise the level of your financial intelligence.

To help motivate you in starting this journey, 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?

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. There were a few folks who 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.

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.

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 sold knowledge and understanding of the financial matters of your practice, 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. 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 if you possess and utilize that knowledge.

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.