Comments on: Why Doctors Are Not Good Businessmen

By: Dr. A

Dr. A — Wed, 27 Aug 2008 17:18:22 +0000

The small practice business model is hampered by insurance companies who limit the ability of doctors to pass costs on to consumers. There is no incentive to improve the patient service because reimbursement is not based on quality or convenience.

By: Amateur Economists » Corporate Medicine and the Physician-Businessman

Amateur Economists » Corporate Medicine and the Physician-Businessman — Sat, 16 Aug 2008 09:33:16 +0000

[...] topic of the business of private practice medicine. Once about how being a solo practitioner is not a good business and a second post about the group practice model of medicine. There are other models and this time [...]

By: The Healthcare Entrepreneur » Blog Archive

The Healthcare Entrepreneur » Blog Archive — Wed, 13 Aug 2008 22:50:48 +0000

[...] Check out the rest of this article here. [...]

By: Amateur Economists » Group Practice: The Secrets to a Successful Medical Practice

Sat, 09 Aug 2008 09:02:30 +0000

[...] post about solo practice medicine brought along some interesting comments and trackbacks. In addition to traditional solo practice [...]

By: Friday Tidbits: Quiz Show, Doctors As Entrepreneurs and Dr. Collins « The Dental Implant Blog

Fri, 08 Aug 2008 06:10:26 +0000

[...] do doctors make such bad entrepreneurs? The Amateur Economist discusses the topic – click here to read it. As you read it, substitute “dentist” for [...]

By: optoblog.com » Blog Archive » Kevin, M.D. “private practice model of medicine is dying”

Wed, 06 Aug 2008 04:15:57 +0000

[...] Kevin, M.D. “private practice model of medicine is dying” There was an interesting article written at the AmateurEconomist.com about “Why Doctors Are Not Good Businessmen.” [...]

By: J.L.

J.L. — Tue, 05 Aug 2008 17:01:24 +0000

Dr. J.C.,

Overall, I agree with your sentiments. Doctors in solo practice eat what they kill.

However, there are “group models” of medical practice in which there are many doctors in a group. The founders of the group earn a higher salary by paying new members of the group a flat salary and working them hard so that they bring in more revenue than their salary.

This model works better for some medical specialties than others. It works very well in anesthesiology, where senior members of some groups earn millions of dollars without working very much. They do this by negotiating a contract for anesthesiology services with a big hospital, then hiring newly minted anesthesiologists and paying them a flat salary (probably $250,000 per year right now, go to “www.gaswork.com” for current anesthesiology salaries), and working them very hard so that they bring in more than $250,000 per year. The senior members of the group take home the profit. Many senior members of anesthesiology groups are what we call “ballers”.

For solo physician practices, I think you are absolutely correct. The doctor is the sole breadwinner, so this is a very poor business model. The % of doctors in solo medical practice has been steadily declining in recent years, being replaced by group practice models.