GPs often talk of wanting to know more about business. But what are the best options available?
Despite nearly a decade’s tertiary education, the vast majority of general practitioners emerge from their training with little or no knowledge of the intricacies of running a business.
For many, this is not a concern — working in hospitals or as an employee doesn’t require advanced business skills. But for those who move into practice ownership, it can be a costly knowledge gap.
Most still begin business life with little more than instinct and some advice from colleagues to guide them. Everybody knows how to use surgical instruments, but what about the financial instruments that support a practice? You may have mastered human anatomy, but what are the secrets of human resources?
Ultimately, owning a practice will always be much harder without business education, says Dr Neville Steer, a member of the Royal Australian College of General Practitioners (RACGP) standing committee on GP advocacy and support and contributor to the College’s practice management resources.
“You know an awful lot about medicine, but unless you make an effort, owning a practice entails navigating your way through a field that you don’t know.”
Dr Steer had already been a practice owner for five years when conversations with his corporate management-trained sister prompted the realisation that there was a lot more he could learn about running a practice and arranging his personal finances.
He went on to spend 10 hours a week over two and half years studying for a Diploma of Management.
“It was a reasonable chunk of learning”, he says, but well worth it.
In addition to learning how to manage his business more effectively, he says the most valuable skills he picked up were the ability to understand investment principles, such as for superannuation, and to read financial reports.
“It’s like anything. You don’t know your own knowledge gaps”, Dr Steer says. “Until you do a more formal structured learning program, you’re not aware of the breadth of the field.
“My recommendation for anyone who is taking on the ownership of a practice — actually investing money — is that they need to have some management training. The more they can afford to invest in their own training, the better off they ultimately are.”
Where to go
But how can a GP get a good business education while operating in what is often a time-poor, high-stress environment? And what is available that is accessible and relevant to modern medical practice?
One option is to go back and complete a Master of Business Administration (MBA) after entering the workforce (see Box). However, time pressures make that commitment close to impossible for many, and Rick Chapman, head of open programs at the not-for-profit Australian Institute of Management (AIM), says getting an MBA for general practice is akin to “cracking a nut with a sledgehammer”.
He says lots of institutions offer short courses in various management skill areas, including finance and marketing.
“There’s a whole variety of options now open to people in terms of skill development through online courses at various institutions.”
Mr Chapman agrees with Dr Steer that for many practice owners the problem lies in not knowing what they don’t know.
“Part of the problem in a profession like medicine is that practitioners are so skilled in their technical capability as medicos that the other skills that are needed to run a business are not there.”
He points to a shorter course now being offered by AIM to cater for those with time pressures. These 2-hour sessions can be completed face-to-face or online.
For more specialised business management tips, the state offices of both the Australian Medical Association and the RACGP offer occasional business and practice management courses, which are tailored for doctors. There is also a range of booklets outlining various aspects of the business of running medical practices which can be purchased and downloaded from the RACGP website.
Some of those GP Divisions that are continuing as member networks are also looking to provide services in this area. In one example, Victoria’s Peninsula GP Network has begun a GP business program and 60 local doctors and allied health professionals attended its first course last month. The day-long course offered business advice on an individual basis — covering investments and superannuation — and for practices, and the Network is hoping to be able to hold the course every second year with more regular events for registrars and newly qualified GPs.
To address the knowledge gap at an even earlier stage, there are intermittent calls for the inclusion of business management education in undergraduate medicine. But the undergraduate medical curriculum is already so tightly packed that even many of those in favour of more business-related education say its inclusion would be too much to contemplate.
As an alternative, combined business/medicine degrees offer the two streams over a longer period of study. This option began to be offered widely in the United States in the 1990s — the number of MD–MBA joint degree programs grew from six to 33 over just 10 years. However, it is not yet an option in Australia.
Beyond peace of mind, the benefits of partners with better business knowledge are great for both practices and patient care. Dr Steer makes an effort to talk with registrars and young doctors about his own experience and his view that to provide good patient care you need to have good practice management. There is increasing evidence from research that this is true, in particular when it comes to chronic disease care.
“And while you don’t need to do everything yourself, you need to have a good understanding of what needs to be done”, Dr Steer says.
“Owner–practitioners need to direct the business strategy and so — despite the skill and vision of the best practice managers — still need to understand what is being done.”
In the end, says Dr Steer, it makes the practice manager’s job much easier if the owners understand the management scope and tools.
“With running a business, you are going to be much better off in the long term taking a proactive approach to the way the business develops and works. The more knowledge you have about business operations the better it will be for everyone.”
Master of Business
Gold Coast GP Dr Jack Ashwin says he decided to do an MBA in the mid 1980s when he began to anticipate the changes ahead for small general practices similar to one he had just bought into.
“Even back then we could see the writing on the wall for little two-man practices. And if you wanted to get any bigger than that you wanted to get a business skill set to be able to do it.”
It was prior to the start of his family and the practice was smaller, so Dr Ashwin had some spare time to consider further study and had a good idea of what an MBA entailed as he came from a business-oriented family.
He began studying at the University of Queensland, but switched to Bond University to cut back on travel time in order to complete his study commitments.
It was hard but he has no regrets.
“It gave me more managerial skills, which was the biggest thing we needed. And I also got a flavour of how to attack problems and understand financial instruments.”
Above all, it provided him with the nous to fund a $5 million practice construction project on the basis of an overdraft of just $25 000. This was because he was able to understand how the financiers were thinking.
“It’s pretty hard to play the game unless you understand the rules and with the MBA I had the qualifications to understand the rules.”
The Mermaid Beach Medical Centre now has 85 000 patient contacts a year and Dr Ashwin still maintains contact with some of his lecturers and fellow MBA students.
“It was such a stimulating diverse group.”