4 Tips for the Entrepreneurial Business-Minded Spine Surgeon
Stephen Hochschuler, MD, founded Texas Back Institute in Plano in 1977 with Ralph Rashbaum, MD, and Richard Guyer, MD. During that time, consensus seemed to believe that the physician's role was to focus on taking care of patients and not to worry about the business of medicine, according to Dr. Hochschuler.
"The mentality was: we are here to practice and not to worry about the money. The money will figure itself out if you practice good medicine," says Dr. Hochschuler. "The problem is, when physicians let someone else run their office, they have no understanding of business issues and no way to measure the success of their practice, center or institute."
If physicians want to open and operate their own spine practices, it is important to understand the business issues of medicine. "While I agree physicians should focus on care first and foremost, they cannot avoid the business end," says Dr. Hochschuler. "It needs to be considered for the security of the practice."
Dr. Hochschuler has learned a great deal about business and running a successful spine practice. He Dr. Rashbaum and Dr. Guyer learned many lessons along the way, which helped Texas Back Institute to grow and evolve over time. Now, 35 years later, Texas Back Institute is one of the largest freestanding multidisciplinary academic spine centers in the world.
Here Dr. Hochschuler discusses four tips for physicians with entrepreneurial spirit to open their own spine practices and operate them profitably.
1. Have a goal; know the "why." It does not take an advanced objective to get a spine center off the ground. However, to keep a spine center open and to run it successfully, takes a targeted and focused goal. Dr. Hochschuler and Dr. Rashbaum had a very clear, succinct vision for Texas Back Institute. They wanted to open the most academic private practice of spine in the world. According to Dr. Hochschuler, they aimed to marry the best of science, best of medicine and best of business.
Dr. Hochschuler adamantly believes a goal and a target are important to guide a successful business, even a spine center or practice. According to a TED talk "How Great Leaders Inspire Action," by Simon Sinek, many companies are guided primarily by what they do. In comparison, great companies start with "why," which makes a difference for success.
Mr. Sinek recommends forming a Golden Circle with "why" in the middle, encircled by "how" and then by "what." Successful companies, in comparison to other companies, travel the circle from the inside out; "why" does not mean "to make profit." Instead, "why" should be a purpose, a cause and a belief. It should guide how a successful company thinks, acts and communicates. Dr. Hochschuler believes this principle can apply to spine practices.
Texas Back Institute's "why" was offering patients a new model for conquering back and neck pain. The "how" and "what" was by opening the most academic practice in the world.
2. Share the goal internally and externally. According to Dr. Hochschuler, while it is important to market externally it is almost more important to market internally — all the employees of the practice need to understand the organization's goal.
"If you are not proud to work for a company, then you will not do your best work and eventually you will go work somewhere else," says Dr. Hochschuler. "The same thing applies to a spine practice. We wanted our employees engaged and committed so we spent time sharing our mission and how it important it was."
It is hard for a spine practice to be successful if the only person committed to the business is the practicing physician.
3. Gain exposure for physicians. Since it is important for a spine center to have patients and make a profit, external marketing is necessary. One method is to gain exposure for the practicing physicians.
"Consider what organizations or societies in your community physicians should be involved with. Organizations like the chamber of commerce or non-profits," says Dr. Hochschuler. "Look into areas of children education, sports and disadvantaged individuals. You have to keep your eye on everything."
Physicians that become involved with community groups may not only meet potential patients but also other physicians who could drive patient volume through referrals. Relationships are integral for acquiring patient referrals and driving patient volume whether those relationships are community or medical based.
4. Stay educated, employ business-minded individuals. Dr. Hochschuler does not think it is necessary for physicians to get an MBA in order to own and operate their own a spine practice. "Having an MBA may give you education and information but it does not make you a genius in business," says Dr. Hochschuler. "You will still have to use what you learned properly."
Dr. Hochschuler recommends taking online classes when the time is available or finding other ways to stay educated. "Gain enough information so you are not neutral or negative on the business side of your business. You don't have to know everything but you don't want to be completely in the dark either," says Dr. Hochschuler. "If you have the right people you don't have to know a lot. You just need to know a little bit to analyze and review their decisions."
In order for a physician to focus primarily on care yet run a spine practice, it is necessary to work with individuals that have business experience. While it is important to understand the business concepts, when educated and talented people are doing the heavy lifting the physician can focus on care.
Dr. Hochschuler hired a woman who had accounting and auditing experience to be Texas Back's CEO. "She is fantastic. She monitors every aspect of the business even down to reports of how nice, or not nice, the physicians are in order to determine patient satisfaction," says Dr. Hochschuler.
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