Although I would never describe the business of primary care medicine as cutting edge, there are a number of innovations that have come and gone during my short tenure running a medical practice. The business of medicine is fascinating and leaves much room for personalization and creativity. I have been lucky to operate at the forefront of practice management and learned quickly how to leverage two bleeding edge philosophies to multiply profits. First, seeing the inefficiencies of compliance as relates to third-party payers, I started a concierge practice. In this setting, I collected a yearly fee above and beyond the insurance payments that was charged for uncovered medical services. The details of this type of structure can be found elsewhere. Second, I utilized an oft-forgotten method of lowering overhead; I visited patients in their own homes instead of paying for office space. Although I learned many lessons from my experience in this arena, there is one question that dutiful practice managers should ask to keep the books on track: Do you run a financially independent business?
I’m not talking about the same concept as personal financial independence here. The idea is not that the business can generate enough cash without the input of manual labor for eternity. I’m thinking of a slightly different flavor.
Can a business generate sufficient revenue that it doesn’t need outside funding from another source, or internal funding from another revenue stream within the company?
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