Ophthalmology Business

SEPT 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

Issue link: http://digital.ophthalmologybusiness.org/i/174774

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Page 13 of 26

Why business people think doctors are stupid by Mitch Levin, MD, CWPP, CAPP Doctors are not stupid. On the contrary, you are well educated and often brilliant. You are trained in pattern recognition, absorbing and systematically analyzing tremendous amounts of data to arrive at a diagnosis and develop a treatment plan most wholly appropriate for your patient. You are held to an extremely high standard, not only in terms of work ethic, but also in terms of ethical treatment of your patients. How 14 then did doctors earn the reputation of being bad at making business decisions, particularly in the area of money and finance? First, there are huge pressures on your net income. You have little time to manage your practice or even your personal life. You have a multitude of challenges associated with managing a busy medical practice. Uncontrollable outside forces affect your revenue stream and expenses, as well as perceived mandates and risks—whether real or imagined. Ophthalmology Business eZine • September 2013 Although this may be the best time in history to be a physician, given the opportunities to provide care, cure, and comfort to patients, many physicians are not happy with the practice of medicine. Their dissatisfaction often leads to financial "overreach" in an effort to compensate. Second, when it comes to money and finance, physicians try to identify patterns, as you have been trained to do in your own medical field. But of course, investments and markets offer no more patterns than does reading tea leaves. Third, doctors often have misplaced trust. You may expect your financial advisor to have a comparable educational level and the same level of ethics associated with the Hippocratic Oath. Unfortunately, most other professions do not have our rigorous education, and in every profession, there are individuals who fall well short ethically. The following examples illustrate bad advice often given to physicians. For asset protection, you may have been ill advised to buy the biggest house that you could afford. This can lead to an upside-down cash flow situation. Likewise, you are often told to maximize your pre-tax contribution to a qualified plan, which, if you are successful, could lead to paying higher taxes later. In addition, you are often told that building equity is extremely important, yet equity earns zero. All too often you wind up "cash poor" and in a non-liquid investment complicated by discontent among business partners, particularly if the real estate is not valued at market rates.

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