Your practice management is as important as your savings rate to reaching your financial goals. 

What’s your gut reaction to that statement? I can almost hear some blasphemous scoffs. If you’re already moving to click off the page, hear me out.

Or better yet, hear my friend and colleague Kate Boehm out. Kate is a plastic surgeon in Canada in what is essentially their version of a private practice. Upon starting her practice, Kate realized that as doctors we never learn the details of practice management to optimize our time, sanity, and, ultimately, finances. So, she started helping set up a platform for doctors to optimize practice management together.

Let's start…

Why Doctors' Practice Management is Essential to FIRE

If you’re reading this, you are exceptionally efficient. You’ve had to be to survive medical training. But most of the time efficiency just means that you are still doing all the tasks just in ever smaller increments of time.  

This is a constant sprint with no end in sight (not an expert, but this seems like a really bad marathon strategy).

Contrast that to an effectively practice where small, incremental changes make each part of your practice run better. 

Bonus: this often means you don’t have to be the one to do every step of every task. (If you haven’t already, check out Buy Back Your Time by Dan Martell.)

This can help you save time, free up mental bandwidth and potentially increase your income.

Here are 3 big ways better practice management helps reach your financial goals: 

1. Directly increase your billings in independent or fee-for-service practice models 

Not rocket science. But if you can work the same number of hours but reduce the non-renumerated admin work for higher yield patient visits, your income (or average hourly rate) is going to go up. 

For example, by having an employee prep all of my consult notes for the week using templates, I save 2 hours per week. 

Without changing how many but the content of my hours worked, I’m able to do 2 more hours of consults and procedures per week. 

Let’s talk dollars

If your average hourly rate is $115 and you can reclaim 2 hours per week (and you do income-generating work during those hours), your weekly income increases by $230. That is over $11 000/year.

If your hourly rate is $250/hour this one small change adds up to $26 000/year. 

If it’s $400/hour, this is over $41 000/year. 

Even after subtracting the cost of paying an employee (or technology) to do a given task, you are still net positive thousands of dollars. Talk about turning micro into macro income.

This is thousands in additional income by only making one step of your practice management more effective.

How much more could you earn if you examined more of your practice? Just like investing, the magic of compounding is real.

2. Reach contract deliverables faster and use that time for your personal financial education and possibly build a second income stream

Does your contract mean your income is tied to deliverables? 

Just like above, with good practice management if you off-load the non-RVU work that needs to get done in favor of RVU-generating work in the same amount of time, you’ll reach your targets faster. 

This reclaimed time is yours to grow your personal financial education or finally get that side gig going. 

Hiring an employee not in the cards? There are still ways to improve your practice management without hiring an employee or outsourcing. 

Reducing preventable recheck visits so you have more time to do higher yield visits, reducing the number of end of day phone calls and incorporating practice trends all allow you to prevent unnecessary work, save you time and get necessary tasks done the best way. 

Have you already had ideas that would improve your practice (and income) but are meeting resistance? Don’t stop here. Find a win-win solution so that your roadblock can’t say no. 

3. Free up head space and energy to put that financial education into action, avoid burnout and reach your financial goals

Imagine if you could just do your job without regular interruptions, minimize recurrent administrative tasks and finish your documentation shortly after the clinical day. 

How much more head space would you have? How much more energy in the reserves? 

Now could you imagine starting or scaling that side gig?

Decision fatigue from the daily practice management decisions and the energy drain of administrative tasks is real. 

Whether it’s automating overhead expenses or giving your admin scheduling parameters, making small changes so that your practice runs more effectively means that you don’t need to be the one to do everything or be part of every decision. 

More head space = more energy to put that financial education into action, think creatively and reach your financial goals faster. 

More good news: the benefits of effective practice management extend far beyond just financial. You’ve likely already experienced that more head space and energy helps be engaged at home and prevent the all too common burnout.

Good practice management is an under appreciated superhero

There you have it, why (in both of our humble opinions) how you manage your practice is as important as your savings rate when it comes to reaching your financial goals.

It's not just about mindset and resilience. It's about building your practice in an intentional way so you can enjoy it as you progress on your path to financial freedom and the ability to practice medicine completely on your own terms, which I think we can all agree would be a pretty amazing thing!

What do you think? Do you agree? Vehemently disagree? What tips do you have to run an effective practice? Let me know in the comments below.