Financial and commercial literacy are crucial if you’re in private practice, and money should not be taboo.
For the last month, I have been taking business-related courses and training.
These courses are not specifically intended for medical practitioners, and in both recent programs I was one of only two medical doctors in the room. On day one of the five-day intensive workshop, I felt the most underqualified and intimidated I have felt in years. Years. This was the first time I had ever seen or learnt about the three types of financial statements. If this is also the first time you’ve ever heard about the three types of financial statements, then this this article might be for you.
In any non-clinical roles I have, my expertise is clinical advisory, clinical guideline development, or policy and implementation science within a clinical setting. Even my writing, like this column, is for a medical audience and a medical newspaper. My skills and capabilities are progressing well within this narrow scope, but I, like many other doctors, have poor business competency and without treatment, I will impair my own potential in clinical medicine.
General practice has encouraged me to upskill because general practices are small businesses. We operate as a collective of individual small businesses and the viability of our industry as a whole is dependent on the viability of each individual general practice business. We must collectively succeed financially for general practice to remain in existence, and therefore, honestly, for public healthcare to remain in existence.
So, how is it possible that my six years of medical school and four years of hospital training and now eight years of general practice have not sufficiently trained me in understanding income statements or tax and super obligations or investment? My knowledge has relied almost solely on emails from my accountant, modelling peer practices, and learning from finance educators with medical backgrounds, like Dr Dev Raga or Dr April Armstrong. My inspiration has come very much from medical leaders who openly challenge the status quo that doctors (GPs especially) should not “seek money”, or that doctors, already generally high-income earners, who do, are “greedy”.
As in any industry, there is a spectrum of financial success, but this is quite skewed in medicine, because of the implied ethics of it. Healthcare should be accessible, achievable, available, and free to all. In theory, I strongly agree with this, but it doesn’t work in practice. The current model of general practice funding relies on government set values for Medicare rebates, which are well below what is needed for sustainable and successful business models for general practices, and are well, well below what our industry and community values as the contributions of GPs.
As a result, GPs are either forced into financial insecurity, burnout and utter frustration relying on bulk-billing rates for income, or demanding patients to pay for healthcare in a country with a public healthcare system. That’s until, at least, our advocacy to the government for improved investment in general practice makes meaningful headway, with deep kudos to the great leaders in our general practice community who are fighting this fight for all of us and our patients.
For a long time, I was embarrassed and insecure discussing the financial aspects of medicine or confessing that I worked in private practice, believing it was a taboo topic for doctors (and it is). Most of my patients will have to pay out-of-pocket fees to see me, and I am very aware that many patients have to budget for these expenses.
However, I am now increasingly comfortable with this. I don’t provide a two-tier model of healthcare in which my bulk billed patients receive lesser quality care; I believe private billing allows me to also provide my same level of care to patients who are more financially restricted. Private billing also helps me to continue in clinical medicine by giving me an income that is closer to being at the worth of my skills.
This is why I am trying to improve my business and finance literacy; we doctors really need to move away from the idea that these skills are not relevant for us. How can we advocate for, contribute to, and develop a functional healthcare system without a clear understanding of how, why, and what informs and delivers the money to our bank account? Regardless of specialty or subsidisation models or career stage; why are we having to seek out external avenues to access this knowledge?
Most importantly, why is there still a taboo among doctors about discussing this?
We need to normalise medical students and doctors developing solid business acumen. Skills in organisational leadership and governance, finance, budgeting, wealth creation and tax are essential for us. As I continue to learn more about these concepts, I am increasingly ashamed by my poor financial literacy. The payroll tax obligations! This threatens GP jobs immediately! PAYG! We do these statements every three months! GPs are predominantly sole traders – we have literally no leave entitlements. No sick leave. No carer leave. No maternity leave. I didn’t even know this until I was finishing my specialist general practice training because GP registrars are salaried employees.
Surely, a basic level of business and finance education needs to be incorporated into medical undergraduate and postgraduate courses, offered as RMO professional development opportunities, and structured into all specialist training programs? Won’t this help generational shifts in attitudes of doctors towards “business”, and then help improve funding and advocacy of healthcare, improve financial success of general practitioners and general practices, and increase sustainability of medical professions?
Won’t this also help position many of us to be safer and more competent in leadership and business roles, and perhaps even encourage these new pathways for younger doctors who still see clinical practice as the only outcome of a medical degree?
I would have been quite uncomfortable writing this column one month ago, but the more interactions I have with business leaders and executives outside of medicine, the more comfortable and confident I am urging for all doctors to upskill in this area.
This isn’t a choice between caring about patients or caring about money. We are in the business of healthcare. We need to be skilled in business.
Dr Pallavi Prathivadi is a Melbourne GP, adjunct senior lecturer at Monash University, 2024 RACGP Mentor, and newly appointed member of the Eastern Melbourne PHN Clinical Council. She holds a PhD in safe opioid prescribing and was a Fulbright Scholar at the Stanford University School of Medicine, and previous RACGP National Registrar of the Year.