Many doctors are perplexed by the apparent conflicts between the business of medicine and the practice of medicine. But what if there was a business model that easily merged both?
Doctors are confused. One the one hand, they are concerned about the influence of BIG MEDICINE and BIG PROFITS on the practice of medicine. On the other hand, they are beginning to understand that running a medical practice is a professional service business with all the requirements for generating a reasonable profit to be able to help patients. No longer do pundits refer to “practice environments.” Now, concierge medicine, franchising, and ACOs are “business models.”
Perhaps doctors should embrace the concept of compassionate capitalism, mission-driven organizations, and social enterprise.
Compassionate capitalism might help you resolve some of the conflicts between the ethics of medicine and the ethics of business.
A mission-driven business is an organization for which the pursuit of growth and revenue naturally produces mission-related benefits.
Mission-driven businesses are a subset of social enterprises, an idea that has been around for about 20 years in academic and nonprofit circles, and is now capturing the interest of a more mainstream audience. Muhammad Yunus’ Grameen Bank earned a Nobel Peace Prize last year. The bank, which has distributed almost 7 million micro-loans to poor women in the developing world, has been profitable for 27 of the past 30 years. In other words, profits are a means towards a social improvement end, like closing global health disparities, rather than an end in itself.
All social enterprises generate funding from the delivery of a product or service in exchange for money. In contrast to traditional non-profit structures dependent on yearly grants, social enterprises attempt to sustain themselves by delivering goods and services and supporting themselves with the revenue.
In addition, modifying the traditional business model canvas for for-profit ventures to suit the needs of mission-driven organizations reframes the challenge and helps to focus stakeholders on the primary mission. Unfortunately, many nonprofit hospital corporations have become financialized, designed to take advantage of tax benefits, and have lost their way.
Whether to create a business model canvas for a medical practice, nonprofit venture, or other enterprise is not an either/or decision. If you intend to last so you can realize your vision and mission, you need to have a viable model. Not having one is the Number One reason for business failure. And if your business fails, what have you accomplished?