Why Many Physicians Will Get Crushed by Wall Street and Private Equity

Here are the two questions this article will answer: Why will private equity be able to hold physician salaries stagnant while increasing prices? And why is it so hard for a physician to give ‘the bird’ to the system even when the system is pulling the carpet out from under them?

The answer in two words is money and marketing. But reading just the headline is what gets most Americans in trouble today. As usual, the ‘devil’ is in the details. To make it simple, we will lump Wall Street and private equity together and call them ‘big business.’ (Understanding public equity vs private equity is a 10-hour conversation of its own.)

Big business has more capital than you could ever imagine. They can literally afford to pay your salary 10x over for a decade just to make sure they win in the end. Did you know Tesla, Uber, and Amazon were not profitable for years after they launched? Amazon didn't make a penny for 9 years. Tesla didn't see a dime for 17 years. Uber took 12 years. That is because they had the capital that allowed them to win, no matter what.

Do you have the capital to withstand 17 years of no profit in order to turn healthcare around? If the answer is no, then this article is meant to be an actionable guide on how to actually survive in healthcare going forward. I am not a “WebMD-er” and I don't try to play doctor. But I do understand business, and my purpose is to make sure you understand what you are up against.

Back to Our Examples: Tesla, Uber, Amazon

They were competing against Ford & GM, competing against the longest-standing service industry (taxis), and competing against huge retailers that have dominated the worldwide market for decades (Walmart). But they entered the battle anyway. Why? Because they saw a path to success, as long as they had the ability to do two things: outlast the capital drain for 10+ years, and spend enough dollars on marketing to the consumer that they could shift human behavior and habits.

This is the same battle you face in healthcare today. Physicians are trying to fight big business with a doctor's heart. But the heart is only a part of the equation, a part that we all realize big business is missing. They are profit-motivated, not heart-motivated. They literally have a duty to increase profit on behalf of shareholders. They cannot make heart decisions if it will be detrimental to profit.

You are a physician, and you will be taking on big business whether you like it or not.

How do you do it? You don't remove your heart from the equation, but you do need to add in the business brain. You use your heart to guide your decisions, but you use your brain to execute the decisions.

Right now, you are a pawn in the big business marketing system. Just like the NCAA fought for years to use college athletes as free advertisement to fill their stadiums and up their enrollment, the hospital systems and healthcare groups are using you as free marketing to drive patients. They are not the “top cardiac hospital” like they advertise on the billboards. What they truly mean is that they have the best cardiac physicians — you just aren't getting the credit. The system is. And just like NCAA athletics, the CEOs, the presidents, and the football coaches are bringing in huge dollars on the backs of the athletes and physicians.

So What Can You Do?

You need to market yourself outside of your employer doing it for you. I have been on the consumer (patient) side my entire life. There is not one physician that I have ever tried to research that did a good job of marketing themselves. They are on some database with an old photo and their schooling credentials listed.

As patients, we want to see you online, we want to hear your personal story, we want to see your journey, we want to see you being ‘the real you’ on podcasts. In today's social-media world, the physician who markets themselves like this will outperform every other physician, irrespective of their skills. You can't be a bad doctor, but a ‘good enough doctor’ who markets themself will always outperform the expert who doesn't.

You don't want to choose one or the other — skill or marketing. You want to be damn good at what you do, and you want the world to know it. There are a ton of people who have “genius inventions” but no clue how to market their idea.

Do not be the most-skilled physician and let it die as a result of lack of marketing.

Recognize the business brain side of the equation. Take off your physician glasses for a moment and put on your business glasses: the hospital systems are using you and your skills to market the system and create massive profits. That is the big business playbook. The hospital will always market you. You will not get them to stop, but you don't just throw in the towel. You approach it with your business glasses on, and you start marketing you.

Because if the day ever comes where you want to pivot — change employers, open your own practice, or simply not have the system controlling your hours and life — you will have the marketing in place that allows you to transition. This is the same across all industries. This is the playbook for the ‘little guy’ to compete against the ‘big guy’ no matter what profession you are in.

The Second Step: You Need Capital

You cannot be another physician statistic. You cannot make a huge salary and still manage your finances like you only make $100k per year. If you don't operate your financial life like the financial professionals who make similar income, you are leaving yourself vulnerable. You don't need to be a financial genius, but you absolutely cannot leave yourself vulnerable.

You need to familiarize yourself with the financial world. You are going up against companies that have teams of financial analysts directing decisions. Big business understands the rules of money. They are the ones who control the money playbook in America, and they make the same salary that you do. But they don't have two things that you do: student loans, and a 10-year-plus path to success.

I am not a conspiracy theorist by any means. I want to see data and proof. I am also not convinced that the system was purposefully set up to take advantage of physicians, but we also need to realize that sometimes unintentional consequences occur. And right now, you are fighting an uphill battle for these two reasons: you start making money later in life than they do, and you likely have a student-loan burden hanging on your shoulders in the beginning years. If you try to compete — or even just survive this rapidly changing healthcare system — without an understanding of the financial world, you will never make it.

You will be the Blockbuster in the story of Netflix.

Here is the cold, hard truth. Big business has always and will always identify markets that are extremely profitable. They will then build their game plan, and then come in like a storm, loaded with capital and a tried-and-true marketing machine. Right now, healthcare is directly in the middle of this target of Wall Street and big private equity.

Just like the auto industry didn't see Tesla coming, big business is here, and they are speeding up, not slowing down. You can compete with a big heart as your weapon for a short time, but at some point, the grind will burn you out — and big business has the deep pockets to wait for that time to come.

If you truly want to survive, you need to compete smarter, not harder. You need to see behind the scenes, you need to see what you are truly up against, and you need to see their playbook before they run the plays. Think of it like this: if you are hitting the road, you want the GPS to give you an update before you hit the bumper-to-bumper traffic. If the GPS says “you are in traffic” right after the last exit, it does no good. You are on a path to big business healthcare. Use the GPS to identify the best path before you are already in too deep.

So What Action Steps Do You Actually Take?

That is the ‘lecture’ portion. But knowledge without action doesn't create change. So here are the action steps.

1 · Attend the Physicians Financial Summit

This article isn't a sales pitch for the event. This article is just a drop in the bucket of what you need to know, and events like the Summit are the only way to truly share the depths and details of what was touched on here. This is an opportunity to pull the curtain back on how finances actually work in America. The only reason we are hosting this event is because we searched far and wide for something similar — and it doesn't exist. The Physicians Financial Summit is a deep dive behind-the-scenes look into how finances work for the wealthy. This is the info that other professions with your income already know, but you missed because you were focused on learning medicine. (Here's a little secret: 9 times out of 10, the lack of true life-changing financial success is simply a lack of knowledge. It is rarely a lack of income, desire, or heart.)

2 · Set Up a Profile to Market Yourself

We get no compensation whatsoever from you doing this. Just like we searched far and wide for someone else providing truthful financial education to physicians, we searched for anyone who was truly doing marketing the right way in the physician world. There is just nothing else out there that allows you to market yourself as a physician for such a fair price. A database profile pic doesn't cut it in the marketing world anymore. The days of “looking in the yellow pages” are long gone.

I am on the outside looking in, and I can clearly see how the big business playbook is being rolled out in healthcare. From the physicians I speak with, big business already has a stronger grip than most realize. These two action steps are the simplest and most impactful steps you can take to prepare for what is coming in the future of healthcare — and honestly the future of all industries in America.

When the dust settles, you will either be Blockbuster or Netflix.

The good news is that there is still time to make the decision on which one you will be.