The Business of Medicine: What Doctors Aren’t Taught

Lack of Business Training For Doctors Harms Healthcare

Almost 30 years ago, while in residency training, the head of the Department of Psychiatry once asked, “What is the aim of our department?”

“To save lives,” said one resident.

“To improve the health of our society,” said another.

“To improve the health of our community.”

“As a public university, it sets standards of excellence in clinical care regardless of patients’ financial status.”

He shook his head each time, and finally said, “The aim of our department, every department in this university, and every university is to survive and thrive as itself. If that doesn’t happen, we can’t deliver on our mission and vision, which is what you all are talking about.”

At that time, I hated his answer. Now, I understand where he was coming from.

As they say, no margin, no mission.

However, ask any med student, resident, or doctor why they chose medicine as a career. Most will have reasons that have nothing to do with money and everything to do with helping others.

Ask them what med school forgot to teach them, and you’ll often get this answer: how the business of medicine actually works. That failure is a common feature of all medical training in every part of the world.

Online, you’ll find discussion threads where doctors ask for help from other doctors about things they never learned, like:

How billing and coding really work.

How to read a contract before signing it.

How to run a clinic or lead a team.

How small clinics and large ‘non-profit’ hospitals fund their activities.

Instead, many of us learn the hard way — by making mistakes. Some people joke that their first job contract should come with a warning label: “Read carefully. May contain surprises that make you look stupid.”

What Research Says

Medical journals and newsletters back this up. Surveys show that most students and residents feel unprepared for the non-clinical parts of practice. In those journals and newsletters, we often see ads for paid workshops that teach coding, billing, and practice management. These workshops are just an introduction.

In a 2024 survey, nearly 90% of medical students say their knowledge of the “business side” of medicine is basic at best. In other words, we know it matters, but we’re still not teaching it enough.

Why This Matters Now

Over the last 25 years, the business side of medicine has changed almost as much as the science.

Electronic Health Records were once rare. Now they are everywhere. They come with costs (in terms of money, mental effort, and the connection between doctor and patient), and generate mountains of data that clinics and hospitals need to learn how to use to improve both the bottom line and patient care.

The way the business of medicine is organized has also changed dramatically.  Most doctors used to work in practices they owned alone or with a small group of other doctors. They were leaders in their own small worlds. Today, most work for large health systems or corporations formed from the mergers of hospitals and clinics. That brings steady paychecks, but less control for doctors.

In this new world, only doctors who understand the business of medicine retain strong leadership influence.

What This Gap Does

Doctors and other clinicians who feel lost about healthcare finance and leadership become prone to burnout. And that’s good for no one — doctors, patients, or the system. A lack of knowledge of business operations manifests as messy schedules that drain value from the system.  When clinicians don’t fully understand novel payment models and their structures, care does not improve.

Do All Doctors Need an MBA?

Not really. Unless you truly love spreadsheets (and if you do, bless you). But here’s a middle path:

Learn the basics. Know enough billing, coding, and finance to protect yourself and your patients.

Build leadership habits. Influence and feedback matter as much as titles.

When reading contracts, take your time and ask questions. Most contracts in medicine are boilerplate. Still, make sure you know what every clause means.

Understand the system. EHRs, new payment models, mergers. These shape your day as much as lab values. Understand how your clinic or hospital makes or loses money. And why some money-losing services can never be shut down (e.g., ICUs in hospitals).

I leave it to others to consider whether medical schools (and other clinical education programs) should trade some traditional classes for in-depth education about the business of medicine. Still, they do a disservice when they don’t at least orient their students to the business of medicine.

The Way Forward

It is fair to ask, “Why didn’t anyone teach me all this?” You are not alone. But you don’t have to stay stuck.

Pick one skill this quarter. Billing basics, contract review, or how your clinic flow really works—and focus on it. Really learn it.

Start a short monthly “Business of Medicine” huddle with your team. Go over why you exist (your mission) and how you exist and grow (your margin).

Even if you don’t have a formal title, you are the default leader of clinical teams.  Create and stick to self-made continuing education requirements that upskill your leadership voice.

And if you want help building these muscles without going back to school, keep coming back here for insights and tips.