Or How to Ethically Run Healthcare As a Business
Dear younger me,
Welcome back. In my last letter, I told you how healthcare is different from other businesses. Now I need to tell you what to do about it.
A healthcare leader stands at the intersection of medicine and business. Profit and purpose. Efficiency and ethics. It’s uncomfortable. You’ll want to pick a side. Don’t. Your job is to lead in this messy middle ground. Let me show you how.
Finding Your Balance
You can’t ignore business realities. Your organization needs to be financially sustainable. You need to consider efficiency, productivity, and, yes, profit. But you also can’t run healthcare exactly like other businesses. You have to find a balance.
Here’s what I’ve learned over the past two decades of getting this wrong and, occasionally, getting it right.
Understand the Numbers, But Don’t Let Them Decide Everything
You will need to learn to read financial statements. You need to understand what a margin is, what contributes to your costs, and where revenue comes from. I know you hate this stuff. Learn it anyway.
But here’s the key. Use the numbers to inform your decisions, not make them. When someone shows you data that says closing the clinic in the low-income neighborhood would save money, don’t just look at the spreadsheet. Ask who will suffer, who will lose out, and what will happen to them. Ask what your mission says about serving vulnerable populations. The numbers matter. But they’re not the only thing that matters.
Be Honest About the Tradeoffs
You’re going to face situations where there’s no good answer, where any choice you make will disappoint someone. Where business needs and patient needs genuinely conflict.
Don’t pretend these conflicts don’t exist. Don’t hide behind jargon or vague statements about “doing what’s best.” Best, for whom? Best, how?
Be honest. Say, “This is hard. We need to keep the lights on, but we also need to serve patients who can’t pay. Here’s what I think we should do and why.”
People respect honesty more than false certainty. Your staff knows when you’re facing an impossible choice. Pretending it’s easy makes them trust you less.
Use Business Tools to Support Medical Goals
Here’s something that will surprise you.
A lot of business thinking is actually useful.
Data analysis can help you identify gaps in care.
Process improvement can reduce waiting times.
Strategic planning can help you expand services to underserved communities.
The problem isn’t business tools.
The problem is when business goals replace medical goals.
Someday, you will lead a project to reduce hospital readmissions. The administration will care about this because Medicare penalizes high readmission rates. But you’ll care because readmissions mean your patients didn’t get what they needed the first time.
Same project. Different motivations. Both valid.
Use business tools to be better at medicine.
Use data to find patients who are falling through the cracks.
Use efficiency improvements to free up more time with complex patients.
Use financial analysis to show why investing in prevention saves money long-term.
Business and medicine don’t have to be enemies. They can be partners. But medicine always has to lead.
Remember the Person Behind the Number
This is the most important thing. And it’s the easiest to forget when you’re staring at spreadsheets all day. Behind every number is a human being having the worst day of their life.
That patient in bed 202-West isn’t just a “length of stay problem.” She’s someone’s grandmother who’s scared to return to an empty home until she’s fully recovered.
That readmission isn’t a “quality metric failure.” He’s a man who didn’t understand his discharge instructions because they were written at a college reading level, and he dropped out of high school.
When you’re making decisions as a leader, picture a specific patient. Not a theoretical one. A real person you’ve cared for. Ask yourself: would this decision be good for them?
This isn’t soft thinking. This is how you stay grounded. This is how you avoid making choices that look good on paper but fail in reality.
What I Wish I Had Known Then
Looking back across twenty-plus years, here’s what I wish I could tell you on that first day.
You don’t have to choose between being a good doctor and being a good businessperson. That’s a false choice. You have to be both. Yet, understand how healthcare differs from other businesses. It will enable you to excel in both areas.
You will make mistakes and disappoint people on both sides. That’s the job.
But if you stay true to why you became a doctor, if you use business thinking to support medical goals rather than replace them, and if you’re honest about the hard choices, you’ll be okay.
The people who succeed in healthcare leadership aren’t the ones who ignore business realities. They’re not the ones who put profit above everything else either. They’re the ones who can hold both truths at once: healthcare is a business, and healthcare is fundamentally different from other businesses.
You’ll figure this out eventually. I’m just hoping this letter helps you figure it out faster than I did.
There is No Dark Side
One Last Thing. Some day you will be offered a role in an insurance company. You will be shocked. You’ll think, “Insurance companies are the enemy. They deny care. They put profits over patients.”
Take the job anyway. You’ll learn that insurance companies face the same tensions you do in other parts of our healthcare system.
They’re trying to balance costs and care.
They’re making impossible choices.
They’re trapped in the same broken system you are.
And understanding both sides — delivery and payer — will make you a better leader than you can imagine right now.
But that’s a letter for another day.
For now, take a deep breath. You’re starting an important journey. Healthcare needs leaders who understand both the business and the mission, who can speak both languages, and who can find the path between profit and purpose. You’re going to be one of those leaders. It just takes time.
Good luck. You’ll need it. But more than luck, you’ll need wisdom. And wisdom comes from understanding what makes this work different from anything else.
Now you know.
— Your older, slightly wiser self.
