Medical education mainly focuses on clinical knowledge and patient care skills. However, this focus often leaves little time for essential business topics like management, operations, finance, human resources, marketing, risk management, and information technology. According to the 2023 AMN Healthcare Final Year Resident Survey, nearly 48% of medical residents feel unprepared for the business aspects of their work. Additionally, 61% said they had no formal business instruction during residency.
This gap affects not only residents but also the institutions that hire or work with them. The AMA has recognized this issue and developed a Continuing Medical Education (CME) course called “Introduction to the Business of Medicine.” The course aims to provide physicians with basic knowledge in seven key business areas necessary for running a practice. Despite such efforts, many new physicians still face challenges when moving from residency to independent or private practice.
Lack of business training creates several difficulties for physicians early in their careers. Without a solid understanding of healthcare finance, revenue cycle management, and operational workflows, a practice’s financial health and regulatory compliance can suffer.
For example, revenue cycle management is important for submitting claims accurately and on time while reducing denials. Insufficient knowledge about Evaluation and Management (E/M) coding—an essential part of billing—can cause lost revenue and higher audit risks. E/M coding is often underrepresented in medical training despite its importance for proper documentation and billing. Experts like Clair Kelley from RubinBrown suggest starting comprehensive E/M coding education as early as medical school or residency to prepare physicians for these administrative demands.
Deficiencies in human resources management may lead to staffing problems and legal risks. Physicians often need to handle recruiting, retaining staff, and following employment laws such as HIPAA and the anti-kickback statute. Poor understanding of these matters can threaten both the operation and legality of a practice.
The lack of business skills also relates to physician burnout. According to the AMN survey, nearly 81% of residents experience burnout during training. Burnout is linked to feelings of being overwhelmed by administrative tasks and financial pressures. Women residents are more likely to feel this way, with 30% of all residents saying they would not choose medicine again.
The job market for physicians remains strong. In 2023, 56% of final-year residents received over 100 job offers. Despite this, 68% prefer hospital employment, while only 6% choose solo practice.
This shows that many young doctors may feel more comfortable working in organizations that handle business operations and compliance. Those who decide to join private or group practices must be ready to manage the business side of healthcare.
Organizations like SimpliMD help by providing business coaching, educational content, and communities tailored to physicians managing small practices. These resources assist doctors in maintaining professional independence while improving their understanding of finance, legal issues, and daily operations.
Quality improvement (QI) education is becoming an important part of medical training and affects practice success. For example, New York Medical College recently introduced an Area of Concentration in Quality Improvement for medical students. This program teaches skills such as data collection, teamwork across disciplines, and developing projects aimed at better healthcare outcomes.
Quality metrics now influence Medicare and Medicaid payments, making QI knowledge important for both physicians and practice administrators. Residents must learn to lead QI efforts to meet changing healthcare standards. The Accreditation Council for Graduate Medical Education requires resident participation in QI projects, emphasizing its significance in clinical education.
Advances in technology, especially artificial intelligence (AI) and workflow automation, are changing how practices operate. AI can lessen burdens related to business management, data processing, and patient communication, which are areas some physicians find challenging without business training.
An example is front-office phone automation and answering services by companies like Simbo AI. These tools use AI-based natural language processing to handle appointment scheduling, patient questions, and follow-up calls. Automating front-desk tasks reduces workload, limits mistakes, and improves patient experience.
AI can also support revenue cycle management by improving coding accuracy, detecting billing errors, and identifying claims likely to be denied. These tools help ensure compliance and optimize reimbursements without requiring physicians or staff to become billing experts. AI-driven analytics can monitor workflows, track performance, and recommend improvements that balance business objectives with quality care standards.
For hospital and practice managers, AI solutions offer benefits such as better operational efficiency and smarter resource use. When employees spend less time on routine work, they can focus more on patient care and strategic business areas like marketing and risk management.
Practice administrators and IT managers are key in closing these knowledge gaps. They manage technology platforms like AI and electronic health records (EHR) and help clinical staff understand their advantages and limits. Good collaboration between administrators and clinicians ensures that technology improves workflow without interrupting patient care.
Administrators also integrate business education on finance, operations, and compliance into ongoing training. They help arrange access to external resources such as AMA CME courses or programs like those from SimpliMD. Supporting business education alongside clinical training makes practices more resilient.
IT managers must ensure technology systems follow laws like HIPAA and protect patient data from cyber threats. As AI and telehealth tools grow more common, strong security measures become essential to safeguard a practice’s legal and financial standing.
The ongoing gap in business knowledge among medical students and residents requires action from healthcare institutions, professional groups, and educators. Programs like the AMA’s CME course offer basic business training. Newer initiatives in quality improvement add skills beyond clinical care.
Residency programs can include formal instruction in business management, coding, and regulations. Partnering with external vendors and educational platforms can enhance traditional training with tailored learning and feedback aimed at young physicians.
At the practice level, administrators should encourage doctors to use available resources and adopt technology to lower administrative loads. AI tools for front-office tasks, billing help, and data analysis can fit smoothly into workflows, improving efficiency and reducing burnout risk.
Physicians still have limited preparation for the business side of medicine despite acknowledgment of its importance. Business training needs to be a standard part of medical education and residency to equip doctors for the complex financial, operational, and legal aspects of healthcare.
Medical practice administrators, owners, and IT managers play an important role in creating environments where business knowledge and technology come together to support practice sustainability and patient care.
The primary focus is on enhancing clinical skills and knowledge, leaving limited opportunities to learn about organizational elements and the business aspects of healthcare.
The AMA developed the online CME course ‘Introduction to the Business of Medicine’ to cover the management, financing, and regulatory aspects of healthcare delivery.
The seven areas are General Management, Operations, Human Resources, Finance, IT, Risk Management, and Marketing.
A module offers guidance to evaluate how a practice environment matches their priorities and emphasizes that physicians have various options available to them.
Key considerations include selecting, implementing, and optimizing revenue cycle management systems, managing claims submission, and responding to claim denials.
Human resources focus on evaluating staffing needs, recruiting, and maintaining support staff, with an emphasis on legal regulations and internal personnel guidelines.
Understanding practice management is essential to grasp the business of medicine, including appointment scheduling, patient data analysis, and billing.
Physicians must be informed about laws such as the anti-kickback statute, physician self-referral law, and HIPAA to avoid legal complications.
The AMA provides six steps to integrate telehealth and insights into the evolving role of EHRs, cybersecurity, and AI in healthcare.
The AMA offers resources and support to help physicians start and sustain success in private practice, including a dedicated section for private practice physicians.
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