Trusted Advisors and Why Your Practice Needs Them
Episode 96: Trusted Advisors and Why Your Practice Needs Them
Welcome to the Medical Money Matters Podcast, where we break down the complexities of running a successful medical practice, from financial strategies to operational efficiency. Whether you’re a physician or a practice administrator, we’re here to provide insights that help you run your practice more smoothly and profitably.
Today, we’re diving into a topic that doesn’t always get the attention it deserves: trusted advisors and why your practice needs them. Running a medical practice isn’t just about seeing patients—it’s also about making smart business decisions. And sometimes, those decisions require expert advice. So, whether you’re just starting your practice or you’ve been in the game for years, having the right advisors by your side can be the difference between struggling to stay afloat and thriving. We’ll talk about what trusted advisors do, why they’re essential, and how to build a team of advisors who truly understand the healthcare landscape.
Let’s jump right in by defining what we mean by ‘trusted advisors’ and how they can play a role in the success of your practice.
At its core, a trusted advisor is someone who brings deep expertise and offers strategic guidance tailored to your specific needs. Unlike a vendor or a consultant who might just complete a task for you, a trusted advisor is more of a long-term partner. They help you anticipate challenges, seize opportunities, and avoid mistakes.
Think of them as your strategic sounding board. You can bounce ideas off them, get their take on a complex issue, or ask them for advice on long-term planning. And the key word here is ‘trusted.’ You should feel confident that they understand your practice, your goals, and the healthcare environment as a whole.
Exactly. So, who qualifies as a trusted advisor? In the context of a medical practice, we’re talking about professionals like financial advisors, legal counsel, compliance experts, practice managers, and even real estate mortgage and development advisors—especially if your practice owns or plans to develop property.
Right, and that’s a big one. We’ve seen many practices get into trouble when they try to expand or move without consulting the right experts. We’ll talk more about that later, but the point here is that trusted advisors go beyond just handling tasks for you—they help guide the strategic direction of your practice. And it’s not just about their expertise, either. A trusted advisor needs to have a deep understanding of the healthcare industry specifically. Healthcare is unique—it has its own regulations, payer dynamics, and financial challenges. Your advisors need to be able to navigate those complexities just as well as you do.
Let’s also address a common misconception: many smaller practices or even some midsized ones think that trusted advisors are only for large hospital groups or corporate practices. That’s not true. Every medical practice, regardless of size, can benefit from the expertise and strategic guidance these advisors provide.
Now that we’ve defined what trusted advisors are, let’s talk about how they can specifically help your practice. There are four key areas where trusted advisors can make a huge difference: financial guidance, navigating complex regulations, operational efficiency, and risk management.
Let’s start with financial guidance, which is often the area where many practices feel the most immediate pressure. A financial advisor who specializes in healthcare can help optimize everything from your cash flow to your revenue cycle management. They can also provide advice on the right compensation models for physicians, so that you’re staying competitive but also maintaining financial stability.
I can’t tell you how many practices miss out on revenue because they’re not managing their payer contracts effectively or they’re making costly billing mistakes. A good financial advisor can catch those issues before they become bigger problems. In fact, I know a practice that avoided a huge loss—over $100,000—just because their advisor caught a billing error early on.
And that brings us to another crucial role—navigating the maze of healthcare regulations. We all know that healthcare is one of the most heavily regulated industries in the world. You’ve got Stark Law, HIPAA, MACRA, and countless other regulations to keep track of. A trusted legal or compliance advisor ensures you’re following the rules and helps you avoid costly penalties.
For example, let’s talk about MACRA, the Medicare Access and CHIP Reauthorization Act. It completely changed how practices report quality measures and get reimbursed. If you didn’t have an advisor keeping you up to date on that, your practice could be losing out on a significant amount of revenue or, worse, facing penalties.
I’ve seen practices fined hundreds of thousands of dollars because they didn’t have someone in their corner who understood the regulations. That’s where a legal or compliance advisor can save your practice—both financially and operationally.
Another area where trusted advisors shine is operational efficiency. Many practices run into bottlenecks with workflows, staffing, or scheduling, and they don’t even realize it’s dragging down their profitability. A practice management consultant can take an outside look and find ways to streamline operations
And as your practice grows—whether that’s adding new providers, expanding into new specialties, or opening a second location—an advisor can help you plan for that growth. They’ll make sure that your finances, staffing, and operations are ready to support the expansion without overwhelming your current systems
Speaking of expansion, let’s not forget about real estate and development advisors. If you’re buying, leasing, or developing property for your practice, this is where a real estate advisor comes in. They’ll help you evaluate locations, negotiate leases, or secure the best mortgage terms. And it’s not just about finding a good deal—they’ll make sure the real estate decisions you make align with your long-term business goals
Exactly. And healthcare real estate is a unique beast. You need to consider things like zoning for medical facilities, accessibility for patients, and the infrastructure required to support specialized medical equipment. Without the right advisor, you could find yourself stuck in a location that doesn’t meet your needs—or worse, dealing with costly real estate mistakes down the line.
Finally, we can’t talk about trusted advisors without mentioning risk management. Healthcare practices are exposed to a wide range of risks—financial, legal, and operational. A risk management advisor helps you identify these risks early and put measures in place to mitigate them
This could involve anything from helping you choose the right malpractice insurance to advising on cybersecurity measures for protecting patient data. In one case we saw, a practice significantly reduced its insurance premiums after their risk management advisor reviewed their coverage and found areas where they were overpaying.
And those are just a few examples of the critical roles that trusted advisors can play in your practice. Now, what happens if you don’t have these advisors? That’s what we’ll cover in the next segment. The financial and operational impact of not having trusted advisors can be staggering.
Yes, we’ll dive into that next, but before we do, if you’re listening and starting to think about the gaps in your advisory team, you’re not alone. Many practices don’t realize they need these experts until it’s too late. We’ll help you avoid that in the next segment.
In the first half of today’s episode, we covered the importance of trusted advisors, how they can help your practice with financial, legal, operational, and real estate challenges, and why every medical practice—no matter the size—needs them.
Now, let’s talk about what happens if you don’t have these advisors in place. The absence of trusted advisors can create serious financial, legal, and operational problems for your practice, many of which might not be obvious until it’s too late.
Let’s start with the financial impact. One of the biggest ways practices lose money is by missing out on opportunities to optimize their revenue. For example, without a financial advisor to analyze payer contracts or ensure proper revenue cycle management, your practice could be underbilling or accepting lower reimbursement rates than you should.
Exactly. I’ve seen practices that didn’t negotiate their payer contracts effectively end up with reimbursement rates that were 15-20% below market standards. Over time, that’s a massive amount of lost revenue. Not having an advisor who understands healthcare billing and payer dynamics can leave a lot of money on the table.
Then there’s the issue of growth. Without a trusted financial advisor, you may hesitate to expand or miss opportunities to reinvest in your practice—whether that’s hiring new staff, acquiring new technology, or adding a new location. Without guidance, it can feel too risky to make those moves.
Operational inefficiencies are another common area where practices struggle. Without an outside expert to assess your practice’s workflows and processes, you may not even realize how much inefficiency is costing you. Staffing misalignments, scheduling bottlenecks, and inefficient workflows can all lead to reduced patient satisfaction and physician burnout.
And even worse, these inefficiencies usually don’t correct themselves. They compound over time. A trusted advisor can take a bird’s-eye view of your practice operations and help you see where you can save time and money, which ultimately improves patient care and employee satisfaction.
Then there are the legal and regulatory risks. Without legal advisors or compliance experts, you’re exposing your practice to significant risks. Healthcare regulations are complex, and they change frequently. If you’re not up to date on the latest changes in HIPAA, Stark Law, or MACRA, you could be facing audits, fines, or even lawsuits.
And let’s not forget the role of real estate advisors here. Expanding into new locations or buying property without consulting an expert can lead to long-term financial problems. You might end up locked into a lease with unfavorable terms or purchasing a building that requires costly renovations. A real estate mortgage or development advisor can help you avoid these pitfalls by evaluating property from a financial and strategic perspective.
It’s the cost of not knowing what you don’t know. And the financial losses can be staggering.
To illustrate this, let’s talk about a real-world case. I know of a small independent practice that didn’t have a financial advisor. They were struggling with cash flow issues but didn’t realize that their payer contracts were underpaying them. They spent months trying to improve operations internally, but the issue wasn’t operational—it was financial. When they finally brought in a trusted advisor, they discovered they had lost over $200,000 in underpayments over the previous two years.
And that’s not uncommon. Another practice we know ran into a compliance issue with HIPAA. They hadn’t updated their systems to protect patient data adequately. When they got audited, they were hit with a hefty fine—$75,000—and faced a major reputational hit. If they’d had a compliance advisor monitoring their systems, they could have avoided that entirely.
So, whether it’s lost revenue, operational inefficiencies, or regulatory compliance, the cost of not having trusted advisors is clear. But that brings us to the next question: how do you go about building a network of trusted advisors?
Let’s walk through the key types of advisors every medical practice should consider and how to choose the right ones.
First, let’s go over the core advisors every practice needs:
- A financial advisor to help with cash flow, revenue cycle management, and growth strategies.
- A legal advisor to handle compliance, contracts, and employee issues.
- A practice management consultant to help streamline operations and improve efficiency.
- A real estate mortgage and development advisor to guide property investments, whether you’re buying, leasing, or expanding your practice’s physical footprint.
- An IT or cybersecurity advisor to protect your data and ensure your systems are secure.
Each of these advisors brings specialized knowledge that your internal team probably doesn’t have, especially if you’re a smaller practice. But how do you find the right ones?
Here’s what you should look for:
- Experience in healthcare: It’s crucial that your advisors understand the unique challenges of running a medical practice. Healthcare-specific experience ensures they’re familiar with industry regulations, payer dynamics, and patient care priorities.
- Proven track record: Ask for references or case studies from other practices they’ve worked with. You want to see tangible results—whether that’s helping a practice avoid a regulatory fine or improving its financial performance.
- Transparent communication: You want advisors who will explain things clearly, give you honest feedback, and work collaboratively. You don’t need someone who’s just telling you what you want to hear.
- Fee structure transparency: Make sure you understand how your advisors charge for their services. Are they charging by the hour, or do they have a retainer model? Transparency is key to avoiding unexpected costs down the road.
You also want to consider how they’ll fit into your long-term plans. A trusted advisor isn’t just a one-time consultant—they should be someone you build a lasting relationship with. Regular check-ins, updates on regulations or financial trends, and strategic planning sessions should all be part of that relationship.
Once you’ve built your advisory network, the next step is leveraging their expertise to drive your practice forward. Here are some practical ways to get the most out of your advisors.
First, make sure your advisors are involved in your strategic planning. Whether you’re setting financial goals, planning to expand, or introducing new services, bring them into the conversation early. A financial advisor can help ensure you’re budgeting correctly for a new hire or expansion, while a legal advisor can make sure all your contracts are airtight before making big changes.
And don’t forget your real estate advisor! If you’re considering moving to a larger space or adding a second location, they can provide insight on property values, mortgage options, and even help you avoid zoning issues.
Next, use your advisors to stay on top of your financial health. For example, a good financial advisor will regularly review your payer contracts, analyze your cash flow, and provide insights on where you can save or reinvest in your practice. They can also help with tax planning, making sure you’re taking advantage of any credits or deductions available to healthcare providers.
We worked with a practice that improved its profitability by 15% in one year, simply because their financial advisor renegotiated their payer contracts and helped them optimize their revenue cycle management. That’s the kind of long-term benefit a trusted advisor brings.
And let’s not forget the role of advisors in solving problems before they escalate. Advisors can help you foresee challenges—whether it’s a regulatory shift, a downturn in patient volume, or an IT system that’s vulnerable to cyberattacks. By bringing in your advisors early, you can address these issues proactively rather than reacting when it’s too late.
Absolutely. In today’s healthcare environment, being reactive can be costly. The more proactive you are, the better equipped you’ll be to navigate challenges and maintain steady growth.
Let’s close out today’s episode with some real-world examples of how trusted advisors have made a measurable impact.
The first is a story of moving From Financial Instability to Growth for a small practice that was struggling financially, largely due to cash flow issues. Their trusted financial advisor stepped in, identified gaps in their revenue cycle management, and implemented a better system. Within a year, the practice saw a 20% increase in cash flow and improved its overall profitability. The advisor also helped them negotiate better terms with their payers, which directly contributed to their financial turnaround.
It’s a great example of how a small change, guided by the right expertise, can make a massive difference. That practice went from barely breaking even to setting itself up for future growth—all thanks to the proactive support of their trusted financial advisor.
Nest is an example of Navigating a Regulatory Challenge
A mid-sized practice was flagged for a compliance issue related to HIPAA. Their legal advisor stepped in right away, guided them through the audit process, and implemented updated compliance protocols. Not only did they avoid hefty fines, but the legal advisor also ensured they were prepared for future regulatory changes.
And that’s a big one. We’ve seen how regulatory non-compliance can sink a practice’s reputation. Having a legal advisor who specializes in healthcare regulations meant they were able to resolve the issue quickly, with minimal disruption to their operations.
Finally, let’s talk about a practice that was expanding into a new building. They didn’t realize how complex the process of securing financing, managing construction timelines, and complying with zoning laws could be. Their real estate mortgage and development advisor helped them secure a favorable loan, navigate local regulations, and even negotiate with contractors to keep costs down. The project was completed on time and under budget, and they’re now thriving in their new location.
That’s a perfect example of why real estate advisors are essential when you’re looking to grow your practice. Real estate isn’t just about finding a location—it’s about ensuring that location aligns with your long-term business goals and doesn’t put unnecessary financial strain on your operations.
To wrap up, we’ve covered a lot of ground today. Trusted advisors aren’t just a nice-to-have—they’re essential for protecting your practice, optimizing its performance, and guiding you through the complexities of running a medical business.
Whether it’s financial, legal, operational, or real estate advice, having the right team of experts can help you avoid costly mistakes, improve profitability, and position your practice for long-term success.
So, take a moment to evaluate the advisors you currently have—or if you don’t have them yet, think about where you could benefit from expert guidance. If you need help building that network, Health e Practices is here to assist. We specialize in connecting medical practices with the right advisors to meet their unique needs, and we’d love to make introductions for you.
Don’t wait for a problem to arise before bringing in experts. Get ahead of the curve and make sure you’re building a team that supports your practice’s growth and stability. Thanks for joining us on this episode of the Medical Money Matters Podcast! If you found this helpful, please subscribe, leave us a review, and share the episode with your colleagues.
And as always, feel free to reach out with any questions or topics you’d like us to cover in future episodes. Please join us for our next episode, where we’ll tackle another facet of medical group finance and operations.