How to Make It as a Solo Practice Owner
Group medical practices appear to have become the standard for today’s healthcare delivery model, with financial considerations as the main driver behind this trend. In the United States, physicians are more likely to practice in a group setting than in solo practice. But not every provider finds that environment a good fit.
Providers who choose solo practices face a unique set of challenges. The most basic principle of practice management is to keep costs down while maximizing earnings. The most common cause of a practice failing is having too much overhead with an excessive debt to income generation ratio. Practices that can keep overhead and costs low while being open to alternate revenue sources have the best chance of thriving.
As a solo practitioner, considering unique practice options such as specializing in a niche practice or developing a concierge model of practice expands the likelihood of profitability and success.
The rundown on reimbursements
Reimbursement issues are particularly problematic for the solo practitioner. Payment rates from third-party payers and insurers are lower for solo healthcare providers, or HCPs, who don’t have the leverage of a larger practice. Solo HCPs also may not be able to afford up-front investments required for inclusion in Accountable Care Organizations (ACOs) and medical homes. What’s more, regulatory requirements resulting from the Affordable Care Act are challenging for the solo HCP to meet. Costs for electronic medical records systems and mandatory quality reporting can result in escalating overhead as well.
A strategy to protect against low reimbursements is limiting the number of patient panels from various insurers, including Medicare. Careful analysis of your most commonly billed codes with a fee analysis can help you determine if attempting a rate negotiation with a payer is worth your time.
If your reimbursements are as good as they’re likely to get, the next step is considering more creative options like concierge or niche practices for creating revenue.
What is a concierge practice?
A retainer-based practice, better known as the concierge model, offers smaller patient panels, longer appointment times, personalized care, and easier access to appointments and providers in exchange for an annual fee. Fees may be based per person or family. Panel sizes are generally limited to 350 to 500 patients, and retainer fees range from $1,200 to $2,400 annually based on the level of access to the provider.
The benefit of the concierge model is steady and predictable income for the provider generated by the membership fee. Patients who enjoy the concierge model like high-quality, individualized care with an emphasis on prevention and wellness. Providers who are not overwhelmed with large panels can provide more time and attention to individual patients.
What is a niche practice?
Niche practices offer specialized services serving particular client needs. A niche practice may focus solely on one specialization, or an HCP may begin to provide additional niche services along with their standard practice — such as when a family HCP brings in cosmetic laser services in addition to their family practice. Niche markets are typically cash-pay procedures that generate income above and beyond what would be typically reimbursed through healthcare plans.
Areas well suited for niche practice include the following:
Aesthetic services like Botox and dermal fillers
Cosmetic laser services
Hormone therapy/low testosterone treatment
Lifestyle medicine
Weight management services
Expanding services
Billable services add value for patients and generate more business for the practice. Adding an array of services to your practice menu is another way to capture extra revenue.
The following services are billable to insurance and create a revenue stream:
Digiscope dilated eye exams
Electrocardiograms
Hearing evaluations
Laboratory services
X-ray services
Account for any up-front expenses when purchasing equipment needed to provide the services, and for how long it will take to see a return on your investment. After that point, all earnings are accretive to the practice.
Seek satisfaction for patients and providers
When deciding what services to offer, analyze your patient population, local needs, and local competition. New services should be profitable and something you can be excited about delivering as a provider. Don’t make it just about the money, but about both the provider and the patient’s satisfaction. Satisfied patients turn into long-term patients who keep coming back for repeat services.
Consider the following when selecting services to add to your practice:
Listen to your patient’s needs. Is there an issue that comes up frequently for your patient population that you could solve?
Are there services that patients are requesting recommendations or referrals for that you could deliver?
Are any of your current services tied to a quality improvement opportunity? Take, for example, point of care testing for hemoglobin A1C in your diabetic patients.
How can your office offer just a little extra? Saving a patient a trip to another location for an X-ray or lab draw has value for your patients and generates revenue.
Risks and rewards
Solo practices present their own challenges, but they can become a profitable and satisfying business model with creativity. HCPs that think out of the box regarding practice models and services have an advantage for generating income that is not dependent on traditional reimbursement models.
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