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Starting A Practice: Start on a Shoestring Versus Ready Out of the Gate?

Matthew Mintz, MD, discusses whether having your perfect practice from Day 1 a dream come true or a burden to growth and development.

Dr. Julie K Gunther, a Family Physician and Direct Primary Care (DPC) pioneer (who you can, incidentally, watch in action in our How-To Physician series. Her episode kicks us off, as it’s the first: HOW TO BE A GREAT DOCTOR & STILL TAKE A SPONTANEOUS DAY OFF. Find details, and watch, here.) recently posted on a DPC doctor’s social media site a very interesting question:

 

“What would it mean/have meant to you if, literally you woke up one year and one day after you opened and your practice was fully furnished, fully set up, you were at your ideal patient number and had staff fully trained and in place?”

 

Whether you are starting your own DPC practice, a direct care specialty practice, or any type of private practice for that matter, this question gets into the balance between growing your practice slowly (growing into your practice) vs. starting your practice set up from day one as you ideally envision it.

There are multiple ways to start a practice.

At the extremes there is starting small and growing slowly, or starting big and hoping that the patients find you.

There are certainly pros and cons to both strategies, and the right answer for your practice likely lies somewhere in between.

Having started two practices on my own, and reflecting on this question, I think that in order to answer this question, it is best to break it into four different categories: stress, money, time, and vision.

 

While there are multiple ways to start a practice. At the extremes there is starting small and growing slowly, or starting big and hoping that the patients find you. Click To Tweet

 

 

Stress

I left my former academic practice because two local physicians wanted to sell their direct care (cash, fee for service) practice quickly, and I was so convinced this was going to work out, that I gave my 90-day notice.

Unfortunately, about 30 days later, it was clear that these doctors wanted too much money, or at least more than I was willing to spend.

Ultimately, this ended working out well for me, as I now have a fully paneled DPC practice and spent nearly $100K less doing this on my own.  That said, the stress of becoming profitable in a short period of time was a little overwhelming, as I was starting my practice later in my career and worried about things like paying for my college bound daughter’s tuition.

 

I now have a fully paneled DPC practice and spent nearly $100K less doing this on my own.  That said, the stress of becoming profitable in a short period of time was a little overwhelming.

 

This stress likely caused me to make some initial bad decisions regarding how to sustain my new practice (a topic for another post).  In addition, since I had given notice, I now had 60 days to set up a practice.

Having space, staff, and patients ready to go at that time would have definitely relieved some of that stress, though ultimately would have not led me to the practice I now have.

 

Money

As the adage goes, you need to spend money to make money.

One advantage of a DPC practice, is that you can really start up a practice on the cheap.

The only things you absolutely need are a medical license (which you probably already have), malpractice (which is initially inexpensive), an EMR and practice management system (not a huge expense), and some way of patients communicating with you (cell phone, website, email, etc.).

 

The only things you absolutely need are a medical license, malpractice, an EMR and practice management system, and some way of patients communicating with you. #privatepractice Click To Tweet

 

With the growth of telemedicine since the pandemic, and the fact that some DPC docs have house call only practices, you don’t even need rent or staff (which are generally your biggest expenses) to get started.

However, while websites can be done on the cheap, if you really want people to find you on the Internet, you are going to have to pay money, so you rank high in Google searches (Search Engine Optimization or SEO).

Also, while you could start doing telemedicine, those patients due to distance and other reasons may not easily transition into full time DPC patients.  Finally, perception is often reality, and patients may not be satisfied seeing you in a small and/or sub-leased space.

Younger physicians considering starting a practice, who are burdened with student loans and may have recently purchased a house, are understandably fearful of incurring more debt.  However, unlike credit card debt, business debt is “good debt” because you are investing in yourself.  The loan you take out today to get started will be virtually unnoticeable when you are up and fully running a few years later, and may be (is likely) worthwhile in the long run.

 

Time

While I have separated stress, money, and time; they are all inter-related.

There are two time-related factors at play- the time it takes for your practice to grow and become profitable and the time you are able to spend growing your practice.

If you have other sources of income (your partner makes enough money to support you and your family), then you really do have the luxury to take your time.  Again, this was not my case, so I needed to work incredibly hard to find patients to grow my practice.

It also takes significant time to do this, including networking, marketing, meeting with employers and potential patients, etc.

You can do other things (urgent care, locum tenens, side gigs) to maintain income while growing your practice, but this takes away from the time you need to actually build your practice.

 

Another example is staff.

If you hire a staff person from the start, you will certainly be overpaying them until you have a certain volume of patients.  On the other hand, if you are answering all the messages and doing all back-end jobs, this too will take away time from your ability to grow your practice when you are not seeing patients.

Sometimes it is worth it to pay yourself now (loan) so you can build your practice and get it up and running quicker, rather than avoid incurring more debt but not being able to spend the time you need to build and grow your practice.

 

Vision

Had I bought the doctors’ practice, it would have cost me a bit more money, but saved me significant time and stress.

While it might have been worth it, it would have definitely taken me some effort to transform their existing practice into what I had envisioned.  However, while I certainly had a strong vision of what I wanted my practice to look like, it has definitely changed over time.

For example, I now have several non-DPC services as part of my DPC practice (I have a 3 part series on this on Doug Farrago’s  DPC News site).  I very much enjoy having these services as part of my practice, which I probably would have never considered if everything were already set up at the beginning.  My patient management strategies have also changed over time, as I have learned how to better run my practice over time.

 

while I certainly had a strong vision of what I wanted my practice to look like, it has definitely changed over time.

 

In summary, there is no real right answer between the two extremes of starting from nothing and starting ready out of the gate.

However, I think this is an important question to ask for anyone considering or starting a medical practice.

In addition, based on social media posts I have seen recently, it seems like the DPC mantra that starting on a shoestring is the way to go, but I really think it is important for those starting a new practice to consider investing in themselves as opposed to avoiding debt.

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