By Michael Tetreault, Editor-In-Chief
MAY 25, 2013 | ATLANTA, GA | I have been covering this industry for nearly a decade now. I have kept an eye on many of the concierge doctors that have opened since 1996 and watched as many have succeeded beyond their wildest dreams. At the same time, I have seen many concierge doctors flounder. Running a concierge practice is not an easy road to follow, but if done properly it can be the most rewarding venture you will ever enter into.
Here is a list of 10 helpful tips new direct primary care doctors can use to help you succeed when starting up your practice:
Reach out for help. If you think you can do this alone, think again. You need staff that supports you (and believes in what your new practice model stands for), a spouse that thinks you should do this and advice from a great accountant or two, a trusted attorney and a few savvy business people to help guide you along the way.
Over the past several years at our sister publication, Concierge Medicine Today, we’ve reported on a number of doctor’s who’ve struggled to find their place in the concierge medicine and direct care marketplace in the first two years. Yes, they’ve announced their new private-pay or retainer-based medicine practice service offerings might have been priced right and when opened their doors they had some success. But about a year later, thirty percent of surveyed doctors we interviewed were still unsure of their decision and we found that one in ten doctor’s in 2011 said they were worse off than before. What they will tell you is that no matter how hard you work, there are only 24 hours in a day and you’ve got to sleep during eight or nine of them. That’s why it’s important to reach out to people who can help you.
Here’s a quick tip: If you already have great employees, make sure they understand what you are trying to do with your new practice. Education and mental buy-in amongst your staff is key. If they don’t believe in what you’re about to do, you may need to make some tough decisions. If you’re a one-person show in your medical office right now, you can reach out to a few friends and family members to help you or, if they don’t have the skills you need, you should connect with a quality concierge medicine or direct care conversion consultant that can help you. There are so many to choose from these days. From individuals experienced with your kinds of needs to more franchised models that have proven track records and a long history of success.
Funding a Direct-pay Medical Practice
Announcing that your medical practice is accepting memberships, retainer-fees or going strictly going to a cash-only payment system (sometimes called concierge medicine, private-pay or direct-pay healthcare) can be a scary and exciting adventure. Many physicians we’ve interviewed over the years tell us it’s a challenge but one they are SO HAPPY they selected. Many patients also follow and appreciate having the new same friendly doctor but with much greater time and access to his or her services.
But, you might think that having your concierge medicine or direct-pay practice suddenly overwhelmed with interest and discovered locally or even nationally would be every doctor’s dream come true. Yet, too often, that overnight success can quickly become a doctor’s worst nightmare. From local media criticism to patients misunderstanding what you’re trying to accomplish with your new business model, a private-pay or concierge-style practice that lacks the planning, capital, staff and the operational infrastructure to handle such issues can promptly get crushed when news of so-called ‘limited access’ becomes a popular hit.
Remember, interview any consultant(s) and always interview at least three or four so you can know what’s available to you in the marketplace. We’d also suggest asking them all the questions you think patients and staff might ask of you as well. For example, how long does this process take? What about my EMR System … will it change? What if this doesn’t work out? What then? What’s your fee? What’s your timeline and implementation strategy to help me do this? Do you have a patient-practice or patient-physician service contract I can review? and more.
Your overnight success may not last forever, so surrounding yourself with the right people, possibly the right consultant(s), accountant, attorney and advisers to help you.
Bonus Tip! Don’t commit to hiring full-time employees with payroll taxes and benefits until you’re sure your medical office model and strategy is here to stay.
Don’t Go Into Debt By Leasing More Office Space.
While it’s only natural to want to celebrate your new practice with a new medical office, remember that concierge-style and direct-pay physician doctor’s office’s usually end up reducing the amount of leased office space they actually need. While it might seem like downsizing your office space is a bad thing, according to our physician sources, leased office space is the most expensive annual expenditure for concierge doctors and direct primary care physicians followed by staff payroll.
Skipping this step before you start your concierge-style or direct-pay practice could cause you a lot of frustration. According to industry ‘practice conversion’ consultants, making a to-do list, crunching the numbers and reviewing your current human capital and operational resources prior to announcing any pricing or business structure change is key. It’s always easier to fight a battle on paper (or a computer spreadsheet) than to promote first and ask questions later. No matter how much pressure you’re getting from your consultant, staff or even patients to deliver new services right now, you need to take the time to sit down with your business partners, spouse, accountants, attorney or staff and map out a strategic business and marketing plan complete with goals, costs and an achievable timeline.
A concierge-style or direct-pay operation will have to estimate how many additional employees (or in many cases, how many less employees) will be needed to service the expected influx of new faces taking orders on a daily basis over the course of the next year. According to Concierge Medicine Today interviews over the years, the average concierge-style medical office employs 1.5 to 2.5 employees (2010-2012).
Prepare your staff.
Before you go on a hiring binge and prepare for the influx of phone calls, concerned patient inquiries and unavoidable angry and tears of joy conversations, it’s important to figure out how much working human capital you’re going to need to meet your local markets demand. Your conversion consultant and/or business advisors and business plan should be able to answer and address all of these questions for you and help train your staff to address these questions and more.
Communicate with your patients often and early.
Communication is the lifeblood of any business relationship, but it’s even more important when your concierge medicine practice suddenly takes off. Once you’ve worked with your trusted team of advisors or even conversion consultant to formulate the proper strategy, letters, printed promotional materials, met with your staff and educated them on what to say and what not to say, and you’ve approved your strategic plan – the biggest mistake a doctor can make now is failing to communicate with his or her patients that there is a deadline in which to join and after that, it’s might too late. Remember, the majority of concierge medicine and retainer-based practices limit their patient-base to approximately 300-600 patients each year.
Don’t apologize to your patients for the business changes you’re making. This new process will help them. Inform them that this is a positive change and will help you maintain more secure patient-physician communication on a timely basis and offers them a much more affordable payment system with routine and convenient access to their doctor.
Communication is the lifeblood of any business relationship, but it’s even more important when your concierge medicine practice suddenly takes off. Once you’ve worked with your team or consultant to formulate the proper communication, the biggest mistake a doctor can make is failing to explain the value, features and benefits of this new business model with his or her patients. For example, a patients immediate response might be one of great acceptance and they will sign-up with your right away. On the other hand, there will be patients that might feel like you’re abandoning them after years of service. They’ll say things like, ‘you’re just doing this for the money.’ Then, you’ll have to tell them, ‘It’s not really about that at all, I’m afraid. I am doing this because I want to see my patients more than just a few minutes each visit and this is a business model that offers greater access to myself and my staff that allows us to maintain greater communication with you and help you with your healthy lifestyle.’
This can be one of the most scary aspects of conversion but it’s one that is necessary. Many ‘conversion consultants’ can help coach you and your staff through various conversational scenarios that might occur. Sometimes, some consultants will even place an outside person to help you and your staff explain the new model features and benefits in your practice for a few weeks.
If you build it, they WILL NOT Come. So, invest for the future now.
While it may be tempting to reap the profits from your hot, new medical business model right away, it’s important to re-invest some of those profits to help your business grow and get more patients. According to interviews over the past five years with concierge doctors and private-pay physicians and their staff, the number one most successful way they attracted new patients to their practice was by … ‘hiring a marketing agency’ to help with the educational component of your practice.
Bonus Tip! Don’t get this confused with what a ‘conversion consultant’ and ‘marketing consultant’ or ad agency is. These are two very different types of consultants. A Marketing Consultant (or Marketing Firm) should have marketplace expertise in both writing and designing materials and effective, lead-generating communication for your practice. Marketing agencies or marketing consultants should offer both offline and online advertising strategies to grow your patient-base and be able to outline a plan that works with your budget. A ‘Conversion Consultant’ is there before you make the switch to help you organize internally, prepare emotionally and plan accordingly as you announce your new business model and pricing structure to your existing patients. The marketing consultant might be your trusted patient-referral resource and growth advisor several months after the consultants have left your practice and your annual patient attrition is beginning to increase. See the difference?
Learn from your mistakes.
After the excitement of the initial patient rush has died down, take some time to sit down with your staff to figure out what went right, what went wrong and what you think you could do better in the future. This will help you put a strategy in place for the future.