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Have you ever thought about starting a membership medicine style practice? Well, whether you are concerned about the optics, looming Medicare cuts, non-compete clauses or you’re simply a Physician curious about what the next few years in your career will look like, there are a few things to consider before investing the time, money and energy to bring your DPC or concierge medical practice to market.
While the conversion to a subscription-based practice may seem timely for you, a common question we receive each and every week at both of our industry sister publications is ‘How can a Physician attain capital for starting a such a practice?’
The answer lies in your planning, preparation and relationships with the appropriate types of people that can help you.
“In today’s economy, many have drained their savings accounts, and maxed out their personal credit lines,” say one concierge healthcare consultant. “Because of this they [doctors] need to reach out to others to get this money. The solution lies in coming up with a well thought out and professional, private-pay business plan for your practice that can be submitted to healthcare consultants, your attorney and a trusted accountant. Unfortunately, many people [doctors] have never learned how to write a proper business plan and immediately look to the Internet to search for a concierge medical practice business plan sample or template they can purchase. In my opinion, this is the wrong solution.”
TIP #1: Don’t Buy a Business Plan Template
Easy isn’t always better. Life teaches all of us this hard lesson.
If you want average, do what everybody else does.
Bear in mind however, your Patients can sniff out average a mile away.
So when considering the idea of simply purchasing a business plan template from the Internet, realize two things.
First, it won’t be unique. People who sell boilerplate business plans, even ones that are written by Physicians, FOR Physicians, often force their idea or concept into the boilerplate plan rather than creating a plan that highlights your unique idea.
Second, it’s a singular perspective. One of the hardest things to realize, often after the fact … is that these templates, even if written about a subscription based healthcare delivery model(s) are written about the experience(s) of one Physician. Similar to books, books and these templates are reflective of how one Physician did the work and presumes it will now work well in other geographic areas, other local economies and in other states and communities where the people and economies are completely different.
We have put together several resources here that can help you on your path to learning how to properly write a good business plan that’s truly unique to your personality, community and practice dynamics. Click here to view a list of industry resources.
Here are a few questions your business plan should answer:
- What local alliances or relationships can you leverage with other businesses to help yours?
- In terms of fees, what can the local market/demographic support?
- How will the skills of your staff, their knowledge of the industry and track record of implementation support this shift?
- What existing problem or problems exist that your practice is trying to solve simultaneous to the shift in practice and business model?
- What solutions does your practice have in place to resolve the problem(s)?
- How much will it cost to solve these problems now?
- How will solving these problem(s) make your practice financials look in one, three and five years, when considered in the context of your shift toward a private-pay practice model?
- How much cash do you need to find a path to profitability?
TIP #2: Interview Several Healthcare Consultants.
The more the merrier we say.
Now, we are no stranger to the fact that some Physicians find the idea of non-clinicians helping Physicians with their practice is absurd. We get it. Why would you want a non-clinician telling you how to treat a Patient?
Again, we understand this tension. But consultants who help Physicians move into Concierge Medicine typically want the same things that you do. They want to help you enjoy the practice of medicine again and desire to bring the Patient-Physician relationship closer together.
There are certain areas these healthcare consultants and industry experts focus on to help physicians change their business model from an insurance and managed care practice to a direct-pay, cash-only or concierge or membership based business model. They can help Physicians identify obstacles, hurdles, opportunities you haven’t considered and blind spots you might not see.
For example, when assessing your practice for potential economic viability and success in the subscription-based healthcare delivery marketplace, your current patient-base makeup, local demographics, patient surveys and your bedside manner all factor into the review process. Most available or ‘canned’ business plan templates don’t cover these types of intangibles which are critical to your success.
Recently, CMT attended a seminar in Florida that was designed to help physicians learn more about these subscription-based medical business models. When the speakers explained to the attendees that this type of practice business model is highly relational, one physician raised his hand unapologetically and said, “So you’re telling me I have to be nice to my patients?”
Shockingly, there was nothing funny about it.
So, interview as many people as you can. Get their unique perspectives. Have your 3-5 questions ready to ask each of them. Then, if you still want singular perspectives from your peers, approach them with the same questions. We think going through these educational exercise will provide you with the opportunity to see and learn things that you never considered.
TIP #3: Set Realistic Expectations for Your Time.
When you sit down to start writing your plan, remember that this is a business model based on service and fulfillment. Meaning, the relationship between the Physician and the Patient is the product/service you are selling. If you are clear with your patients about what it is that you are going to do, deliver and provide for them in the form of it will be much easier to introduce the program to your patients … at the right time, with the right message.
A long-time reader of CMT told us that the reason she was leaving her concierge physician was because for nine months she was seen by her doctor only one time. Otherwise, every other visit she was treated by the nurse practitioner.
Those peers of yours that may use the excuse that they cannot write a business plan are the same people who have never thought out all of the unique aspects of starting one of these business models. Patients have choices today. Lots of them. If you want to settle for average, that’s okay.
But most of the Physicians we talk to each week are frustrated by average.
I love what author Jon Acuff wrote in one of his books recently. He writes ‘Be weird until the rest of the world catches up.’
TIP #4: Choose Your Model. Then Define It and Make It Unique to You, Your Community and Your Patients.
This becomes another stumbling block many Doctors will run into if they choose to forgo the advice of a consultant or company that helps Physicians move into this model.
Doctors call both of our publications weekly and want to learn more about the various nuances of this industry. They quickly learn that there are several attractive ideas centered around the Patient-Physician relationship that should be implemented and could be quite suitable to a specific demographic and geography. But they don’t know how to start in most cases.
Most business plans say you must consider your local area economics and current customer/demographic makeup. Those are great places to start. Is an idea like this going to be suitable for the market you are in?
Fear is usually what creeps in at this point. Don’t let fear hold you back from pursuing your vision of how healthcare could be and should be delivered in your local community.
Your business plan should be reflective of you, your vision for the health of your patients and how you want the future financial viability of your practice to grow.
TIP #5: Will You Take Cash, Insurance or Accept Medicare? What plans, if any, will you participate in?
Several years ago, CMT and our sister publication, The DPC Journal wrote a story in collaboration that’s been published many times over and has become one of the most copied and popular reads online about the difference between direct primary care and concierge medicine. It reads …
Direct primary care (DPC or sometimes called direct care) is a term often linked to its companion in health care, ‘concierge medicine.’ Although the two terms are similar and belong to the same family, concierge medicine is a term that fully embraces or ‘includes’ many different health care delivery models, direct primary care being one of them.
Direct care practices, similar in philosophy to their concierge medicine lineage, bypass insurance and go for a more ‘direct’ financial relationship with patients and also provide comprehensive care and preventive services for an affordable fee. However, direct care is only one branch in the family tree of concierge medicine.
Direct care, like concierge health care practices, removes many of the financial barriers to ‘accessing’ care whenever care is needed. There are no insurance co-pays, deductibles or co-insurance fees. Direct care practices also do not typically accept insurance payments, thus avoiding the overhead and complexity of maintaining relationships with insurers, which can consume as much as 40 cents of each medical dollar spent, according to CMT analysts.
Direct care is a ‘mass-market variant of concierge medicine, distinguished by its low prices.’ Simply stated, the biggest difference between ‘direct primary care’ and retainer based practices is that direct care takes a low, flat rate fee whereas concierge medicine models (although plans may vary by practice) typically charge an annual retainer fee and promise more ‘access’ to the doctor.
Both health care delivery business models are providing affordable, cost-effective health care to thousands of patients across the U.S.
“This primary care business model [direct primary care] gives these type of providers the time to deliver more personalized care to their patients and pursue a comprehensive medical home approach,” said Norm Wu, CEO of Qliance Medical Management based in Seattle, Washington. “One in which the provider’s incentives are fully aligned with the patient’s incentives.”
In summary, it’s wise to move into any subscription-based healthcare delivery environment armed with information so you can avoid potential pitfalls and hurdles that others may be able to help you crossover.
While many/most Physicians in concierge medicine have used consultants to transition into a concierge medicine practice model(s), we understand that many Physicians have opted for a DIY-route into Direct Primary Care (DPC) and have chosen to either do it themselves or used a consultant and attorney at some point to provide some form of clarity or direction for their practice. Which ever path you choose, be informed.
One last additional thought: once you have written your own subscription-based healthcare delivery business plan, do what many smart physicians have done before you, have it reviewed and read by a trusted attorney, accountant, spouse (if applicable), peer you trust in business and relative. They’ll all help you see unique offerings and probably a few blind spots. After they have read it, have them give you a verbal explanation as to how they think your new practice model will work, based on your plan. They’ll have questions for you and that’s a good thing. If they don’t, you might want to ask them why they don’t. If they do not understand the plan or cannot explain the practice model concept from what you have written, there is a very good chance that a future patient in the coming months ahead will not understand the idea either.
Time for a rewrite. And maybe, time for some help. We have put together several resources here that can help you on your path to learning how to properly write a good business plan that’s truly unique to your personality, community and practice dynamics. Click here to view a list of industry resources.
This article originally appeared in Concierge Medicine Today or The Direct Primary Care Journal, leading independent publications in their respective fields. Posts by the author and these publications do not represent an endorsement of FON or its services.
Originally Written MARCH 24, 2015; Updated April 19, 2022
Categories: DPC News