10 Business Lessons When Starting A Medical Practice
January is often a time of self-reflection for me. As I look back, I think about all the worries I had when starting my medical practice. I think of all the lessons I learned along the way. So much time was wasted on worrying over things that were all in my mind. Have you ever looked back and thought something similar?
In today’s post I will be writing about business lessons I’ve had this far while owning my practice. You’ll see that many of my lessons were walls or barriers that I put up in my own mind. I was getting in my own way from success.
Sometimes you just have to work hard to prefect the process, create, and move forward. Alright, here we go. The top 10 lesions I learned in the past 3 years since starting my medical practice.
1. Just Do It
I spent a lot of time worrying about perfecting absolutely everything with my business name on it before starting my medical practice. This caused a lot of delays in my business journey.
Was my website professional appearing enough?
Did my logo look professional or good enough?
Do I need a consulting agency since it can’t be this easy to just open?
I recall spending weeks or months re-calculating the financial estimates for starting my medical practice. I would keep changing the numbers, guessing how much money I might lose on this venture. In my twisted mind at the time, I was doing it to somehow calm my anxiety about opening a new business. I kept thinking, maybe I’m missing something? Maybe I’ll see half as many patients as I thought and really go into debt? Maybe it will take me 6 months to get paid by anyone?
I kept adjusting my excel file spreadsheet inputs to print out various calculations. All this did was waste time beyond the initial “this definitely looks possible” stage of business planning.
Do some rough financial estimates. Take steps to open your practice. Put things together, work hard, and move on to the next step to open. I opened without a logo or my clinic name on my door or building. Funny thing is no one even cared but me.
2. Penny Wise Pound Foolish
When I was starting my medical practice, I chose an EMR called Practice Fusion. Since this EMR does not do billing, I decided to use Kareo since it was the least expensive.
Kareo is a fine system, but it is cheap for a reason. Customer support is less than ideal. There are often times where claims just stop appearing in our system and we have to call the clearing house and Kareo to get them to correct the error.
I should have gone with a slightly more expensive system and saved myself the headache. The cost difference was $40 a month to start out between Kareo and the one I am switching to which has way more benefits. My biller has spent dozens of hours trouble shooting problems which has cost me way more than $40 a month.
Don’t always choose the lowest cost or lowest bidder. It might end up costing you more than you think.
3. Lack Of Clear Boundaries
In the beginning I was so hungry for business that I often let patients walk all over me.
I opened and thought stupid things like, “well I only have 5 people on my schedule today, so I’ll spend an hour and a half with them to get the word out how much I care for my patients.”
I would pick up the phone and directly talk to patients right when they called in during the first weeks after I opened.
This spoiled my first group of patients acting like a concierge physician. This behavior went on for far too long. This lack of boundaries turned into these early patients asking a simple question on the portal to get out of a visit. Then it exploded into a patient sending me an 11-page Microsoft word document about all their concerns health wise and did not want to pay for a visit.
In my fear of my business not taking off, I let some early patients walk all over me by taking advantage of my time. Give good patient service but don’t let patient walk all over you like I did.
4. Control Issues And Lack Of Delegation
In my effort to be as lean as possible starting the business, I created everything. There was a desire for me to control everything.
- I set up and created our website
- I created our network in the clinic and I was our IT support system
- It was me who answered all emails and dealt with unsatisfied patients
- Me again who set up or changed the phone tree when patients call in
- I ordered all supplies and inventory
- I got involved with all staffing issues
- You get the idea
Once we started to grow, I was working myself in the ground. One Saturday before my kids woke up, I was doing my monthly inventory in our clinic. It was at 5am and I was in the clinic counting how many pneumonia vaccines we have. That was my breaking point to realize, what the hell am I doing waking up at 4am so I can be at the office by 5am to do inventory before my family wakes up.
Stay as lean as you can early on, but once that starts eating into you seeing patients or personal time, it’s beyond time to delegate. I waited far too long.
Good leaders know how to empower their employees and delegate. You’re used to doing it all as a physician, but you have to delegate.
5. Avoid Inferior Complexes
Just because other clinics or groups may have more money than you, that does not mean that they are better than you.
I remember being worried about opening next to the second largest clinic in town for primary care. I’m literally walking distance from their clinic. Not only were they my competitor, but there were also about 5 other clinics within a few miles that were my competition.
I would go through things in my mind, telling myself that they were much more professional than my clinic, more put together, or they were better in every way from my clinic.
Little by little those thoughts started to erode away over time.
First, I realized that the software they were using was one that I turned down for being too clunky and not user friendly. They didn’t have some amazing EMR or software that I couldn’t have. They had one that I thought was worse than mine!
Second, I started to see many employees who work for those other clinics who then started to also send more and more patients my way. They would tell me how well my clinic was run. They would tell me how great of a job we are doing.
Third, our growth really helped quell my worries. Going from 0 patients to now between 10-15 thousand patients in our panel in 3 years gives confidence that we are doing something right.
Don’t feel inferior to other practices. Just focusing on doing the best you can with what you have.
6. Networking Is Important
There are two types of networking.
- Networking where it is obvious that it is solely for receiving
- Networking with a true giving and receiving mentality
It is painfully obvious when someone is networking only looking for a receiving relationship. You probably have been exposed to this type of person. This type of person only contacts you when they want something. They only reach out to you asking for something. Their looking at this networking as “what can you do for me.”
The giving and receiving networking looks at the relationship as a mutual one. It can even be friendly. This type of person will occasionally reach out to talk about what they can do for you (without a backhand receiving goal) or just to be friendly.
Here are some examples.
I have a few specialists that we sometimes play video games with, sometimes we share our favorite beer or food joints we recently went to. Sometimes they share some tips with me like how they changed their phone tree to better improve patient flow when calling into their office.
Nothing is being discussed in a backhand way looking for something for them. Them telling me how a phone system change helped them and how it might help me does nothing to help them.
An example of a backhanded networking:
“Let me rent office space from you, I’ll pay you for one day a week for the space you are not using and if you wanted to send all of your referrals to me, I’ll make it easy for them to see me and take great care of them.”
Offering to rent space from me and then more or less telling me that you would like me to send all my patients to you makes the relationship murky. There is pressure to send to that person renting from me and not someone else. Not to mention that legally this might put both of us in a grey zone.
Networking is important. It can get you far if done correctly. You need to learn how to a give and receive attitude about networking and you need to network.
7. Surround Yourself With Hard Workers
When your practice is small, every person counts. One-person slacking off out of 3 employees means that you are only operating at 66% efficiency.
Have clear expectations. Have a way to onboard your employees and have clear goals for your employees.
Patients stay for the process; they will only stay so long for a great doctor.
Have a good process on how patient flow occurs and patients will stick around forever. Have a bad process, patients may put up with it for a while for a great doctor but ultimately will bail on you if another place provides almost as good care.
The people working for you need to work efficiently and put in a good effort for your company. Otherwise, they need to find another place to work.
Don’t tolerate laziness.
8. Learn From Other People Or Industries Best Practices
I feel blessed that I am the only one in my family in medicine. I was able to learn about running various businesses through my family and what that entails. There are so many parallels. The one truth that I’ve found so far is that the following 3 things create successful businesses.
Provide exceptional customer service
Meet or exceed expectations of your clients
When I go somewhere I’m now always thinking about the process of how I was served. I booked a table at a restaurant recently. Booking was easy and quick to do online. I didn’t have to call anyone to make that reservation. An email arrived telling me about their cancelation policy. Once that visit was over, I had a follow up email asking how my visit was. How could they do better?
Constantly learn from those around you.
My grandfather before his passing started and ran a HVAC and plumbing business. They would have to take call 24/7 and manage 70 employees. Managing emergencies for a busted pipe and chasing down payment is not too different from staffing a medical clinic and trying to change down deductible insurance payments.
Learning from him that you have to help some people but still collect money to put food on the table. I also learned from him that going after small potatoes will work you into the ground. You need to go big. He made some money repairing someone’s hot water heater. He made a lot of money doing the new high schools entire HVAC and pumping. Go for the big potatoes once you have the process and manpower to handle it.
9. Phones Are The Enemy
The cost of providing healthcare has skyrocketed. From rents to employee wages, prices have skyrocketed in 2022 so far. Meanwhile, pay from insurance companies has not gone up.
To really focus on costs, we decided to automate everything and anything that we could. A part of this automation was trying to get people to text us or book appointments online rather than calling our office.
Calling takes a lot of time and manpower. When someone texts in, we can have one person answer on average about 20 times the volume of messages via text compared to one phone call.
Once we implemented a way for patients to easily text us, our number of phone calls went way down, and visits per doctor went way up. Simply your life, make it insanely easy for patients to book online or text you and convert those texting questions to video visits.
10. Be Cash Rich
When I started the company, my goal was to have at least 3 months of expenses in the account to cover expenses.
As we have grown, we see more and more financial obligations on the horizon. Not to mention, the financial uncertainty of the pandemic which also lead to us piling up cash in the business account.
At the end of 2021 we had about a 12-month runway in the business account on average. This means that if we did not take in another dollar, we could sustain for another year with our cash reserves.
This is true for now but will change soon since we plan on opening more locations soon, which is a cash intense cause.
We want to not be over leveraged. We strive to have the financial capability to grow when we find the right spot. If you want to be stressed out, try being over leveraged and on the edge of meeting your financial obligations. That is a ledge we have no desire to even come close to.
Now, a 12-month runway might be a bit excessive. However, since we are growing quickly, some of that cash we plan on deploying to open a new location.
So, there you have it. Some of the business lesions that I learned in the 3 years since I opened my own practice.
I really do enjoy getting my thoughts out there and enjoy all the positive feedback many of you have emailed me about. In a way this blog has been very self reflective and therapeutic to get out some of the frustrations of running a business.
I really have gotten into photography in the past 2-3 years and have upgraded my camera. As a result, I’ve also gotten much more into creating videos. I’ve decided to dip my toes into trying to also match up YouTube videos with weekly posts.
Here is the link for this YouTube video. Consider subscribing as I keep documenting my journey and building my video editing skills.
10 thoughts on “10 Business Lessons When Starting A Medical Practice”
Started my practice 2 months ago. Slow but building. This list is exactly me!! I will learn from it. So glad for your posts!
Congrats, feel free to reach out to me if you want to network or just chat!
I like your point no 9 (phones are the enemy) and curious to hear other phone/text automation ideas that you might have.
We currently use something called Spruce which is a texting platform that has a pop up on our website where patients can text in quickly. It is okay. My 2 biggest complaints are that they are not able to remove the phone number at the top of the popup. It is not our phone number. So people can call that number and it basically goes nowhere. The second complaint is that patients have to download the application and that patients can not have more than one account. If they have 2 different doctors offices that use the same spruce application, it is not possible to do that. They can only be linked to 1 doctor’s office at a time. To unlink them, you literally have to call in tech-support.
We use that for texting questions for people just browsing our website and then patient portal for other secure conversations.
Thanks for your insights about texting.
Do you have any complaint about their phone tree? If you could change it to suit your workflow better, what would that be?
I honestly have not played around a lot with their phones in Spruce too much. We thought about using them for only about a day but moved on to RingCentral for our phones since it is way more customizable and user friendly.
Hi there ! first of all this is a great website and thank you for posting your experiences and thoughts. when one starts new and is waiting to build a patient panel, how long on an average it takes to see at least 10 patients/day and what are the best marketing strategies with out breaking the bank ? I understand the value of google and face book ads, and word of mouth but at least need few patients initially .
Thanks for visiting. It took me about 5-6 months to go from nothing to over 10 patients every single day.
Google and Facebook are where I would spend the majority of your money. Set limits, set key words, create negative keywords, and set zip codes where you want to advertise. It is super easy and cheap to do. $500 to $1000 a month will get you tens of thousands of eyes on your ads.
Thank you for sharing your business experience! I really appreciate it. By the way, as for the equipment for the medical business, would you recommend buying it or renting it? On the one hand, it is much cheaper to rent. In addition, it helps to determine whether the equipment is worth the investment and whether you should buy it in the future. You can also give up equipment that is not in demand in a certain season and rent what is most needed. For example, flu season typically sees a big influx of patients experiencing respiratory issues, which increases the need for ventilators, respiratory equipment, and in some cases additional quantities of basic equipment to supply staff.
On the other hand, the rented equipment will never become your property, so you will always have to pay for it.
I’m really interested to know what you think.
Hi, I like the idea of buying my equipment. We briefly entertained the idea of renting very expensive equipment around 6 figures in cost to add cash pay services to our practice but realized that the risk was just not worth the reward. We buy everything in cash. If you can find a short-term rental for something to test the market I guess that is not a bad idea but many of the rentals that we looked at wanted a 2-5 year commitment.