This week I hired another doctor to join my practice. Lets just take a step back for a second to think about where I was at to where I’m at now. I went full-time in my solo practice November 2018. To reach a point where I am now, employing two other doctors has been mind-blowing for me. The numbers definitely support the decision to hire another doctor since growth has shown no sign of slowing down. In fact, month over month growth has actually been picking up *knocks on wood.*
In this post I would like to talk about the benefits that I maybe didn’t realize would happen once we reached three doctor employees (I technically am an employee of the business).
The Benefits Of Breaking Out Of Solo Practice
When it was only myself in the clinic plus the medical assistants, I had to do everything. I also didn’t realize that even when it was just me and one other doctors that some insurance companies still consider you a “solo” practice. My job roles when I started up the practice were:
- Practice Manager
- IT support for my clinic (I set up a server on a raspberry pi, did our website, etc.)
- Triage for urgent calls into the clinic
- Owner of the business (making sure taxes are paid, payroll paid on time, all forms filed correctly)
- After hours call support for my patients
Doing so many jobs for my patients was extremely stressful as we grew.
Now, I could have stayed the same size and not focused on growth. This would have made managing the practice much easier. Once everything was set up, I could have just left it on autopilot for years while hardly touching anything behind the scenes. Most of my stress for the practice has been me focused on two things.
- Deliver exceptional patient care
- Grow and grow very quickly while minimizing risk
Now that I have 2 other doctors working for me, I can afford to hire more help to split a nurses salary to do easy refills, or triage urgent sick calls. This way between patients in the office, I no longer will have step out to call patients back, do the triage, then go see the next patient. For each time I get interrupted, that is more time after work I’m documenting.
I can offload tasks onto other people now that we are perfecting the process. That makes my life so much better.
My insurer now classifies me as a small medical group once I hit 3 doctors under one insurance plan. This means that the whole way the insurance contract is written has been changed. Gone is my name listed first as solo practice and my employees name also written the same way.
We are now listed as a small group which gives us about a 5-10% discount on our rates per person since we are buying 3 policies with the same malpractice company. This was honestly an unexpected benefit but a welcome one.
Credit Card Rewards
Owning the clinic and having the business credit card has had one overlooked benefit for me. I use Capital One who initially gave me 1.5% cash back but I changed to the $95 yearly fee to increase that to 2% back. I would have to spent over $20,000 a year for the fee to essentially pay for itself. This should not be a problem since we spent that on vaccines alone last year.
Everything that we put on the card and paid off each month gave me 2% cash back. Last year I got a check for cash back for over $1,500. $500 of that was a benefit of spending $5,000 in the first 3 months as a promotion. However, it is still money back that I get to use for the business as I see it.
Payment Processor Discount
After I got word that our malpractice company would give us a discount since we have 3 physicians, I decided to contact some of our other vendors to see if we would get a discount.
Our processor that we used to submit bills to insurance companies cost me $350 a month per physician. I told the processing company that I would sign a multi year-long contract for all 3 doctors if we could work out a deal. Since there are literally hundreds of companies that we can use, I started to get bids for different groups.
Our current processor was willing to sign us all on for $100 a month discount per doctor to stay with them for 2 more years at this same rate. Over 2 years, that is a savings of $7,200. Not bad.
More Clout With Insurance Companies?
Short answer: Maybe.
Insurance companies do not care that you have 3 doctors in your group. They have groups with thousands of doctors. You are still a rounding error on their books.
However, what our group has noticed is that we have more clout with the community and less fear against the insurance companies. Some insurance companies are not willing to negotiate with us on fee schedule even with 3 doctors serving their patients. When we looked at our demographics, we realized that one payer was about 8% of our practice volume and was paying us 20% lower than other payers.
Once our contract is up in 6 months, we will be dropping them since they are not willing to negotiate or pay us what we think is a fair rate. We attempted to write them a letter but in less than 30 days we heard back…NO, we are not willing to increase your rate. Okay then, we gave them notice that we were terminating our relationship. They emailed back stating that they didn’t accept that termination. Written termination has to be given within 3 months of contract renewal and it was too early. Yeah…it is as crazy as it sounds.
We have plenty of other insurance companies patients and I suspect that we will fill those spaces with patients who has an insurance company who is willing to value what we do as physicians.
Economy Of Scale
Everything is suddenly getting much cheaper spread out over 3 doctors.
I have to have a business phone bill each month. The bill is the same with me or 3 doctors on board. We now each contribute to the overhead, which makes this cost less expensive for me.
The same benefit can be said for other fixed costs:
- Certain employee costs are shared (phlebotomist, receptionist, biller)
- Rent + electricity
- Electronic Fax machine subscription
- General equipment for the office. EKG machine, wheel chairs on site, refrigerator, chairs…you get the idea
- Website hosting and maintenance
- Liability insurance
Instead of me having to pay the entire $200 a month phone bill, it is now split by overhead 3 ways. With all the fixed costs that go into a clinic, this is a very nice benefit to have.
Depending on how quickly we grow, I suspect that by the end of 2020 I will have to hire yet another physician to join me. This is assuming that we continue to grow at the current rate going forward and the growth of our growth rate levels off. I will have to look back through our numbers but I think it took me 8 months to see the first 1,000 patients for our practice. In the past 2.5 months, we have seen 1,000 new patients with myself and my one physician employee.
Growing is stressful. Actually, it has been very stressful.
The biggest stress that I have is lack of space. I become owner of the new building condo that I am buying later this month. Once that happens, this should solve our space problem when we move in. We will soon have almost 5 times the space we have now to practice medicine.
As I talked about in my previous post, there are still 2 other business ventures that I have started but it is still too early to talk specifics. Hopefully once I’m in the new space, I will have more time to devote to those add-on businesses that will help grow my practice.
Thanks for reading. Please let me know if you have any comments or suggestions.