November will mark one year since I went full time in my primary care practice. It has been a hell of a journey. From all the initial headaches, to now things starting to smooth out. The biggest headache was that Aetna took 9 months to credential me. Not only did they take forever to get me in network, they lied to me and told me I was in network (They even had me listed as in network on their website before taking it down). They then took the posting down stating it was an error. Since then, they refuse to pay me the $30,000 in claims owed to me. Yes, I may still be a bit bitter about it…but for this post, lets look on the bright side and check in to see how things are going.
I hit the 100k of revenue per month mark this month. I have to be honest that I never even fathomed getting this far this fast (one year in). Especially considering that I have some patients who pay me close to nothing.
You might ask why I even took these patients on who pay me close to nothing. Well, they started out as insured patients that fell on hard times. I see them for close to free until they get their feet back on the ground. After all, I was once technically homeless so I feel for people who have fallen on hard times.
The journey has been quite intense with long hours and a lot of…and I mean A LOT of hard work.
Taking The Leap
Staring up my own business was frightening.
I stayed up many nights worried that no one would show up. I was so worried that no one would book appointments with me that I kept asking my wife for reassurance. It seems like every other physician was going the other direction. Closing up traditional primary care and changing to direct primary care, concierge medicine, or selling out to the hospital. I kept asking myself what am I missing and why am I going down this road. The Miranda Lambert Tin Man song lyrics kept running through my mind:
“I’ve been on the road that you’re on
It didn’t get me very far”
I kept thinking I must be nuts to go down this road that many have traveled and given up on. It also didn’t help that I was choosing to open in a very established neighborhood with some very large competitors.
Minimizing the Anxiety
To quell my anxiety I initially planned to have 2 co-founders. I leaned on my co-founders at the time. We set off on setting up a business plan that took 6 months to write. Most of the time spent on the business plan was us changing numbers to see how much money we could potentially lose each month. We had no idea how much money we could make but wanted to make sure that we would not lose everything we had on this plan.
In time, both of those partners ended up dropping out. Fortunate for me, they dropped out 2 months before I created the PLLC for my business and were fine releasing all plans with no restrictions. I never ended up having to buy them out and they resigned any ownership to me in order for them to go a different direction in life.
So, I teamed up with a surgeon and opened my first office. My start up costs were about $15,000.
My first week I had about 6 appointments… of which I think half of them were friends.
Now I see over 120 patients a week, every week. Some weeks close to 150 patients. My new physician employee continues to grow her numbers each week to get close to what I’m seeing.
The unknown was the most frightening part but I can’t believe how successful this continues to be.
Putting Out Fires
Every business will have fires that pop up that need to be extinguished. How quickly you put them out to avoid collateral damage separates okay companies from good or even great ones.
Off the top of my head, here as some of the fires I had to put out in the first few months of starting my practice:
- Having only one employee who would show up late or call in sick with no coverage. I quickly had to fire her.
- Underestimating phone calls. Phones going to voicemail frequently unanswered.
- Insurance telling me I was in network when that was not actually the case, then having lots of patients call upset with out of network bills
- Landlord emailing me 1 month before we were set to renew our lease for one year informing us that someone else had taken over our lease. The group then backed out and we were allowed to stay in our place.
- Unethical and unreliable employee number 2 needing to be fired
- Credentialing company who put my personal phone number on an application leading to a lot of phone calls to my personal phone
- Not submitting ICD-10 codes correctly for annual physical labs and patients all getting large bills for labs, then having to resubmit codes
- Realized that after I fired my credentialing and billing team, that they were still getting checks and not forwarding them to me
- Not realizing that my online booking system did not block times and came in on one Monday to 5 double bookings and one tipple booking for that same day.
- The office got even smaller when another doctor was brought on to share space. I was relegated to one exam room for about 70% of the clinic time.
- Drug seeking patients leaving 1 star reviews online when I turned them away
- Being relegated to one exam room for my clinic on most days
Each challenge presented an opportunity to grow. Getting past the challenges took a lot of effort and work beyond regular business hours. I spent many sleepless nights working behind the scenes to clean up any administrative messes that kept popping up. The hardest part was truly when I was solo. Doing everything myself without a group to back me up made it almost impossible to manage the clinic, have a personal life, and be an excellent physician.
Our relentless approach to excellent patient care has helped us continue to grow and have no patients complain about the small space or current set up.
Going Without A Practice Manager
No one loves your baby the way you do. This business, the clinic, and my interactions with my patients is something that no one else will treat with the same regard as me. I would say the most frequent question that I get is why don’t I have a business manager.
The answer is simple. They will never put in the dedication or hard work that I will put in to a new start up clinic. Working capital in early small businesses are what makes them thrive or die. Spending $60,000+ a year on a managers salary when that capital can be dedicated elsewhere is in my opinion not a great idea. Spend that money on advertising and supplies. Forego the manager for now.
If you are going solo or opening your own practice, do the managing yourself until you get big enough to NEED one.
Once the process was close to perfected, then it was time to grow. Initially I started expanding hours. I started part time in June 2018.
Then, by November 2018 I went full time as I worked through some of these difficulties.
Once my schedule maxed out, I opened up extra hours since I don’t have any more exam rooms. This also allowed me to bill 99050, an after hours code that pays me extra for each patient visit. It might not sound like a lot but ~$20 per patient per after hours visit, adds up to a lot of money per month when seeing on average 6 after hours patients per business day ($2,400/month/doctor).
Once this was maxed out I brought on another doctor to join me and start seeing more patients during times when we could have an open room for them. So far the payout has been small. I’m averaging about $3,000 in income from employing this doctor (after expenses).
The new doctor has boosted gross revenue to help me cross the $100k/month mark. We still are currently hitting the ~25% overhead mark.
Calculated growth will continue at a measured pace. I still maintain 100% ownership in the company with no plans to be bought out or change my business plan. I’m going to keep on trucking along and seeing more and more patients. I love what I do and I have no intention to stop.
The most rewarding part of the business has been the ability to start giving back. As I mentioned above, I have some patients who have fallen on hard times that I see for close to nothing. I also volunteer with the deaf and underfunded population to provide them with reasonable access to a primary care physician in the area. I have a video ASL interpreter that I use for these visits that costs me about $300 a year.
Although it is nice to see the clinic make a profit. It is much more exciting to start giving something back since I have been given so much by the surrounding community. It also is very exciting to give multiple people a stable job, good pay for the positions, and good benefits.
I’ll plan on reinvesting much of the profit into growth of the company. My lifestyle is pretty modest. My family spends about $4,500 a month (including our mortgage). This overall frugality makes it so that I don’t really need to take a large salary each month. I’d rather keep growing at a quick pace. For the past year we have grown by 53% per month based on number of patients in our panel (started with 25 patients first month and now have just under 4,000). This will for sure slow down as my panel has maxed out but I still expect upwards of 15% growth per month for the next year going forward.
Life is good and a lot of wonderful people helped me get here. Now that things are more on autopilot, I plan on starting to post here more frequently.