I help doctors open private practices and resuscitate failed ones. Here are the 3 biggest mistakes I see them make.
- Lisa McDonald is the founder of Integrated Connections, a healthcare consultancy.
- She says a big challenge in starting one’s own private practice is unrealistic expectations.
- Here’s her advice for overcoming these issues, as told to writer Robin Madell.
- This article is part of Talent Insider, a series containing expert advice to help small business owners tackle a range of hiring challenges.
This as-told-to essay is based on a conversation with Lisa McDonald, the founder of Integrated Connections, a national medical-practice consultancy based in Fort Collins, Colorado. It has been edited for length and clarity.
Opening a practice can be stressful for doctors — especially since many medical schools tend to overlook the business side of medicine.
Since founding my consulting company in 2009, I’ve worked with hundreds of private-practice physicians and aspiring business owners. Here are three common challenges I see doctors face when going off on their own.
1. Unrealistic expectations
Many physicians come to me after opening a practice and discovering it wasn’t what they’d hoped for. They weren’t prepared and thought they could open a practice without sufficient capital or support staff, or they were fed up with corporate medicine and wanted to make a change immediately, but didn’t put the appropriate time and effort into properly vetting the resources, the systems, or the software required to run a medical practice efficiently and effectively.
One physician I worked with thought he could start a practice with just himself and his spouse working part-time for the practice. They worked on a shoestring budget and their spouse was trying to manage the marketing, billing, patient visits — everything. They didn’t reach their forecasted revenue because they weren’t able to build a patient list as quickly as they’d planned. He also wasn’t able to maintain a salary that would support his family and lifestyle, and the administrative burden negatively impacted his quality of life because he couldn’t hire any additional support. He eventually came to me seeking employment when he determined he had to close the practice.
2. Being afraid to spend a lot in the beginning
Physicians often view spending money as a hit to their bottom line rather than a necessary investment to fuel future growth of the business.
I’ve worked with physicians who hadn’t developed a proper business plan. They struggled with marketing and staff expenditures, or looked for the best price as opposed to the best value. It’s understandable given that many physicians are swimming in student-loan debt, but I’ve seen this mindset damage a business beyond repair.
Doing marketing work, using social media, creating programming, writing articles or a book, and hiring the right support staff are all things that physicians may not immediately consider to be revenue generators, but investing in the right professionals to help get these aspects running smoothly sooner will help grow your patient base faster.
3. Not hiring help or budgeting properly for staff
When they’re just starting out with opening a new medical practice, physicians often don’t understand the importance of hiring quality candidates — and how difficult it can be to find these candidates. This goes for both clinical and nonclinical staff.
For example, many physicians will try to open a practice with little to no administrative staff. They think they can do it all, but soon learn that trying to do everything involved in running a practice — on top of treating patients — is a fast way to get burned out. Managing staff is one of the biggest complaints I hear from business owners, but if you have effective processes in place to hire the right people, it’s a huge payoff in the long run.
Many also underestimate hiring costs. For example, clinic owners are often excited to grow their new practice and want to hire an advanced-practice provider such as a nurse practitioner or physician’s assistant to help see more patients — yet they aren’t aware of how much these professionals can earn elsewhere (often six figures).
Here are a few key strategies for dealing with these mistakes before opening a practice
- Define your objectives: Some physicians may be particularly focused on making as much money as possible, while others may value the autonomy and flexibility that can come with being self-employed. Physicians need to prioritize which factors are most important to them so that they can build and shape their practice around those priorities. The highest-paying practice opportunity may not be the one with the three-day work week located in your hometown or on your favorite beach or ski resort, for example.
- Do your research: There’s a plethora of information online regarding the challenges of owning and operating a medical practice in today’s environment. Physician professional associations, local physician meetings, and online healthcare-networking groups on LinkedIn and Facebook are also great places to find practice owners or vendors willing to share their knowledge and expertise. When setting a budget, think about all the costs involved in starting a business — things like office space, staff, IT, marketing, and administrative tools, among others.
- Hire based on character and loyalty: You can teach new skills, but you can’t teach personality, emotional intelligence, or purpose. You also want to hire for tenure, as significant turnover can be detrimental to a private practice. To gain insight into how candidates think, problem solve, and interact with patients and peers, I use open-ended and behavioral interview questions like: “How do you adapt to working at a new practice?” “What do you believe are the three most important aspects of a successful patient encounter?” “What do you think are the top challenges in healthcare now, and how do you overcome them?” and “Where do you see yourself in five years?” One client I work with likes to ask office-support candidates: “What would you do in the last 15 minutes of the day when all of your work is done?” Some candidates reply with answers like, “Just hang out,” while others answer with examples demonstrating initiative like, “Clean around my work area,” or, “Ask my colleagues if they need help.”