Starting a new medical practice is no small feat for physicians to do today. private practice, it is no small feat. According to studies conducted by the United States Small Business Administration, only about two-thirds of businesses survive for two years or more.
According to AMA’s Physician Practice Benchmark Surveys, in 2016, approximately 55.1% of physicians worked in privately-owned practices compared to 60.1% in 2012. The fast-forward to 2021 following the COVID-19 pandemic, and those numbers have been drastically impacted. The private model, in other words, is in severe danger.
There are a multitude of factors contributing to the decline, from fracturing under the heavy weight of mergers and acquisitions and a heavy-handed insurance industry to the mere stress of running the administrative side of a business.
Here are four challenges that independent physician practices are facing and what they can do to combat it.
Resource requirements are underestimated
Opening a private practice requires more than just cash flow and guts. It requires a detailed plan. Aside from securing the capital to open it, you must also have a clear and concise plan on how to jumpstart the business.
There is no simple checklist you can cross off overnight, but here are some of the logistics that must be decided first:
Where to locate your practice?
Who will your patients be?
How many clinicians will you have to start?
How will you pay for the business’ bills and taxes?
Will you take insurance?
Many private practices fail because owners do not start with the basics in mind. Being a great clinician does not mean you will have a great private practice! It is crucial to be ready and prepared to avoid being swept away by the turbulence of challenge.
Low patient satisfaction
Revenues, product quality and cost-effectiveness are very important in business, but are you offering a good service? There are several pitfalls that can lead to patient dissatisfaction, including:
Not returning phone calls or emails in a timely fashion
An uninviting office
A hard to navigate website or phone system
Not having a intuitive scheduling system
Quality and cost are the two most important factors to consumers. As you improve your quality, you must also improve your rates. Having consistent revenue ensures the practice can keep running smoothly, but client satisfaction is what will keep it going.
In the business world, there is competition in every field. The more common your private practice is, the lesser chance you have of surviving. If there are a lot of practices in your area offering similar services, you must set yourself apart. You do this by:
Increase your marketing budget
Sending personal emails to clients to build relationships
Boosting your social media presence
Focusing on traditional and local media to gain awareness
Lack of planning
Many clinicians who open a private practice do not properly plan their goals and outcomes. It is important to set key performance indicators (KPIs), which are bottom-line results of what you do well. For example a KPI could be:
Total gross income in a month
Total sessions in a month
Satisfaction on a survey
KPIs can easily get lost in day-to-day operations, but it is important to prioritize so the practice can track against these goals.
Some private practices fail to adapt quickly to changes in the market. For example, consumers are looking for information and to learn from companies. Therefore, you should write blog posts about current topics and what is happening in the media as well as educational content. This will increase engagement on social media and draw attention to the practice’s website. Being sluggish in adapting to change can cause patients to lose interest and switch to a competitor.
Despite these common pitfalls, there is still hope. We are optimistic about the economic potential of private practices because we see it firsthand every day. Physicians are becoming more business savvy, looking for ways to diversify their medical practice and create new revenue streams.
Keeping ‘private practitioners in private practice’ is our singular focus. We recognize that clinicians do their best work when they are given the opportunity to focus on the patients. Therefore, we support emerging physicians with the right tools and resources to care for patients while creating a profitable practice. For example, not only do we offer turnkey solutions to provide equipment, but we show practitioners how to read reports, as well as staff and bill appropriately.
Are you interested in setting up your private practice today? We are your trusted partner when it comes to kickstarting your private practice, and we’d love to chat to help you begin your journey today.