If you have been burnt out, overworked, and underpaid for the last few years or so - you are not alone. This has been a common denominator for doctors in traditional, insurance-based practice for the last decade.
As doctors who went through rigorous training to care for sick patients, it can be very frustrating to have your days occupied by everything else aside from doing precisely that.
Administrative work in traditional practice has soared within the last decade, and doctors are no longer having it.
Harvard Business School professor Clayton Christensen notes, “There are more than 9,000 billing codes for individual procedures and units of care. But there is not a single billing code for patient adherence or improvement, or for helping patients stay well.”
This is why many doctors have taken matters into their own hands and re-shift the paradigm back to what is important: the patient’s health and well-being. Hence, the growth of concierge medicine practices have taken the industry by storm.
While there is no doubt the professional, financial, and medical returns of private practice conversion are immense, making the concierge medicine or direct primary care (DPC) transition can seem rather daunting.
If you are a doctor who is running your own traditional practice and you are interested in converting your practice to a concierge medicine model, read on. This blog was created especially for you.
Transitioning to concierge medicine requires careful planning and execution. In this comprehensive guide, we will walk you through the process of transitioning your traditional clinic to a personalized medicine business model.
Reflect on why you are transitioning to concierge medicine. Is it to improve patient care, reduce administrative burdens, increase revenue, or all of the above?
When establishing your motivations and goals in private practice conversion, it will help to assess your current traditional practice using the good old SWOT analysis.
What strengths, weaknesses, opportunities, and threats does your traditional practice currently have?
We’ll tell you one major benefit that you have: you no longer have to start from scratch because you already have a full-fledged, running traditional practice.
Your already existing traditional practice will serve as the foundation of your concierge medicine practice or direct primary care (DPC) transition.
Lastly, it is important to set clear action items for your concierge practice, such as:
When it comes to transitioning to concierge medicine, there are several business models to choose from, each with its own unique characteristics and benefits.
You can refer to a wealth of online and offline resources by organizations and key opinion leaders like the American Academy of Family Physicians (AAFP).
While concierge medicine practices have a baseline of similarities, like a retainer fee in exchange for a set of reliable preventive services, you get free reign on the semantics.
As the president and CEO of your own concierge medicine practice, you get to define the terms and conditions of your private practice conversion.
Over time, you will have your own iteration of patient-centered care approach, just like any successful concierge medicine practice.
Transitioning to concierge medicine can convert your practice to one or a mix of the following models:
Membership-based model
Patients pay a retainer fee for access to exclusive services, such as same-day appointments and extended office hours.
Hybrid model
Although doctors transitioning to concierge medicine are moving away from traditional systems and third-party insurance payments, the reality is that insurance cannot be taken out of a patient’s healthcare equation.
What many concierge medicine practices do is to offer hybrid models, wherein patients avail of the concierge or DPC membership while also charging their insurance for covered services.
Hybrid models typically come in two kinds: direct billing or fee-for-service billing.
In direct billing, some concierge practices are able to bill insurance companies directly for any covered expenses a patient has incurred.
After a patient enrolls in a concierge medicine subscription, the direct pay practice requests for their insurance details so that they can manage insurance claims on their behalf.
On the other hand, fee-for-service billing is when a patient settles out-of-pocket medical expenses which are not covered by their concierge medicine subscription. They later on have these out-of-pocket expenses reimbursed from their insurance plan.
While transitioning to concierge medicine, it is important to build business projections your new direct pay practice can work towards.
Make sure to update your practice's business plan to reflect your concierge medicine model, including:
In the process of creating your business plan, it also helps to consult a healthcare attorney that specializes in direct care models. He/she will provide you with invaluable legal advice as to how you should transition to concierge medicine.
Once your business plan is all sorted out and you have set a budget to work with for the first few years, it is time to evaluate your financing options.
You must decide whether you are capable of self-financing or you will need to secure a business loan. Pro tip: SBA loans are a great financial resource!
SBA loans are provided by the Small Business Administration (SBA). The main goal of SBA loans is to provide financing to small businesses that might not qualify for traditional loans due to lack of collateral, credit history, or other factors. This makes it a highly viable option for doctors transitioning to concierge medicine.
Make sure to secure financial reserves enough to cover 2-3 years of operational expenses.
Here are some revenue projections you may want to consider when mapping out your concierge medicine business plan:
Year 1: 50 patients @ $2,000 per patient = $100,000
Year 2: 75 patients @ $2,200 per patient = $165,000
Year 3: 100 patients @ $2,500 per patient = $250,000
Year 5: 400 patients @ $2,500 per patient = $1,000,000
Read more about: Financial Planning for Concierge Medicine
Truth be told, transitioning to concierge medicine is a major endeavor. Concierge medicine practices in the U.S. typically spend an estimated $150,000 - $313,000 worth of expenses per year to stay up and running.
Nonetheless, there are proactive measures you can take to ensure your investments pay off. You will need to take the following steps:
Update your clinic operations.
For most practices transitioning to concierge medicine, this entails switching to vendors that specialize in concierge medicine or direct primary care (DPC) transitions.
This includes technology and software for DPC practices, like electronic health records (EHRs) and practice management software.
To save on labor expenses and optimize clinic operations, it is also crucial to restructure your staff line-up.
Concierge medicine practices typically require less staff than that of a traditional practice, given that administrative tasks are much less in direct pay practices.
Check which operational procedures can be done away with, accomplished at a lesser cost, or automated, especially when technology and software for DPC practices are already in place.
Do not forget to train your staff on the new concierge model, services, and pricing. Addressing any questions or concerns they have will help ease them into transitioning to concierge medicine.
Clearly inform patients about transitioning to concierge medicine.
Make sure to have an honest conversation with your patients regarding your private practice conversion.
Keep them in the loop about new billing procedures (monthly subscription model will replace traditional insurance-based billing), as well as any updates to patient care and appointment scheduling processes.
Enforcing marketing strategies for concierge medicine practices, like updating your website and online presence to reflect your new concierge model, is also key.
Doing so will keep your patient panel updated and engaged with your practice, plus it will help attract new patients to subscribe.
Read more about: How to Market a Concierge Medicine Practice
Track your key performance indicators (KPIs) religiously, such as patient satisfaction, revenue growth, and operational efficiency.
Overcoming challenges in concierge medicine is inevitable. Regularly assessing your concierge medicine practice's progress can help you determine whether any urgent adjustments should be made to your business plan.
Moreover, stay up-to-date with industry trends and best practices to ensure your concierge medicine practice remains competitive.
Transitioning to a concierge medicine practice requires careful planning, execution, and a commitment to delivering high-touch patient care.
By following the step-by-step guide outlined in this blog, you should be well on your way to creating a successful and sustainable concierge medicine practice.
Most practices transitioning to concierge medicine typically take a year or more to break even and start earning back what they invested. Remember to stay focused on your goals, be patient, and adapt to the changing needs of your patients and practice.
