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Bring Home Leaner Bacon With a Micropractice


It’s tough to make it on your own these days.

It’s tough to make it on your own these days. The siren call of a stress-reduced employed position or the security of a larger group practice can be hard to ignore. Indeed, the number of solo and two-physician practices is slowly shrinking, according to new data from the HSC Community Tracking Study Physician Survey.

But there is in fact an alternate, less-discussed trend out there: the micropractice. Instead of looking to get “big” through joining a behemoth group, physicians in micropractices focus on getting small. Typically, they are one-physician practices, operating with no or very few staff.

How can this possibly work? Answers vary, but typically, micropractice physicians will:

  • Keep billing simple. They may choose to either outsource billing, use technology to do it themselves, or even ditch dealing with payers at all (having the patients submit their own bills for reimbursement).

  • Communicate directly with patients. This means answering their own phones and even greeting patients personally.

  • See fewer patients per day than a traditional, volume-based practice -- say, maybe 10 to 12 a day.

Such cost-cutting measures keep overhead very low. And yes, seeing fewer patients does in fact qualify as a cost-cutter, as micropractice docs don’t need the patient volume other practices do to make ends meet.

Think about it this way: If the typical volume-based practice has 60 percent overhead (that’s as a percentage of net medical revenue), micropractices keep overhead around 10 percent. Logically speaking, if you keep more of what you earn, you don’t need to earn as much to support high overhead. For example, say you generate $1 million a year in net collections, but $600,000 goes to rent, staff, and the like; you take home $400,000. But, if you generate $600,000 in net collections and keep 90 percent of it, you walk away with $540,000. Not only do you net more money, but you’ve done it with fewer patients a day and few, if any, staff hassles. What’s the price tag on your happiness and job satisfaction?

Still, a micropractice is not a model that works for everyone. Physicians attracted to it tend to like to work alone. They don’t mind delving into the nitty-gritty business operations of a practice -- even mowing their own lawn or emptying their own trash baskets. They like long chit-chats with patients. They clip coupons and they relish finding new ways to keep costs low. It’s the simple life, doctor-style. If you can’t imagine heading into a small office to work alone every day, forget it.

But if the idea appeals, work out a rough plan of what you’d have to do to make it work; certainly, don’t wing it. Be sure to:

  • Account for all expenses. Where can you rent space? How will you handle billing and collections? What will happen to your malpractice rates? What technology do you want to use to support yourself in the absence of staff? Would you be more comfortable with at least one staffer?

  • Estimate average revenue per visit. The way you set up your fee schedule will depend heavily on how you’ve decided to handle insurance.

  • Determine how many visits you need to reach your goal salary. Like any new business, it may take you a little while to get there. Make sure you’ve got back-up funds on hand as a safety net during your start-up phase.

  • Promote yourself. Market your new practice -- with written collateral, a good Web site, or a blog, to name a few methods -- as a patient-centered physician who really cares about giving that extra personal touch. And then, of course, deliver on this promise. Your best advertising will come from happy patients.

Here are a few links to help you get started on your research:

The worst thing you can do is straddle the middle of the “get big” and “go lean” trends. If you don’t want to join a large group but can’t bring yourself to get really mini either, you risk falling into the horrible middle space, with just enough costs to keep overhead high, but not enough staff and technology investments to make you really productive. High costs plus low revenue equals not a pretty place to be.

Pamela Moore is a senior editor with Physicians Practice. She can be reached at pmoore@physicianspractice.com.

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