Solo practitioners are rare, but success possible
Marcus Welby has gone the way of the Dodo
Everyone remembers the practice of the past: a Marcus Welby-type doctor who worked alone, made house calls, and was as much a part of your family as your favorite aunt. But solo practitioners are becoming rarer, particularly in urban areas. According to the Professional Association of Health Care Office Managers in Pensacola, FL, whose members are mostly smaller practices, average office size is increasing. In March 1995, there were 119,108 solo practices. A year later, that number was down almost 6% to 111,996. Although the 1997 numbers are not yet available, the organization fully expects that number to decline further.
But there is a place for solo practitioners, says Tom Grogan, MD, a pediatric orthopedist who has been in solo practice in Santa Monica, CA, for 11 years. "If you build a niche for yourself, then you can do well," he says.
Kelly Frost, MA, practice manager for her husband’s practice, Alamogordo (NM) Ear, Nose, and Throat/Facial Plastic Surgery, agrees that finding a place for yourself is vital. Their practice has thrived due to the scarcity of practitioners in a rural area. "We are the only ENT practice for 80 miles," she says. The practice serves some 50,000 patients, including those in the Mescalero Indian reservation, some personnel from Holloman Air Force Base, and the 35,000 residents of the town.
The practice has also added other services, such as on-site facial plastic surgery, allergy testing, and audiology services. Those additional services give some non-seasonal work to the practice and provide additional revenue streams.
Grogan, too, has learned that specialization leads to success. He has opted to do complex surgeries that other practices are unwilling to do and which he does particularly well. In his case, the specialty procedure is surgery on club feet. About three years ago, Grogan was floundering under the burden of several heavily discounted managed care contracts. Because he was losing money and facing financial ruin, he and his practice manager opted to eliminate those contracts. But within two months, some were still calling him to do the club foot procedure.
"I started saying Yes, I’ll do it,’ but for a set price that covered the entire episode of care, from the initial consultation and surgery to postoperative follow-ups for a year following the procedure. And then I’d do it only if they had a check delivered to my office by the next day," he recalls. The payers agreed to his terms, and currently Grogan handles the procedure for such giants as Kaiser Permanente of Southern California.
Consider the patient first
For both Grogan and Frost, a key to success has been to structure the practice around the needs of the patients. For the ENT practice, that means being available additional hours when children are in school. "The practice is very seasonal, and in the summer when people are on vacation, we don’t see as many people," she says.
Grogan, who faces more competition than Frost, also caters to the needs of his patients. He works every Saturday and sees more patients during the late afternoon and early evening hours after school is out. "I take my vacations when other families are away," he says. "I structure my life around my patients, and I understand that I have to do everything I can to engender a loyal patient base."
Grogan is convinced that his best referrals come from those loyal patients. "If a child falls on a playground and breaks his or her arm," he says, "then four mothers running up and telling the parent to take the child to Grogan is like having four apostles running around."
Referral patients come in with high expectations, and when those are met by Grogan and his staff, then he has yet another person who will tell friends about the practice.
Grogan also makes sure that he works with patients on billing issues. He has discontinued many of the managed care contracts he held in the late 1980s and will no longer accept Medical (the California equivalent of Medicaid) assignment. "They won’t pay for casting, and I am unwilling to lose 20 cents on the dollar for that procedure," he says. But he will allow patients to pay over time, and he now accepts credit card payment something he didn’t do five years ago.
Frost says that because her practice is the only ENT practice in the area, contracting has not been a big issue. "Part of why we chose this town was because there was no competition," she says. The lack of competition has allowed Frost to contract at rates that are probably more favorable than those earned by ENT practices in Santa Fe or Albuquerque, she says. "We know we aren’t out of the woods, but so far, the strategy has worked for us."
"I can’t even try to compete with other practices on price," says Grogan. "The only thing I have to offer is value." Value has four components, he says, each of which should be presentable to payers. These values include:
• Patient satisfaction.
"I don’t do patient satisfaction surveys, but I save all the thank-you notes from patients and always pull out a file of them when I am asked about satisfaction," says Grogan.
• Positive outcomes.
Grogan keeps records on his outcomes. He knows, for example, that his re-operation rate with club feet is 3% a low rate and he lets payers and potential payers see this data during negotiations.
• Quality.
Part of proving quality, says Grogan, is proving that you solve patient problems. He keeps track of the few complaints he gets and how they were addressed.
• Low resource consumption.
Grogan is able to tell payers how long a patient will be in the hospital after a club foot surgery. He also offers the procedure with a price that includes all hospitalization, postoperative care, re-operations, and readmissions for a year. "I give them a guarantee, and that is a high value approach."
Intangible benefits can outweigh money
Although specialization has saved Grogan and his practice, he earns about 50% less than he did in 1990, according to his calculations, but is working harder. For solo practitioners, Gregory says, being successful is less about what kind of car you drive and more about intangible things. For Grogan, it is going away on vacation and coming back to several patients who opted to wait for his return rather than go to another provider.
Frost and her husband feel they are successful because they have brought state-of-the-art care to an area that didn’t have it before. "We have endoscopic sinus surgery here and in-office cosmetic procedures. We can do laser skin resurfacing. We do allergy testing and treatment, and offer audiology testing and hearing aids," she says. "We know we are bringing something positive to the community."
Being busy is also a measure of success, as is a reasonable income, says Frost. But other issues are just as important.
Grogan agrees. "When I started in practice, there were 56 orthopedic surgeons at St. John’s Hospital next door to me," he recalls. "Now there are 15. I may not be the richest orthopedist in the state, but I have survived a holocaust."
The road to success is a rough one, says Frost, and those contemplating solo practice have to consider the long hours they will have to put in at first. For example, when she and her husband set up practice, they had to learn all about coding. "Neither of us had experience with that before because it was all done by a billing office." Frost had to take courses and worked every day for the first year before she felt up to speed.
Remember: Two main assets
Grogan says solo practitioners have to remember that they have two main assets. The first asset, he says, is your patient base. Keeping patients happy is the best method of ensuring strong referrals. The second asset is your office staff. Even if you are in control of the office finances, you have to keep your staff informed. "If the news is bad, they may not be able to do anything about it, but you have to let them know."
And Grogan has one more piece of advice: Avoid hospital emergency calls as much as possible. "Those patients are either going to be steered toward another practitioner by their insurance company," he says, "or they are going to be Medicaid or indigent patients, and you will have trouble collecting."
Solo practitioners should also maintain a constant awareness of the business side of the practice, says Grogan. "I open my own mail," he says. "I want to know how much money is coming in, what bills are being paid, and how much my accountant and lawyer are charging and for what." There is an added bonus. Often patients will write notes and include them with payments, giving valuable insight into the successes and inefficiencies of the office.
Frost agrees that knowing what is going on in the practice is vital to its success. "We have been practicing for about four years," she says. "We have learned how to delegate where possible, but I can’t imagine letting someone else take over the business for me."
• Kelly Frost, MA, practice manager, Alamogordo (NM) Ear, Nose & Throat-Facial Plastic Surgery. Telephone: (505) 437-4533.
• Tom Grogan, MD, solo orthopedist, Santa Monica, CA. Telephone: (310) 828-5441.
• Professional Association of Health Care Office Managers, Pensacola, FL. Telephone: (904) 474-9460.
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