How independent physicians are making it work

Dr. Mollie James was embarrassed when her functional medicine practice filed for bankruptcy in 2019. She felt like a complete failure.

“I thought it was the worst thing that could happen,” James said. “I’m the ‘A’ student, the valedictorian, all those things. I didn’t want anybody to know. ”

Fast-forward seven years, and James is the owner of a multimillion-dollar concierge practice with two locations in Iowa, a third in Missouri and a fourth slated to open in Texas later this year. She also offers virtual care services.

Owning an independent practice is a daunting prospect financially. Physicians invest their savings and retirement accounts into a practice or take out business loans, but they often lack the know-how to operate a successful business. Clinics typically take years to become profitable, which may not be aviable option for doctors saddled with student loan debt.

Joining a large system or physician group that handles back-office operations and offers a steady paycheck is the easier path. However, some physicians say there is still a place for independentmedicine, despite the challenges.

Here’s what four practices have done to make it work.

Start small

James’ second act, James Clinic, launched in 2021 to treat a range of conditions through integrative medicine, including cancer, neuropathy and hormonal imbalances. It serves about 1,500 to 2,000 patients each year.

James decided to avoid past missteps and start small after the bankruptcy.

Her former practice struggled with high overhead costs. This time around, her first office in Chariton, Iowa, rented for $400 per month. James also transitioned to a self-pay model.

Branding was another hurdle to overcome. James said she developed a marketing strategy that focuses on patient needs, rather than selling products.

James wants others to avoid her mistakes. Later this year, James is launching Maverick Medical Ventures, which will support physicians who want to leave a health system and build their own practice.

Find additional income

Dr. Steve Furr, co-owner of Family Medical Clinic in Jackson, Alabama, has practiced independently for decades. His practice, which includes two other physicians and three nurse practitioners, is a designated rural health clinic.

Several years ago, the clinic launched a chronic care management program. Staff members regularly check in on patients to see if they are staying on their medications, need referrals or have any changes to report since their last appointment. Furr said the program brings in additional income and helps the clinic stay connected with patients.

Running a practice requires tough decisions, he said. Owners must assess whether patient volumes will support investments in new equipment, technology or services. In general, an investment only makes sense if the practice can at least break even on it, he said.

“As things have gotten tighter and tighter over time, you just can’t have things in your practice that you lose money on,” Furr said. “You do like any other business. You try and look and see where you can cut costs, where you can lower your overhead to try and maximize your income.”

Connect with other physicians

Dr. Stacey Bartell, owner of iTest Health Family Medicine in Livonia, Michigan, needed a change after the COVID-19 pandemic. She left a local health system in 2022 to start her practice. A decade-long stint as a medical director at a former employer meant she understood the business side of medicine.

Bartell said one of her biggest challenges is getting paid — ensuring the right codes are submitted to insurers and following up on claims denials and prior authorizations. Her practice, which serves nearly 1,500 patients, is starting to see people drop Medicaid coverage.

“There are days where I just run out of energy, ” she said. “We’re doing the best we can.” Bartell said it is helpful to collaborate with other private physicians and share resources when payment challenges arise.

Keep it lean

Dr. David Schechter built his family and sports medicine practice incrementally — developing a patient panel part time while working at other practices and teaching a residency program. He went full-time as an independent physician in 2002.

Schechter has a lean operating model. He is the sole clinician at the Los Angeles-area practice. There is one front-office employee and another employee, often a gap-year student, who takes vital signs and helps with other clinical tasks. Billing is outsourced. The practice’s expense ratio hovers at 35% to 40%, he said.

“My whole philosophy has been easing your way into private practice rather than necessarily jumping in, ” Schechter said. Schechter also specializes in chronic pain management through mind-body medicine, which attracts more patients and sets him apart from other primary care practices.

He also has reduced the number of insurance contracts and moved toward self-pay. For the remaining contracts, the practice is part of an independent physician association, which brings physicians together to increase bargaining power and secure higher reimbursement rates.

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