Why I Started a Lean Private Practice

The year was 2020. The COVID-19 pandemic was raging and the world had all but stopped. That was the year I started my solo micropractice. This is the story of why I started a lean private practice.

I define lean private practice as the kind of practice which stays lean and nimble, while always razor-focused on patient wellbeing. And this is not one of the “suits” using the term to define some random metric- but a practicing physician, using the word in this purest sense. Wellbeing: that which truly benefits the patient.

Why Private Practice?

My career path has been a tad unconventional since the very beginning. I pretty much stayed home with my children during the first few of years of their lives. It was the most glorious, fulfilling, even if often exhausting years. I volunteered with an organization that provided care to the uninsured to keep with licensing requirements. I knew right away, back in those early days, that I wanted some semblance of a work-life balance, if I was to enjoy medicine.

For the next few years, I picked up some independent contractor gigs. I ran the outpatient clinic for a physician who was coping with health problems. I rounded in the hospital for a small independent practice. I loved the work in both instances. But the pay was terrible. I chalked it up to “newbie pay scale”.

In a few years, when I went back to negotiate (I was only doing the second gig by then), they were not open to making any changes. I was an independent contractor- so the job did not give me any benefits. I paid for my own malpractice insurance, CME, licensing, hospital privileges, etc. Since I was rounding in the hospital, I had no office-related expenses. Essentially, the practice did not incur any overheads on my behalf, expect 5 or 6% for billing. Yet, they paid me only about 50% of charges. It was the “going rate”, I was told.

I interviewed with a couple of other practices. I got lowballed everywhere. I call it the “mommy discount”. Just bringing up part-time work either shut doors in your face or brought up these paltry offers.

Countless women know exactly what I am talking about. Even Michelle Obama recounts facing this same discrimination in her best-seller, Becoming.

I knew that I may be able to eke out a little bit more if I kept up the negotiation but I decided against it. The entire premise of offering someone a low pay was (1) they were not expected to bring enough value to the organization and/or (2) that the person had no other choice and would therefore concede to the low offer.

I decided that neither was true in my case. I decided that if I was going to bring home a smaller loaf of bread, it’s because I work fewer hours, not because someone else is skimming off the top.

Once I’d made this decision, there was nothing to do but hang my own shingle.

Why I Started a Lean Private Practice?

Well, once I’d made the decision to go out on my own, the rest was easy.

I had clarity from the very beginning that it was a leap of faith. An experiment that I was trying out that had as much chance to fail as it did to succeed. I had no footprint in town. No one knew me: not patients, or physicians. I may or may not have had a single patient walk through my doors.

Hence, I was not willing to blow through a lot of my family’s savings to get this going. So, I kept my startup costs to a minimum. I wrote here about How I started private practice for $1200. And found ways to keep costs low as I went along.

The Two Biggest Overheads (and what I did about them)

For a small practice, office space is the biggest line item on the expense side. Right along with it is personnel. I needed a way to bring both of these down if I was to keep my practice lean.

I started looking for office space almost immediately when I made my decision to start practice. I am in a medium-high cost of living area in the suburbs of a sprawling metropolis in the SouthEast. Office space is expensive in my neck of the woods. We’re talking upwards of $35/sq ft/year in base rent for triple net leases. It was out of the question for me.

So I looked into subletting space from other practices. It was a disappointing exercise. Only a couple of offices were open to the idea. and when I asked them for rates, it sounded like all they were trying to do is make a quick buck. One place asked for $1600 for 1 half-day a month to sublet 1 exam room along with access to the waiting area.

At that point, I looked into shared workspaces. The kinds that cater to the non-medical workforce. I knew no one who’d gone this route but it was my only option. I went ahead and listed it as my practice location and put it on my business cards. That’s what makes it real, right?

The personnel was much less of an issue for me. I was always curious about the need for staff, especially before my volume is enough that I need someone in order to increase efficiency. Hopefully, that day is not far. But in the meantime, I am really enjoying not having to deal with the hassle of hiring employees. It has been a boon in these tight hiring markets.

The shared workspace place came with a receptionist who lets me know when my patients show up. I go and bring them to the room, gather history, get vitals along with the rest of my exam and walk them out to the reception area. All of it adds to to face-time with the doctor. My patients love it.

Is it for everyone? No. I have had a couple of patients leave the practice due to the office setting. The first one was very soon after I’d opened my doors, within the first couple of months. It was the wife of some big-shot hospital board of directors. They were very gracious about it, though. They wrote to me saying that they were too old to change their ways, and that my practice felt too much like a startup. #ScrappyStartup.

One step after Another

And I have since kept costs low as the practice keeps growing at a steady clip.

I am still seeing patients at the shared workspace location. And I am still a micropractice.

While the initial decision to keep costs low may have been a practical one, by and by I have realized the benefits of practicing lean. This does not mean that I am tied to any particular thing that I’m doing- it is just a mindset I espouse.

Profit and Loss Statement

A medical practice is a business like any other and has to be run with that in mind. This does NOT, in any way, equate to practicing bad medicine.

The only ways to increase profit are to increase income or to decrease expenses, or both.

With lean private practice, I’m putting my focus on the later.

Since we do not control prices in medicine , ie., reimbursements for patient care- the only way to increase income (without adding services) is to increase volume of patients seen. Beyond a certain point, we all know that doesn’t end well. So, we’re left with the expense side of things.

This is my take on the subject. I would love to hear your point of view. Comment below!

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