By: David Light
Many private practice owners often find themselves pondering why their competitors are growing so rapidly while they seem to be stagnant. An anonymous private practice owner once echoed the sentiment, saying, “I can’t understand why our competition is growing so fast and being so successful, while we are not.” This feeling resonates across various geographies, specializations, and years of experience in practice. It often stems from seeing larger organizations thrive, which can be disheartening for those who ventured out independently after leaving similar entities.
But why do these larger organizations succeed? The answer lies in their ability to run like a company rather than a small “mom and pop” outfit.
Running Like a Company
Successful larger organizations operate with a structured corporate model. They respect the need for supportive nonclinical personnel and see these roles as investments rather than costs. Such a thriving company typically has:
- Directors of Business Development
- Strategy Officers
- Human Resources Directors
- Legal Counsel
- Financial Support Teams
These professionals are essential in identifying new locations, expansion projects, ancillary service offerings, recruitment of new staff, retention programs, and capital opportunities for growth. They follow a systematic meeting and reporting structure that fosters accountability.
Strategies for Smaller Practices
For smaller private practices that may not have the resources to hire a full suite of talent, there are still effective strategies to implement:
1. Financial Management
Start with your practice’s financials. Regardless of size, there should be a formal month-end close process, reconciliation of accounts, and presentation of key metrics. This includes an income statement, balance sheet, cash flow projections, patient encounters, new patients, gross billings, net collections, Days Sales Outstanding (DSO), and accounts receivable. Establishing and tracking this baseline is crucial for judging growth and setting future goals.
2. Optimize Staff Utilization
Ensure all staff members are utilized to their highest potential. For instance, while the owner may know how to check eligibility of benefits over the phone, that time could be better spent on tasks that specifically require an owner’s expertise, such as business growth and managerial decisions.
3. Always Be Hiring
Successful organizations are always on the lookout for talent and are constantly recruiting. Adopting this mentality is essential. Waiting to hire only when staff is needed can lead to filling positions with less-than-ideal candidates, hindering growth.
Leveraging Capital for Growth
Running a practice like a larger organization does incur more costs. However, leveraging capital through investment opportunities or debt can expedite the growth process. If your model is proven and you are confident in your growth potential, consider these options to progress from point “A” to “B” more efficiently.
Adapting a corporate-like model in your private practice can pave the way for success. By optimizing financial management, utilizing staff effectively, and maintaining a constant recruitment mindset, small practices can emulate the growth seen in larger organizations. While it may require an initial investment, the potential return on investment in terms of growth and sustainability is significant. Consider these strategies and assess how they can be implemented in your practice to unlock newfound success.
