By Dr. Sanghamitra Sadhu, Guest WriterI am a nephrologist working part-time running a solo outpatient private practice. Not a line you hear very often. I got here because I always knew that I wanted to work part-time in order to save my best energy for my patients and for my kids. But if I was going to be a practice owner and work part-time, I realized I was also going to have to keep my expenses really low. That’s how my lean private practice was born in 2020, right in the middle of the pandemic.
Here's how I got there.
Right after training, I took some time off to be home with my babies. Then, I did some independent contractor gigs around town to stay flexible. My husband is a busy subspecialist physician, and I have always been the primary parent for our children. After a few years of doing that, I had the urge to “do more.”
As I was interviewing with different groups in town, it seemed I had two choices. I could either work 100 hours a week, and then down the line, I would have a shot at partnership. Or I could work “mommy hours” and get paid for what I did, albeit heavily discounted for the privilege (unfortunately, a pretty common phenomenon).
As it turns out, I wanted to have my cake and eat it, too. I have an entrepreneurial spirit. Ownership—having a stake in something—greatly motivates me. I was loath to give it up. I didn’t think I should have to choose between what I wanted to accomplish at work and spending more time with my kids. After all, it’s the 21st century.
It seemed that the only way I could accomplish that was to create my own practice and shape it to my needs.
These days, I see patients in the office two days a week and spend the rest of my time doing other things I love. Don’t get me wrong. I’m not sipping pina coladas at the beach the other five days. I am always present and available within a reasonable time frame to my patients and colleagues. I do administrative tasks and all things billing-related over those days. But 1) those are short days and 2) it lets me be flexible. I can do them whenever I please—whether it's during school hours or at 6 in the evening, sitting across from my daughter doing her homework.
I also cover myself on vacations. All it takes is 20-30 minutes in the morning before my family wakes up to log into my inbox and make sure nothing urgent is missed. Thanks to my specialty, it’s mainly about checking lab results, though I once sent a patient to the emergency room for critical hyperkalemia while I was at Yellowstone National Park. Most patient inquiries get automated messages letting them know that I am on vacation and that I will address their needs on my return. Anything more serious than that, and they are advised to seek immediate medical attention. My virtual assistant also has access to me if the need arises.
I blew past the six-figure mark in annual revenue last year, and if the first-quarter results of this year are any indication, the practice will grow more than 25% in 2024.
Do I make as much as a full-time physician in my specialty? Of course not. But that is to be expected. In clinical medicine, we largely trade time for money. What was surprising to me was that I made significantly more from working in my own practice than by working the same amount for someone else. It was not quite that they gave me a lousy deal, but it's that their higher overheads dictated that it was all they could afford to pay me and still make some profit off me.
How I Started My Medical Practice and How Much It Cost
I DIY’ed (doing it yourself/myself) the entire startup process for a grand total of $1,200.
I started off as a micro practice without any employees, independent contractors, or third-party companies to help me run the practice—until, that is, my volume was high enough that I was spending evenings and weekends working on the administrative tasks of the practice.
At that point, I brought in a remotely located full-time virtual assistant so I could reclaim my time and avoid doing the least desirable parts of my job. It took three months to train her fully, and now she takes care of both the front-office and back-end work. From answering the phones to scheduling patients, from getting eligibility verification to sorting faxes, and from pre-prepping my notes to calling insurance for denials, she does it all.
Last but not least, I work out of a shared workspace location. That wasn’t my original plan. Ideally, I wanted to sublet an office from an established practice, but I had no way to figure out where to find such a space. I cold-called a few practices but got only a lukewarm response.
So, I ended up at the shared workspace location. I work alongside therapists, lawyers, a neuropsychologist, and a chiropractor. I think there might be a roofer in there, too.
It has taken me some effort to go from being embarrassed about my practice setup to being willing to talk about it on the internet. What brought about the shift was the realization that I provide true value to my patients. I’m taking care of them just as well as I would if I had a fancy office and a bunch of staff.
And sure, they know it’s lean. How many other physicians answer their own phone calls? How many work out of a shared space? I occasionally still get the question—and now, I am happy to answer that, “I understand that this setting is out of the box for medicine. However, it works for me and my patients because it allows me to give you more time and attention by keeping my overhead low.” They love it when they understand why I'm doing this.
I also have a bunch of small business owners and entrepreneurs among my patients. And they LOVE my concept. They get it because they get small business math.
This happens to be the very definition of lean practice.
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What Is Lean Private Practice?
The Lean Enterprise Institute defines “lean” as a way of thinking about creating needed value with fewer resources and less waste. It consists of continuously experimenting to achieve perfect value with zero waste. And value is always defined by the customer/client—in our case, our patients.
Lean principles come from manufacturing—specifically via Toyota, the Japanese car manufacturer. Through the second half of the 20th century, Toyota developed the Toyota Production System (TPS) with these goals: reducing waste and perfecting the quest for value. These guiding principles were widely adopted by other manufacturers, and they have since trickled into many diverse industries.
Toyota is lean, but it’s still one of the most respected car companies in the world because of its exceptional quality and service. It's not just that you can be lean and still try to provide world-class value. It's the fact that lean HELPS you provide world-class value. If you reduce waste and make your processes more efficient, you deliver MORE value—more of the things that matter.
Toyota can lower its production costs by running efficiently—and then it passes on those savings to customers in the form of competitive prices and better customer service.
Lean is not about cutting corners. It is not about cost-cutting. It’s about focusing on value.
Why Should We Think of Lean Principles in Healthcare?
I’ve always thought private practice is the best way for most physicians to practice. It’s how healthcare was always delivered—between a doctor and their patient without interference from anyone else.
The current epidemic of burnout and clinician distress among physicians, particularly among corporate-employed physicians, only strengthens my belief. Yes, private practice has its fair share of challenges—and with insurance companies around, the adage “without interference from anyone else” is far from true.
But we still find that private practice doctors often have less burnout than corporate-employed docs for the main reason that burnout is not caused simply by a heavy workload. Private practice docs often work just as much as their employed counterparts. We don't necessarily derive job satisfaction from extrinsic rewards like money, prestige, and promotions. But we get it from intrinsic rewards like helping others, having autonomy, getting respect, and experiencing personal growth.
And it is the opportunity for intrinsic rewards in private practice that keeps burnout at bay for many private practitioners.
Add to that the potential for financial success because you are not limited to what someone else (read: a business suit) thinks you are worth. You're only limited by your imagination and industry with the ability to craft a life and career that aligns with your values and ethics and to take care of your patients exactly the way you choose—without being dictated to by someone with half your qualifications.
Private practice sounds worth it, right?
But despite the benefits that it offers to all the stakeholders—namely physicians, patients, and payers—few(er) do it these days.
The 2022 AMA Physician Practice Benchmark Survey showed that the proportion of physicians in private practice had fallen to its lowest ever: 46%, down from a healthy 60% just a decade ago. It is not hard to figure out why. Most of the challenges are financial. Reimbursements and the cost of doing business have been going in opposite directions for years—and it all came to a head with the COVID pandemic and then high inflation. Plus, regulatory burden is at an all-time high, and insurance shenanigans have never been worse.
Despite these challenges, I still think that the autonomy that private practice affords makes it worth the effort.
But there’s a caveat.
To stay relevant and thrive, the practices of today and tomorrow cannot look the way they did even a short 10 years ago. The days of redundancy and waste in private practice are gone.
Enter lean private practice, where lean innovation provides the solutions that private practices need to stay competitive in this changing healthcare landscape.
What Does Lean Private Practice Look Like?
I gave you an example of how my practice looks.
But that is only one example of a lean practice. Medicine is not a one-size-fits-all. Your lean practice may look very different. You may have multiple physicians and staff members and several locations and still run lean.
That's because lean is a way of thinking. It’s a mindset. It's a culture—a culture that is laser-focused on providing true value to patients while eliminating everything unnecessary or wasteful.
The North Star is the point of perfect value with zero waste. That is obviously not a destination you reach, but it can be your guiding principle.
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How Do You Lean Practice?
You start by defining the value you provide to your patients. Value is always determined by the people you serve, namely your patients. Then, you enumerate all the processes that deliver a certain value to your patients. This is called value stream mapping or lean process mapping.
Following this, you aim to optimize each step in every process for maximum efficiency—that is, you use the least amount of resources with minimum, or ideally zero, errors.
It seeks to simplify processes: the easier the job, the less skilled the worker needs to be and the less the chances of error. It focuses on measuring actual progress rather than vanity metrics. These goals are achieved with constant iteration—a process the Japanese call “kaizen.”
Defining Value
What are some things patients might find valuable in a practice? These could be:
- Reaching a human on the phone
- Getting the first appointment within a reasonable timeframe
- An efficient check-in process
- A short wait to see the doctor
- An interaction with the physician that does not feel hurried
- A quick, easy checkout process, including making payments
- Getting questions answered between appointments
Chalk out each step that goes into bringing these values to your patients. Strike out the unnecessary steps. Streamline the remainder. Unclog the bottlenecks. Put it to the test. Come back to the table, measure, and iterate. Rinse and repeat with every process of every value that you wish to provide.
Making Our Processes Leaner
You will want to look at each one of your processes and work on making them more efficient. Here are a few examples.
#1 Phone Calls
Take the issue of patients trying to reach a practice. The high volume of calls and messages has many practice owners (and patients) frustrated. I have been able to get to a pretty low call volume, and I’ve done this by instituting a secure messaging system (messages take far less time to respond to than phone calls) and by pre-empting calls as best as I can.
If I repeatedly get calls for a certain issue, I find a way to get that information to patients before they have to call in and ask about it. For example, new patients get a text message with their appointment date and time, the location of my practice, and a link to the online registration forms. All patients get a text reminder to do their labwork when their appointment is two weeks away, and then they'll get three appointment reminders spread out in the week before their appointments. This also helps to minimize no-shows and to keep our schedule optimally booked. We also have a waitlist of patients to pull from for those inevitable last-minute cancellations.
#2 Office Space
Office space is another big area where practices can run lean. Office space is expensive, whether you buy or lease it.
I work out of a shared workspace location. This is easily doable if you are a small or part-time practice.
When you are first starting out or expanding to a new location, consider subletting just as much room as you need. It will reduce your startup cost and reduce your financial stress by lowering overhead, and it may let you start your practice without getting a loan.
As an established practice owner, you want to optimize your space to the fullest. A physician ideally needs two exam rooms—at the most three—to see patients. Any more than that, and the exam room is another glorified waiting room.
Dedicated personal offices for physicians are often poorly utilized, and they can be repurposed. You can create a bullpen for staff and pods for each physician/MA duo—this can make workflow smoother and often works better than putting people in silos.
All the space these measures open up can then be subleased to another physician or another healthcare professional. This will create an additional revenue stream for the practice, and it will enable you to bring in an individual or entity that is a value-add for your patients. Win-win-win.
#3 Revenue Cycle Management
Wastes in the revenue cycle management are even more critical, and they can be devastating to the viability of a practice. If you use a third-party billing service, it involves many processes and people— people outside of your organization. Evaluate every process within the revenue cycle and make every effort to minimize waste within them.
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Measuring Success in Lean Practice
We focus on the true measures of value and how well we are doing with them—not by vanity metrics.
For example, we don't measure how many phone calls our practice gets. We measure how easily our patients can reach us when they need our help. Instead of focusing on how far out we are booked with new patient appointments, we measure how efficiently we can get in new patients to be seen.
The Future Is Here
The days of redundancy and waste in private practice are gone. The practices that are poised to thrive are the ones that can think outside the box and innovate.
Lean private practice is a model that has the mindset and the agility to thrive despite all the turmoil in healthcare. This will take a mindset shift for everyone involved: physician practice leaders, our patients, and society at large.
This time around, physicians will be at the helm, leading the change. After all, author Nancy Duarte said, “The future isn’t a place that we’re going to go. It's the place you get to create.”
Is running a lean practice a good way to make money and find fulfillment? How else could you make your practice more lean?
Thank you, Dr. Sadhu.
I am curious to learn more about how you found your virtual assistant, how you trained them, how you determined what to delegate, developed SOPs, etc
I have been toying with the idea of a part time VA for a while and think it could reduce some headaches.
But that is only assuming I can find the right person – easier said than done.
Thank you.
Hi, you will probably be pleasantly surprised by the quality of people available when we expand from our local geographic area to a much wider, more global talent pool. There are well-qualified professionals- often nurses and pharmacists in other countries- who are not well-paid in their own health systems and turn to work as VAs for US companies.
Yes, the very first one you hire may not be your forever person but just as you would interview a few candidates for an in office position, you would do the same.
There are now several agencies that will help you vet and find a medical virtual assistant. I generally find it useful to go through such an agency, since I do not have the ability to reliably vet an individual in a different country.
How you train them is crucial, and does take time. As I mentioned before, it took me exactly 3 months to train my current VA. I made videos of many of our training sessions, so she could refer to them in the future for guidance. It will also help to train future employees.
We have a shared Google document that serves as our Policies and Procedures manual. Every single process is written in there, including the script that I want her to use to greet a patient when she answers the phone. Initially, making the document was no fun. I had to literally download my brain onto paper. This is why I often recommend that start up practices do this well in advance, right as they are beginning their practices, and have only a few patients to see. It is much easier to tweak the document than write from scratch when your panel is full.
I kid sometimes that at this point, my virtual assistant does everything apart from seeing patients. That is hyperbole, of course. I started with the most important tasks and gradually added tasks to her plate as she mastered the initial bit.
Hope this helps!
Mitra
Nice job on your post.
I worry for about the slow death of private practice (both in medicine and in my field, dentistry). Like you mentioned, private practice can benefit the provider financially and qualitatively… but it also benefits the patients in similar ways. Perhaps emphasizing a “lean” philosophy will be a key to revitalizing private practice.
Thank you, appreciate your kind words!
Yes, 100% agree- private practice lets us own our work and therefore our lives.
As for going lean, it just makes sense in the current landscape. With falling reimbursements and rising cost of doing business, something’s gotta give. By running lean, you keep the value intact and trim away the fat. Much of it is a mindset thing- not only for our patients and society at large, but ourselves, too. We fall into trap of “keeping up with the Joneses” at work just as much as at home. The work equivalent of the doctor McMansion is the fancy office, often lying half unused.
And, just like the good Dr Dahle says about personal finance- “if you focus on house and car, you can drink all the lattes”. In private practice- the equivalent to house and car is office space and staff. These are the two biggest expenses for a practice- and if you can save on these two, you’ll be in a good place. Even in private practice.
Best,
Mitra
Thank you Dr. Sadhu for this article and kudos to you! I would love to see a “how to” post on virtual assistants – what are the best companies, how much does this cost, how to best utilize, etc.
Thank you!
That is a great idea- I’m happy to write a “how to” on virtual assistants.
It is astounding how much can be done remotely these days- nearly every process is electronic. Back-office processes, for sure- but even front- office tasks, such as check-in- can utilize remotely located staff. It does take some patient education- and some push-back is to be expected- but most patients get that healthcare is going through some turmoil, even if they’re not aware of all the nuances.
Best,
Mitra
Great article!
I would love to see you describe more virtual assistants. That’s something I’ve been exploring and could benefit from how best to get started.
Thanks!
Thank you!
I think starting with VAs is a smart idea. It allows you to use talented folks from around the world to easily do many of the tasks in an office that does not require face-to-face interaction with patients for very reasonable rates. The first step in getting started is to figure out exactly what you need them to do. Down to the last detail. This takes a little bit of time. Feel free to outsource this to an office manager or someone who may be doing the job right now- and then you can fine-tune it.
The better a job description you have, the more likely you are to finding the right fit for it.
Best,
Mitra
One of my favorite guest posts. Excellent write up. Love hearing from private practice physicians.
Thank you- that’s a very generous compliment!
It is easier to believe something when we see an example of it. The narrative that private practice is dead is a disservice to our med students and young trainees- who thereby are not even given the opportunity to explore it for themselves. It makes me wonder if there are forces behind that narrative that stand to gain from it. As always, knowledge is power.
Best,
Mitra
Thank you- that’s a very generous compliment!
It is easier to believe something when we see an example of it. The narrative that private practice is dead is a disservice to our med students and young trainees- who thereby are not even given the opportunity to explore it for themselves. It makes me wonder if there are forces behind that narrative that stand to gain from it. As always, knowledge is power.
Best,
Mitra
Different strokes for different folks. I just reviewed an upcoming guest post from a doc who sold their practice to a corporation and is very happy about it!
Thank you!
I told myself at the beginning that this was the only way I was willing to practice- so sinking wasn’t an option. I also liked the fact that I was 100% responsible for my success or failure- and that felt oddly freeing.
There are certainly specialties which are largely hospital-employed but many procedural fields also lend themselves well to ownership. Explore a bunch of options to figure out what you like best and don’t shy away from doing something different. After all, “normal” is just a setting on the washing machine 😉
Best,
Mitra
Hi Dr Sadhu, we are peas in a pod. I started a similar practice in 2014 as an interventional cardiologist. I was lucky to have colleagues who had shared space to sublet and staff to share. It’s great that it helps them offset overhead as well.
I completely agree that the most valuable ‘product’ is our time and expertise. I have a much better work-life balance, autonomy and my patients are not rushed. It takes the hard work you so clearly described. Thanks for writing this article
Bryant
Kudos to you!! I love that you’re doing this as a cardiologist! It’s all about the mindset- ours, our patients and society, at large. We have preconceived notions how a physician office should look and operate. Time to retire the notions that don’t serve our patients or us.
Keep up the strong work!
Congratulations for Writing such innovative and thought-provoking article. I am running a similar practice in obesity medicine in Dallas Fort Worth area where I work three half days a week. It’s amazing how much currency and see I have now in my own way of practicing medicine as well as taking care of my family at the same time. It just boils down to how much value you provide to your patients. Most of my patients love it. Dr Sadhu was a very helpful resource when I started about a year ago! I truly think this is a win win for both doctors and patients!!
Hi, so happy to hear that your practice is thriving!!! Isn’t it amazing that most patients do get it? They see the brokenness of the system and are also rooting for viable solutions.
Here’s to your continued success!!!
Mitra