Here is an interesting take from an economist looking at the “business model” of small health care practices.

For most small business owners, the productivity of each employee increases revenue. Whether the product is a widget or a hot-dog or computer software, the general concept of employee productivity is that employees increase revenue and the more revenue per employee the better. Thus as sales escalate to the point of needing another employee, the revenue from that person’s productivity more than covers his cost. Thus scaleable businesses typically have desirable business models.

In private practice medicine, revenue is dependent on the productivity of one person - the doctor. Hiring more employees does not increase his productivity. The only thing that can increase revenue is for the doctor to work harder and faster to see more patients or do more procedures. He is the rate-limiting step in the business model. This is the reason why your trips to the doctor’s office get shorter and shorter.

Check out the rest of this article here.

Developing a strong brand has a definite place within private practice healthcare.  A lot of practice owners don’t (or don’t want to) acknowledge this, thinking [erroneously] that simply hanging out their shingle and providing good care will keep the practice full. 

Guess what?  Everyone provides good care…at least we all say we do.

To develop a following requires a brand, and it doesn’t matter if you are a doctor, dentist, physical therapist, or an auto mechanic.  Like it or not, your “brand” is what comes to mind when your patients are deciding whether or not to come see you for the first, second, and 100th time. 

One thing about a brand is that one will find you whether or not you put in the time, money, and effort to craft it yourself.  And depending on who you are and what you create, this can be a good or bad thing.  You might be the doctor with bad breath, the dentist with the rude front office staff, or the physical therapist who is always late for appointments - believe it or not, these brands exist even though we would never choose them.

The process of branding can be likened to the development of our own personal attributes.  Our looks, clothes, personality, achievements, networks, experiences, and anything else that adds to (or detracts from) our appeal to others is basically what constitutes our own “personal brand.”  Now, branding as related to our personal development is only partially in our own control - we can’t control what we look like (well, thanks to the medical field I guess we can), our personalities are inherently difficult to change, and our achievements, networks, and experiences are in part built from the innate attributes that we are born with. 

When branding our private practices we have much more freedom to carefully craft a brand position that will appeal to our market, helping to make our practices more successful through broader (or in some cases, very specific) appeal.  It takes time, energy, and often entails a reasonable budget, but is there any doubt that development of the right brand is worth it?

This post from the Branding Strategy Insider talks about the seven concepts critical to positioning your brand in your market.

What seven concepts are critical to positioning?

   1. Perception (their’s, not your’s)
   2. Differentiation
   3. Competition
   4. Specialization
   5. Simplicity
   6. Leadership
   7. Reality

We understand the business of healthcare.  Well, at least we think we do.

From our perspective, “business” has a role in healthcare, and we believe that in today’s healthcare arena we can’t stand around and expect things to get better unless we contribute to the solution ourselves.  At Vantage, the particular tool we use to effect change within our scope of influence is pretty simple…it’s entrepreneurship.  There’s not a single way we do it, not a perfected process that we share with the world, and we often don’t even use the same ideas twice.  Entrepreneurship doesn’t work like that, at least not around here.

To us, entrepreneurship is always a unique process, but it does involve three common elements: (1) the recognition of opportunity, (2) the acceptance of the risk required to take advantage of the opportunity, (3) and the enjoyment of the rewards that [may] follow from entrepreneurial endeavors.  By involving these elements in the development of private practice business models within healthcare, practice owners will find a way to navigate through whatever the economy, government, or corporate America throw our way.

The trick is not knowing how to “fix” the healthcare system.  There isn’t a single fix.  The trick is being creative, innovative, and entrepreneurial in our approach to today’s healthcare environment, and with this, being willing to experiment and learn about what works and what doesn’t. 

There are many business models in development today (and many that have been in development for years) that might, and might not change the face of our healthcare landscape.  But, in the same way that the creation of some of our most valuable inventions and most successful business models of today started with nothing more than a few visionaries willing to accept some risk in order for the chance at some future reward, so our healthcare industry exists as well.

On The Healthcare Entrepreneur and at Vantage Clinical Solutions, we look first to encourage entrepreneurship within our industry, and second at the merit of the ideas that come our way.  Bad ideas can be refined into good, but ideas that are never brought to the table can do nothing to help our current healthcare situation in America.

In a recent post on the Health Business Blog, David Williams also acknowledges the role of entrepreneurship within healthcare, and provides examples of entrepreneurs within a variety of areas within the healthcare industry.  It’s a great post and a quick read, so take a look.

I’d like to suggest that entrepreneurs and private industry more generally are underappreciated assets in the health reform debate –and that just possibly some entrepreneurs are already in the process of helping the country turn the corner on key dimensions. If that’s true, the role of policymakers –and voters– becomes clearer and more achievable: to create the conditions under which entrepreneurs can thrive.

More and more I’m seeing healthcare practices (medical, dental, physical therapy, optometry, etc.) getting really entrepreneurial about their business models.  Most of this is born out of necessity in order to find ways to stay profitable, but some of it comes from clinicians making the decision to run their practices in a way consistent with their passions, interests, and lifestyle.

There is a lot to be learned from a client of mine who is starting up a practice.  She is really doing things right.  When developing her business concept she knew early on that she wanted her practice to be different, and truly wanted to enjoy the way she spent her time each and every day.  She began with a mission and vision for her practice model, and has crafted everything else around it.  From brand position, to information systems, to software selection, to interior design, to financial modeling, she has built a practice that all ties back to her mission and vision.  This is the first step in creating a business that lasts.

There are some very practical things she is doing right as well.  She is putting a great team of business advisors and experts around her and has allowed us all to provide her with direction and guidance.  She realizes that this is a team effort, and the better the team, the better the end result.  Financially she is sound, and has secured the necessary operating capital to get her through several months of operations based on “worst-case” scenarios.  And regarding her patient clientele, she is pounding the pavement in order to build up her caseload months before the doors even open.  She will be successful for the long term, and it’s because she’s acting not only like a clinician, but also like an entrepreneur.

I read an article today that started me thinking about the client above, and it was about an entrepreneurship forum in Kansas in which business owners were learning about how to plan for success for the long haul.  Interestingly, one of the speakers at the entrepreneurship forum was a founder of a medical group.  This is exciting to me, as I believe that entrepreneurship within healthcare is the answer to many the problems that befall us in this industry.  Private practice owners need to become entrepreneurial in their approach to business practices in order to make significant shifts in payment models, service offerings, and cost reduction.  I’m really glad to see that entrepreneurship in healthcare is being used to educate others through this healthcare panelist, and I especially love to see it within the clients I work with day to day.

Three successful Wichita service-based entrepreneurs told a story of faith Thursday at Wichita State University’s Center for Entrepreneurship.

Have a business idea, believe in it, find people who complement your talents and establish a brand, said business owners in medicine, advertising and investment.

Joseph Galichia, founder of Galichia Medical Group; Sonia Greteman, chief executive of Greteman Group; and Corporate Lodging Consultants founder Barry Downing were the speakers at WSU’s final spring entrepreneurship forum.

The advice-oriented session focused on what makes a service-based business go, something the three panelists largely agreed on.

I’m a runner.  I’ve had plenty of periods where I don’t run for a while, but I always come back to it, and it’s always for the same reasons. 

Nothing makes me feel quite the same as I do after putting in a 5 miler.  I breathe deeper, get good time alone with my thoughts, feel better during the day, and on and on.  At the same time, nothing is quite as difficult to stay consistent with as running 5 days a week. 

As I was running the other morning, I began thinking about some of my private practice clients, and how in many ways they face a similar challenge.  Just as I always feels good when I’m done running, I’ve found that many private practice owners have the same feeling when they’re “done” with a big project, “done” with the startup phase of their practice and finally have the doors open, and “done” with getting a big bank loan finalized. 

Being “done” always feels good, whether running the streets, or running a practice, but the process of reaching that end goal isn’t always a whole lot of fun.  As much as I love running, it’s not really the feeling of being out of breath, the constant pounding that I feel with each step, or the burning in my legs that makes it worthwhile.  It’s the feeling of accomplishment that is achieved when I put each of those tiny steps, deep breaths, and aches and pains together over a period of months and years to achieve personal accomplishments that can be obtained in no other way.

When I work with a client, I spend a lot of time discussing vision, personality, lifestyle, values, and a lot of other stuff that doesn’t have an immediate tie to the bottom line.  The reason for this is that running a private practice, like a 5am running routine, is only going to be successful if it lasts for a really long time, and the only way to achieve this by tapping in to motivation, experience, and vision.  To do this, I use the same techniques to keep myself running that I do with my private practice clients: Stay focused on the end objective, always be prepared for bad weather, break each session (project) up into bite-sized milestones, enjoy the journey, and don’t go it alone.

I’ve found that when these elements are taken into account along the way, the bottom line usually falls right into place.