Starting a Direct Care Practice

Establishing a practice may be one of the most challenging aspects of the direct care journey, but once a physician has succeeded, they get back to focusing more time on their patients. What are some of the things new direct care physicians should pay attention to as they are assembling their practice?

Finding an office

Starting the office search starts strictly with thinking about budget. Undercapitalization is the number one reason for business failure, so make sure to have the proper capital to not only obtain office space but get your office up and running. Direct care practices often need smaller spaces than traditional practices because patient loads are lower. Location matters when choosing space. Direct care practices that are accessible and highly visible retain more patients and have an easier time attracting new ones.

Once financing and locale have been finalized, it’s important to think about whether or not you should purchase office space or rent it. Renting, at least in the beginning, means more flexibility and less risk.

One of the great things about having a medical practice in a direct care environment, is that my practice is so much less office centric – the ability to use texting, email, telephone, and do house calls allows for so much more flexibility.
Brian Birdwell, MD

Brian Birdwell, MD

Main Street Clinic
Lawton, OK

Timing is a consideration as well. Typically, the process of securing office space and filing paperwork takes approximately 6 months. It’s important that aspiring direct care doctors are prepared to devote that amount of time to starting their new practice.

Staffing

One of the greatest advantages of the direct care model is lower practice overhead and correspondingly, a smaller practice staff. Some direct care practices operate without any staff at all, while others that convert from traditional models can reduce staffing by 50%. For many successful practices, however, hiring a trusted and visionary office manager can be extremely valuable.

Ensuring a high quality patient experience is a critical driver for membership-based, direct care practices. Search for staff with excellent communication skills, who can build strong relationships and provide a welcoming front office presence when patients visit the office.

Starting your search in existing networks can be an effective way to recruit new staff, for those looking for a staff member to support their direct care practice. Professional firms can also assist by sourcing highly-qualified candidates and manage the hiring process.

Pricing Guide

Setting per-patient pricing is a key final step in setting up your practice. Membership fees range widely and can vary on an individual and family basis. Accounting for age, geography, and local patient demographics are all key inputs to effective pricing strategy.

Direct care physicians also need to decide how much they need to make to keep their practice afloat, and how much they would like to make in an ideal situation. This calculation can be accomplished taking:

• Sum all expenses (salaries, office space, and all other operating expenses)

• Divide by anticipated size of the patient panel

Assume a baseline of 300-500 patients per physician as an average panel size.9 This calculation will give a practice a break-even price point, and the physician can then consider desired take home pay as a final input in setting pricing for their practice.

When choosing a fee schedule, consider the overhead of managing more complex pricing or if staff will have technology to support your chosen pricing schedule.