Micropractice Model

THE BASICS OF A MICROPRACTICE

A micropractice is an independent medical practice designed to be lean and patient-focused. The majority are run by one physician who has complete control over the work environment and the care provided. They focus on optimizing the smallest functional work unit capable of delivering good care.

Because limiting expenses is a priority, micropractices have few tangible assets. The office (if there is one) has one or two rooms. Most have no staff other than the physician. Any other staff have wide-ranging responsibilities involving both patient care and administrative tasks.

The doctor is responsible for many, if not all, business operations. Being personally responsible for scheduling, check-in, rooming, ancillary services, billing, and advertising — on top of patient care — is a lot of work, but this allows for ample control and flexibility. For example, there can be more variation in appointment lengths and clinic hours than is feasible in a standard medical practice.

The phrase ideal medical practice is used to describe this practice style. This comes from the belief that, for a medical practice to deliver care that is truly patient-centered, it needs to be free from any obstacles standing between the patient and the doctor.

UNCONVENTIONAL ASPECTS OF MICROPRACTICES

Micropractices challenge the traditional model of medicine in that they do not focus on treating as many patients as possible or offering a broad array of services that require support staff and equipment. In many cases, the streamlined nature of a micropractice allows the doctor to spend more time with each patient than would be possible in a typical outpatient practice, and remain financially afloat. This translates to improved patient relationships, a loyal patient panel, and a strong reputation.

The United States has seen a shift toward large healthcare systems and corporations buying out small physician-owned practices. By keeping costs low and maintaining efficiency, the micropractice offers a hedge against the risk of being swallowed up or driven out of business by large systems. Low overhead costs allow for care delivery at a fraction of the cost, making micropractices competitive in the current market.

Micropractices also benefit from their agility. Owners can make decisions without having to consult with higher-ups or tackle bureaucratic processes. They can quickly respond to changes in medical practice standards, regulations, and patient needs and adjust their operations accordingly. There is no need to train staff on how to implement changes because there are no staff members to train.

Another characteristic of micropractices is their reliance on technology rather than personnel to keep the practice running smoothly. Owners choose technologies with two goals in mind: to keep costs low and allow them to spend more time with patients. These tools can include scheduling apps, HIPAA-compliant patient communication solutions, and coding and billing software.

Physician satisfaction with this model is high. In a survey of micropractice owners, one respondent stated, “I would not trade this model for anything short of bankruptcy.” Another remarked, “I have never been as happy practicing medicine as I am now.”(1)

STARTING A MICROPRACTICE

Primary care specialties are the most suitable for starting a micropractice, although with creativity and careful planning, physicians of almost any specialty can use this model. Successful micropractices tend to have a narrow scope of services, since their minimal equipment and space makes it difficult to do procedures, labs, or specialized testing.

The ease of starting a micropractice is among its greatest benefits. There is far less to think about in terms of planning and implementation compared to a traditional medical practice. A barebones practice can operate as a sole proprietorship and be opened with merely an exam room, a few pieces of furniture, a computer, and a way to take payments. In one report, a micropractice owner went from concept to seeing patients within three months.(2)

Optional startup steps include registering as a formal business entity with the state (such as a limited liability company or professional corporation), credentialling with health insurance companies, and building a practice website.

The EHR is at the heart of a micropractice and is one of the highest recurring expenses. Look into several EHR options but avoid selecting the cheapest option. Other technologies, such as scheduling and billing software, can pick up where the EHR leaves off and support other processes. Determine how each technology will fit into your practice’s processes or how your processes will adjust to fit with the new technology.

GROWING A MICROPRACTICE

Some micropractice owners have no desire to grow their practice beyond a certain patient panel size. There is nothing wrong with this approach, but others may want to accept additional insurance plans, move to a bigger office space, buy a piece of diagnostic equipment, or grow in other ways. Regardless of the goal, growth should take place in a way that maintains low overhead costs.

For a physician running a micropractice without any employees, everything falls onto their plate: copying and faxing medical records, spending time on hold with insurance companies, and placing orders for supplies. Unexpected situations inevitably arise, and someone needs to handle them. This is fine early on in your venture; however, as your patient panel increases, it may become challenging to manage everything. When the administrative and operational tasks feel like a burden, it is time to hire an assistant to allow you to spend more time providing billable services.

Collaborating with other micropractice owners is another way to grow while maintaining your practices’ autonomy. Creating teams for backup and sharing resources such as an EKG machine or billing service can reduce costs without letting go of your status as an independent solo practice.

Exiting a micropractice can be difficult. In most cases, the physician is the business. Because there are few tangible assets to sell, prospects for finding a purchaser for the practice are limited. Some physicians may choose to simply dissolve their small business.

FINANCIAL CONSIDERATIONS

Low startup costs are a notable advantage of micropractices; reports have cited startup costs of less than $10,000. Others are in the range of $25,000 to $50,000(3), which may seem hefty, but pales in comparison to the average medical practice startup expense of closer to $100,000.

Overhead expenses are in the range of 10% to 15%(4,5) on the lower end and 30% to 35% on the higher end. Compare this to an average overhead of 60% for a traditional primary care practice, of which staff salaries and physical office space are the largest expenses.

Revenue per patient varies depending on the services offered. Anecdotal evidence suggests micropractices can be financially successful while simultaneously being affordable for patients. One family physician micropractice owner who “does everything from running the website to answering the phone to cleaning the exam room,” is able to charge $35 per appointment thanks to the micropractice model.(6) A financial benefit of micropractices is they can be profitable soon after opening; you won’t wait years to see a return on your investment.

Most physicians who own micropractices earn less than they could in a traditional practice arrangement.(1,7) However, the income can be reasonable, especially when taking improved work satisfaction into account. Moreover, the inflation-adjusted average income for primary care physicians has actually decreased in recent years(8), making the financials of owning a micropractice more appealing.

Excerpted from 50 Unconventional Clinical Careers for Physicians Unique Ways To Use Your Medical Degree Without Leaving Patient Care by Sylvie Stacy, MD, MPH.

References

1. Paddock E, Prince RJ, Combs M, Stiles M. Does Micropractice Lead to Macrosatisfaction? J Am Board Fam Med JABFM. 2013;26(5):525–528. doi:10.3122/jabfm.2013.05.120278

2. Graff K. A Micropractice/Community Partnership Model for Lifestyle Medicine. Am J Lifestyle Med. 2017;12(2):124–127. https://doi.org/10.1177/1559827617726524

3. Akifox. How To Get Started in Solo Practice. SoloDoc. October 1, 2004. https://akifox.blogspot.com/2004/10/how-to-get-started-in-solo-practice.html

4. Parvus Medical Suites. What Is a Micropractice? January 4, 2023. https://parvusmedicalsuites.com/what-is-a-micro-practice/

5. Bernard R. Direct Care Financial Realities: What You Need To Know About Income and Overhead. MedicalEconomics. June 1, 2022. https://www.medicaleconomics.com/view/direct-care-financial-realities-what-you-need-toknow-about-income-and-overhead

6. Cohen A. Pittsburgh’s Insurance-Free Doctor Charges $35 Per Visit. Bloomberg. December 13, 2019. https://www.bloomberg.com/news/articles/2019-12-13/pittsburgh-s-insurance-free-doctor-charges-35-per-visit

7. Guglielmo WJ. What’s a Micropractice. Med Econ. 2006;83(23):51, 55–57. https://www.medicaleconomics.com/view/whats-micropractice

8. Doximity & Curative. 2023 Physician Compensation Report. Accessed November 3, 2023. https://press.doximity.com/reports/doximity-physician-compensationreport-2023.pdf