Episode 87: How the Small Practice Can Survive Today, Pt. 1

There has been a slight shift towards more physicians working at hospitals, but will that really spell the doom of small practices? In this first of a two-part series, Michael and Scott discuss keys for the small practice to survive, including how to diversify referral sources, have the right mix of specialties, and leverage their brand to their advantage.

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Full Transcript

Announcer: It’s time to think differently about healthcare, but how do we keep up? The days of yesterday’s medicine are long gone, and we’re left trying to figure out where to go from here. With all the talk about politics and technology, it can be easy to forget that healthcare is still all about humans. And many of those humans have unbelievable stories to tell.

Here, we leave the policy debates to the other guys, and focus instead on the people and ideas that are changing the way we address our health. It’s time to navigate the new landscape of healthcare together, and hear some amazing stories along the way. Ready for a breath of fresh air? It’s time for your paradigm shift.

Michael: Welcome to the “Paradigm Shift of Healthcare,” and thank you for listening. I’m Michael Roberts, here today with my co-host, Scott Zeitzer. If you’re just tuning in for the first time, this show is focused on the many ways healthcare is changing, and how the consumerization of healthcare is affecting practices. We’ve looked at these shifts from a number of different angles, but we’ll really be focusing on practices in upcoming episodes. We talk about this topic on a regular basis at p3practicemarketing.com, and we invite you to be a part of that conversation. Today, we’re going to talk about keys for the small practice to survive.

Scott: Yeah. We were talking about this, and folks, that’s what we do. We talk about, “What are we going to be talking about next week?” That kind of conversation. And this article popped up. It’s Fierce Healthcare, I believe, right?

Michael: Yeah.

Scott: That’s the citation there. And it describes this very slight shift, but it is a shift towards more physicians going to hospitals rather than the small practice. And I think it’s titled…here, let me read it. “Physicians’ departure from private practice has accelerated since 2018, AMA says.” And it starts out by saying that, “Physicians are less often working in physician-owned practices and more often seeking positions at larger medical practices.” Okay. And that’s the AMA survey that’s suggesting that. Everybody who’s listening, they’re probably nodding their head one way or the other, you know, like, “Oh, yeah, I completely agree with that.” Or, “Nah. It’s not happening.” It’s a slight shift.

So, here are some trends here, 49.1% of the 3,500 national survey respondents were working in private practice. And it came down from 54% in 2018. So, 20…so, it’s a slight drop, and it’s first time that the portion has dropped below that 50% level. And that’s a big deal that it’s going below 50%. I do know my gut is telling me that a lot of younger people are kind of taking a step back and saying, “I’m not sure I want to work 14 to 16 hour days,” if they’re orthopods or neurosurgeons, etc. So, certainly, that’s part of the equation. I also think that there is no standard anymore. You know, Michael, remember the old days, like, essentially, hey, the doc graduates, the doc goes to find a small practice. That’s that. And that’s not the case now. And so I do think that that’s part of it.

There’s also another quote here, “Complementing this was a similarly unprecedented change in the percentage of physicians working in practices with 50 or more,” that’s a lot of physicians, “which AMA said had jumped from 14.7% to 17.2%.” So, these mega groups. Now, again, these are all physicians, not just specifically orthopedic or neuro. If you’re an ortho or neuro, you gotta kind of…we had to dig a little bit more deeply. I’m kind of curious what those patterns look like for those particular specialties. I mean, I do know there are some mega orthopedic shops out there, but not as many as that. But what you are seeing are a lot of orthopedic surgeons, neurosurgeons, etc., just going to work for a hospital.

So, they said, the last bullet I wanted to bring up here, “Based on accompanying age data, that finding outlines a pattern of older physicians retiring from small practices more quickly than they’re being replaced.” And then it starts to make sense, right? So, instead of all the young people coming in and just replacing the old people leaving, now, the old people are retiring, and hopefully going to their own vineyard somewhere in Tuscany, and the young people, instead of just filling that slot automatically…some of them are, indeed, and some of them are going, “Nah, I’m going to go work for the hospital.” So, what does this mean for the small practice? That was a really long conversation for me about that.

Michael: With all of this stuff, anytime there’s any kind of shift in how employment patterns are working and how medicine is being practiced, the implications, if these trends continue, if things keep going this way… I mean, how many articles have we seen over the past… I’ve been working at the same company as you for eight years now, Scott. You know, just in that time that I’ve been working with you, the number of times I’ve seen “the small practice is going away,” “the small practice is dying,” like, how many articles would say that kind of stuff? And it’s like, eight years later, we’re still having the same conversation, and for the first time, we’re seeing that there’s more doctors in hospitals than there are in these other practices. But that’s still a pretty slow rate of change. And so, yeah, the small practice is facing some change, but I guess the first thing it means, or it doesn’t mean, is that everything’s dying right now.

Scott: You know, “everything’s dying right now.” That statement in itself, it’s like, maybe medicine is changing. Maybe medicine is moving to larger groups. I don’t know. I don’t know the answer to that. I don’t think it’s the end of it all. I do think that lawyers, doctors, they’re, just in general, are…it’s an old school kind of setup. You get your degree, and every doctor I’ve ever talked to, they’re like, “Man, when we get out, we think we know everything, and then we quickly realize, like, we got a lot of learning to do, and we have a lot of practice.” That’s why they do call it a practice.

But the standard operating procedure was, hey, you get out, you get your shingle out, and…or you add a shingle to the other small practice, etc. Modern medicine’s changed a lot. I mean, I don’t think anybody ever would have guessed that a lot of general practitioners would be hospitalists. What’s a hospitalist? That’s like, there’s quite a few out there now, huh? I mean, that’s a specialty, and it’s I think a necessary one. So, what happens with orthopedic surgery, with neurosurgery? I think you’re going to get a mix. And I don’t think that’s necessarily a terrible thing, either. I don’t know how long it will take, Michael. That’s going to be the key thing.

Michael: Yeah. Well, you know, and this is some other topics we’ve got kind of like queued up in this conversation to go through, but it shows…so the default pattern is no longer to hang the shingle. That’s no longer the model that everybody’s going down, but you still do have those folks that are interested in having more control over how they want to run their practice, over the type of setup that they want to use, that they want to have more creativity. I think this has a lot of overlap with, like, other areas of just business and that sort of thing.

Scott: That’s right.

Michael: Do you go work for the large corporation? Do you go open your own small business? Do you go work with a small group? There’s a lot of varying degrees of just how much risk do you want to take on? What kind of rewards are you hoping to achieve through this? Because those rewards look drastically different in a hospital versus running your own practice kind of thing.

Scott: Yeah. There’s no doubt about that. Michael, it’s interesting that you mentioned, like, if you’re not a doc, right, and you finish college and you start looking at going to work, there’s so many different options out there. And it is not normal to go work at some three-person company. A lot of people getting out of school just go to work for the big company, whatever that is. And then as they start to learn more, they start to wonder whether or not they… I’m talking about those people who don’t have, like, “Oh, wow, my dad owns a small business, my mom owns a small business,” that kind of thing. But you go out to go work for the big company, and then you decide, wow, this is great for me. I love that I don’t have that risk. I love that I have a lot of other people teaching me. I love that I don’t have that much pressure on me, that much autonomy.

For me, it was the exact opposite. I wanted the autonomy, right. I wanted the chance to really grow my own business and do that. And so, I left large companies. I left, essentially, the Johnson & Johnson, Pfizer, and Strykers behind to form my own business, and I guess I have an entrepreneurial nature to myself. And so, that worked very well for me. And I think that there are a lot of doctors and surgeons that are graduating saying, “You know what, man, I’m not that entrepreneurial. I love orthopedic surgery. I love insert specialty, but I don’t know if I want to take on partners and all this other stuff. I just want to go to work and live a life.”

Michael: Yeah, and I’d clarify with there’s more than one form of entrepreneurialship for any physician. There’s certainly the folks that are helping design medical devices, and that are starting their own companies that they’re helping run outside of the practice, even. We’ve certainly come into contact with that quite a bit. So in all of this, there’s not one right path, right? There’s not, like, one wins and one doesn’t. We just simply happen to have experience with one more than the other. So in terms of, like, where we’re going with our conversation, the folks at the smaller practices, those mid-sized practices, those folks that are finding their way through all these changes, like, those are the folks that we interact with the most.

Scott: You’re right. We focus on the smaller, and a lot of this conversation, now that we’ve laid all this out of, man, is it all going to end? No, I don’t think so. Right? But you may have less of them. But if you’re going to survive in this, switching the conversation over a little bit, how the heck do you survive moving forward with a small practice? What do you need to do?

Michael: One of the first things you’ve got to look at is you’ve got to be looking at the referral sources for those physicians.

Scott: Couldn’t agree more. Yep.

Michael: And making sure that there’s enough diversity in that referral source process. So, when I talk about orthopedics, because that’s where we focus so much, how, Scott, do we…how do we see people diversifying enough?

Scott: It’s a really interesting question. So, let’s start with, if you want people to refer to you, as a small practice, you’ve got a couple of choices. You could be a one-person operation, so it’s like you do what you do. And I always ask them to, if they’re a one…they’re a solo practice, I always talk to those people and say, “Hey, you really need to be expert at a few things and focus on that.” And I think one of the big mistakes when you’re one or two people is, like, “We’re gonna do everything.” And it’s like, “I’m sure you will.” And there’s nothing wrong with that, and I’m sure you’ll take care of everybody who walks in the door, but if you had to sprinkle magic pixie dust, what do you really want to focus on? What makes sense for you? That’s a conversation we have all the time.

As the practice gets bigger in size, whether that’s 4 people or 6 people or 20 people, whatever, getting that diversified set of specialties in the building, so to speak, or buildings, starts to become more and more important. And in the past it was just like, “Hey, we’re three people that like each other, and this is what we happen to do, man.” And if you’re going to be in a town where you’re fighting these big behemoths, where that’s becoming more and more the norm, you better be a little bit more picky about how you pick, because you’ll help each other, right? So, if you have a…I’ll just make something up, a podiatrist, a sports medicine person, a total joint person, and an upper extremity, like, that’s a good spread. And you’re going to get a good group of referring physicians that bring patients to you. That’s part one.

And then part two, now that you brought them in the door, and this is critical, if you take good care of them… Very critical statement there. And I don’t mean, like, you just do good surgery. I mean, like, good customer care, good patient care. It’s not just about, wow, I made a great incision. It really is the bigger picture, everybody. You can get that…all of a sudden, that referral from, say, a podiatrist or the foot and ankle surgeon for a complex case becomes a lot bigger because that same person may have an arthritis issue, may have an upper extremity issue, or may have family members with said things, right? So it’s that conversation, where you have to be a little more strategic.

Michael: To kind of summarize that, this first thing of just making sure that you have enough specialties covered, that there’s enough there to want to refer over. I mean, we do, every once in a while, work with practices that are very remote, and it’s just, “Those are the doctors in the area. Are you gonna see the doctors in the area, or are you not going to see the doctors in the area?” But that’s becoming pretty rare, I mean, especially in the folks that we talk to. So, making sure that you’re being distinctive enough.

Michael: So, hey, if you’re just joining us today, this is the “Paradigm Shift of Healthcare.” I’m Michael Roberts, joined here by Scott Zeitzer. We’re talking through how the small practice survives today, and this is formed on the conversations that we have with a lot of practices that are continuing to thrive, that are continuing to make it. There are more physicians that are maybe considering that hospital path as a way to go through, but there are lots of opportunities for practices of all sizes to make it. But one of the first things is just making sure that you’re being clear enough with what you are, with what you do, and with what you provide.

And I think that some of these other things that we’ve got to talk about here, Scott, will help kind of illuminate what some of those other ways are that you can continue to diversify your referral sources. One being, like, are you crunching your information enough to see where those referrals are coming from? Not only do you just track with, like, Dr. Smith sent over five, but are you making sure that you understand where your highest margins are coming from? Who’s sending the most patients? And even, let’s throw in a curve ball there, like, how that’s changed since the pandemic started? All the different ways that that can affect patient referral patterns.

Scott: If you think that continuing to just simply see lots of patients and hoping for the best is going to work for you, I think you’re going to have a problem, right? So, that is the old school thing. And the sad thing is, I really do wish, just take a step back for a second, that instant…that the medical schools out there, and the fellowship programs and residency programs out there, would spend some basic time discussing this. It used to be almost pooh-poohed. Like, “Oh, we don’t talk about business here. We talk about taking care of patients.” And, sure, that your primary thing should be how to solve this particular fracture, how to solve this particular type of…how to do this particular type of procedure, etc.

But if you’re not also empowering your students with how to run a successful practice, then you’re hurting the patient, pure and simple. Like, I just wholeheartedly believe that. Patients with…who have, given good expectations, understand what’s going to happen, who are well-educated, just have better outcomes. And I think that that’s a big thing, but getting back to this whole thing about being able to crunch numbers and who’s giving you better margins, that’s important to realize. It shouldn’t be just this gut, of, “I really like Dr. Smith a lot.”

A good friend of mine once said that every time I got a referral from this particular rheumatoid specialist, I knew that I was going to get a total join. And I was like, “How do you know that?” And he goes, “Well, we had a really great…we have a really great relationship. We talk a lot about what to do before they even come to see me, so that by the time they are being referred to me, I’ve actually, in a way, kind of…I know who they are almost, because the rheumatologist has handled all the nonsurgical options, and they’re ready for that.” And so, working with your referring partners I think really helps tremendously. We brought up a little bit about diversifying just your subspecialties so that you get enough different people referring to, too, which is important.

Michael: Yeah. So, we’re talking about a lot of just, like, relationship-based kinds of interactions. Like, I know this doctor, I’m already familiar with some of these people. There are digital components to that as well. There’s just good communication online, making sure that you’re very clearly labeling what those subspecialties are, making sure that you’re very clearly stating, like, “This is how I can help.” Things to think about are, like, if a practice wants to refer to you, can they easily find the information that they need? One of the things to think about is, are you really clearly stating how to set up that referral process? Why pick you over all the other doctors in town? How are you making that process easier for them? Are you really getting into some of, like, “Hey, this is how and why I do the procedure this way.”

It’s one thing for another practice to know that you are a hip replacement surgeon, right? But it’s another thing to say, like, “This is how I actually do the hip replacement,” in a way that’s still friendly enough for patients to understand and it’s as comprehensible for patients, but what kind of reassurances are you putting out there that, “Yes, I can take care of this.” We’re very quickly getting into marketing land, but start thinking about all the patient reviews that you have, where they talk about, “This is the way that the doctor treat me, and this is the experience that I had afterwards.”

Scott: Yeah. Let me interject some stuff there. We’ve been listening to a lot of our current customers, and we always talk about marketing, marketing, marketing. And a lot of our customers will say, like, “I don’t do…I have a tremendous word-of-mouth, and I work with all of them, and I do some Facebook, and I work with all my referring physicians.” And I’m like, “That’s marketing.” You know, word of mouth is really important, and that’s never gonna go away. If you do a good job on a family member, more than likely, that family member is going to come visit you as well.

Marshall Steele, an orthopedic surgeon, and…developed an entire program that I think was bought out by Stryker many years ago… Actually, there’s an article in JOEI, the Journal of Orthopaedic Excellence and Innovation, where he kind of talks about having to go through his own surgery, and recounting how important it is to really do a good job of taking care of your patients. And if you do that, if you walk the walk and you talk the talk, you’ll get more patients. Online marketing can accelerate that, right?

So, for people who are listening in and thinking, like, “You know, I don’t know if that’s right for me, it’s like, because I already kind of do it, but I’m not sure.” It’s like, how you connect the dots with what you’re doing and getting the word out. It’s something that we focus on, Michael, all the time, and now, will be even more critical, if you’re, you know, in making that decision. Like, “I’m going to go small practice. I’m going to stick with this.” It’s like, “All right then. You better let people know you’re good at what you’re doing.” I mean, first, take good care. Again, I’ll go over it again and again. Like, the people answering the phone, the people who are walking the patients to the back of the room, etc., etc. I’m not just talking about that beautiful incision that you probably can do, and those wonderful chamfer cuts on a total knee replacement. I really am talking about the whole process. It’s important.

Michael: That concept of…and this is happening in all areas of business, but customer care, or patient care, is becoming what marketing is today, right? Like, all of these…in order for all of these things to work, they have to overlap. They have to blend together. They have to make sense. So, one other thing that I’ll throw out there, just around continuing to diversify, continuing to make sure you’ve got those opportunities. I think that practices, especially these small ones, have to find ways to set up some sort of outreach to potential referring practices. You know, what kinds of relationships can they establish? Like, there are some that, like, hey, yeah, you already know Dr. Smith and you’ve already got that set of referral, but what are you doing just to keep other practices informed? I mean, at the bare minimum, can you send them a brochure? Can you do something like that, just to say, “We exist, and here’s what we have here?”

Scott: Well, a couple things. You know, we started out the show talking about how the small practice, the volume of small practices is getting smaller. Okay. Well, that’s not just orthopedics or neuro, right? That’s across the board. And so, Michael, to your point, if all your eggs are in one basket, so to speak, so you, you know, “Hey, man, like, 80% of my referring patients come from these two or three people.” Well, if one or two of them get bought out, or decide to go to the hospital, wow, you just lost a big component of…you just lost a large stream of potential patients. And so, I go back to, like, if you want to control your own destiny, Michael, building your brand is so important. And your brand could be just as simple as, like, “Hi, I’m Dr. Smith and I’m good at what I do. And here’s…” And you walk the walk and you talk the talk. Like, that’s great. But there are other things like reputation marketing, reaching out and talking to referring physicians, getting the word out online. There’s a lot of different ways to do it, which, believe me, if everyone listening we’ll be more than happy to keep talking about it.

But this is the core. This is the crux of why am I doing all this? Like, why would I pay for this? Well, it’s to control your own destiny. I mean, Michael, if you don’t mind, you’re the marketing specialist, talk a little bit about what a brand means when you’re a surgeon.

Michael: Yeah, sure. So, you think about just kind of the term “brand” in general. And I think a lot of it does kind of overlap with reputation. One of the definitions I’ve heard, and I, of course, can’t attribute it at the moment, because I don’t remember. It’s that source of, like, “Hey, a brand is what people say about you when you’re not in the room.” And if you’re thinking about that in terms of a surgeon, some patients are going to say, like, “Hey, the particular way that this surgeon operates is above and beyond everybody else.” And that’s going to be one thing that a group of people will say. And then, there’ll be a group of people that go, like, “This surgeon was nice, and I felt like I was heard.” And you think about how different that experience is, and what a difference that brand means between different types of patients.

Like, yes, you’re still going to be the same doctor. Yes, you’re still going to be doing the same kind of thing, and you’re still gonna be treating people the same way. But that experience that these different groups of patients are going to take from that are going to differ very drastically. So, being able to be aware of all those components, and being aware to highlight the different components that need to be the main point. I mean, we’ve worked with some surgeons where we’ve focused on the fact that they care, because that’s what their patients said over and over and over. And it was just so very evident that this doctor was in tune with their patients, and hey, had great surgical record, and all the patients could talk about how great they felt after, and all of those kinds of things. But for a lot of that… I think we’re both thinking of the same surgeon. Like, for a lot of that person’s patients, the outcome was almost secondary to being valued as a person, being treated with respect, really feeling safe, and that whole experience.

Scott: I think we’re both…I’m thinking it’s Dr. Craig Greene up in Baton Rouge.

Michael: Yeah.

Scott: We were working with him, and he wanted to have a video to talk a little bit of… Like, we suggested a video would be a good idea. And he thought of this couple that he had taken care of. I forgot the specifics, but both were fine. So, they were done. That’s what I love about… I know a lot of orthopods love the fact that they can fix people and they’re done. So, there was no reason for these people to drive, I believe, like, an hour or an hour and a half, back to his office, to basically say, “Thanks for taking good care of me, doc. And it’s great to see you.” And that’s Dr. Craig Greene, Baton Rouge. And he’s a great guy. And that really does say a lot about walking the walk while he’s talking the talk, right. He really does do that.

And reputation marketing can be a big help for that, but that brand statement of, like, what do people say about you when you’re not in the room? That’s a good one for everybody to kind of take away. I think it’s very critical that you always try to have a very open and honest look at yourself and your group. Because I’ll say this over and over. When we do reputation marketing, I get…and I’m reading about stuff. It’s very rare. You might get stuff like, “Wow, the surgeon was late.” But most of the time, it’s just about how long it took to get an appointment, how long it took to wait for a particular procedure, how difficult the billing person was, blah, blah, blah. But that blah, blah, blah is important.

I have a friend of mine who wanted to go see, I think it was an endocrinologist, and a particular thing that that person had an issue with, and knew that the endocrinologist, I don’t know, it was 15 miles away, was supposedly the “best.” But that person looked up information online and saw, like, on average, people wait three hours to be seen and blah, blah, blah. And you’re going, “Whoa.” And that person ended up going somewhere else, because I don’t care how good they are. I don’t want to wait three hours. And I’m kind of curious, does the person, the endocrinologist, realize that that’s happening? Because the first question we always get when it comes to reputation marketing is like, “What if somebody says something bad about me? What do I do? How do I get rid of it?” And I’m like, “Well, first of all, there are things that you can do, but you can also just listen.”

Michael: Look to get better. I used to work in hospitality, and there was a hotel, we were trying to help them do that. And so, we were trying to say, like, “Hey this is the feedback we’re getting.” “Well, okay. Say we’re sorry.” It’s like, that doesn’t get you anywhere.

Scott: You’re not going to get better.

Michael: You’re missing the point. You’re missing the point. So listen, we’re at time today. Couple things that we definitely hit, so, let’s recap real quick. There’s definitely a slight shift that’s happening, more physicians moving to hospitals. It’s below 50% for the first time. Obviously, if you’re going to stick that path, keeping the small practice, keeping the independent practice, you need to have a diverse enough set of referral sources. There are a number of ways you can accomplish that.

Everybody, always, thank you for joining us on the show. If you’d like to learn more, please feel free to visit our website at p3practicemarketing.com. We have a resource called “The Paradigm Shift of Healthcare for Ortho Practices,” and it’s specifically featured towards this set of practices that we get to work with, features a lot of interviews, a lot of things that we’ve learned from working with orthopedic surgeons.

Until next time, always, thank you so much, and have a great week.

Announcer: Thanks again for tuning in to “The Paradigm Shift of Healthcare.” This program is brought to you by Health Connective, custom marketing solutions for MedTech and pharma. Subscribe on Apple Podcasts, Google Play, or anywhere you listen to podcasts.