Episode 88: How the Small Practice Can Survive Today, Pt. 2

In this second of a two-part series, Michael and Scott continue discussing keys for the small practice to survive. Although there has been a slight shift towards more physicians working at hospitals, that doesn’t necessarily spell the doom of small practices. Learn how to consider your practice’s specialty mix, the use of virtual visits, and how entrepreneurial physicians might be the key to independent practices thriving in the future.

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Full Transcript

Announcer: It’s time to think differently about health care, 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 health care 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 health care 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 health care is changing and how the consumerization of health care is affecting practices. 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 running part two of our conversation about how small practices can survive today. This was a conversation that we got started into, and just realize we had a whole lot more to talk about than we could possibly cover in a single episode. So, you know, before we kinda really dig into the rest of the ways that small practices can survive, Scott, we were actually wanting to jump into, like, a topic that we had touched on last week, which was physician brands and what that means with small practices. And you even had a note about, like, “Hey, let’s say that that physician moves from a small practice to a hospital. What happens to the brand at that point?”

Scott: Right. And so, to remind everybody, that real big takeaway is, you know, if you want a good, simplistic definition of brand, Michael, you had brought up, it’s basically what they say about you when you’re not in the room, which is a great definition. We’ll have to figure out where that came from so that we can have the right person on the back, you know, about that. But I can’t tell you how many times I have talked to a surgeon, who’s one of our customers, happy, and says, “You know what, I’m getting brought up by a hospital. I’m tired, you know, fighting the fight, and I’m gonna go work for a hospital. I’m really excited about it because, you know,” whatever, there are a variety of reasons. “I’m irritated about my own practice. I’m excited about working less. I’m getting older. I don’t wanna make every decision.” All good reasons. And I always tell those docs, “Hey, protect your brand.” When you’re talking and negotiating with the hospital, let the hospital know you’d like to keep your website.” Usually, it’s not gonna stop anybody.

Now, a lot of surgeons listening may go, “Why the heck would I wanna pay for that, you know?” And it’s like insurance, man. It’s not…we charge a whopping $150 a month to our current customers who are on our platform for hosting a site, access to the content management system, patient, and etc., etc. But just as important of all that is, like, you’re protecting your brand, who you are, what you’re about, what they’re saying about you when you’re not in the room. And whatever that cost is, hey, maybe you can get the hospital to pay for it. Maybe you can’t. I don’t know. But even if you can’t get the hospital to pay for it, give it strong consideration. Because if a few years from now, you know, you’re kinda going like, “This is not cool, man. I don’t like this,” for whatever reason, there could be a million reasons, it’s easier to make that transition back into private practice. I couldn’t get that out, Michael, because, you know, our time was running out. I went, “Oh, that’s important.”

Michael: Absolutely. And just to give the attribution, Jeff Bezos, apparently, was the person that said that. So, you know.

Scott: I’m glad we’re given the right, you know, kind of back there.

Michael: I think we have to, like…

Scott: I don’t want Jeff and company, and maybe he’ll get a slot for you.

Michael: I think I have to pay a dollar just to bring that quote up. I’m not sure how that works exactly, but what’s the licensing [inaudible 00:03:55]?

Scott: All right. All the power to Mr. Bezos. I do wanna talk a little bit about consolidation, and there is a very long quote that, Michael, I’ll need you to help me with. But it’s in “Orthopedics Today,” and it’s, “Pandemic changes in health care spur practice consolidation,” and there is a key quote from the article. Michael, would you help me with that? Because I cannot consolidate said quote. It’s too long. It’s too long, I can’t read that.

Michael: So basically, they spoke to a whole bunch of different people, and the people that they spoke to came back and said, “Hey, even though there was some different, like, forms of aid that came to practices, you know, the economic effects of the pandemic,” so picking up with the quote kind of midway through here, “the economic effects of the pandemic along with the increased pressures of added regulatory requirements, cost of doing business, challenges of working with hospitals, and a decrease in overall reimbursement may cause struggling orthopedic practices to merge or consolidate with more financially stable practices and systems.” So all of that being said, there’s a whole bunch of changes and pressures on practices, and they may have to consolidate in order to weather all those changes.

Scott: Yeah. And thank you for doing that for me because I think I would have gotten lost somewhere in the middle and, you know, been off, having another cup of coffee. I will say this, you know, the pandemic really exacerbated whatever economic issues you were having, good and bad, by the way. But if you were having some tough times with referrals or whatever, right, the pandemic really exacerbated that. That’s definitely…I don’t know if anybody would argue with me about that. And so, now, you come out on the other side of this pandemic, and you’re kinda going, like, “Man, you know, what are we gonna do about that?” And a lot of people made the decision to say, like, “You know what, I’m tired.” Again, I go back to that, “I’m really tired. I don’t want any more autonomy. Please, tell me what to do.” I will give the same advice of, like, “You may feel that way this year, but you may not in five years. Protect your brand.”

But there’s gonna be a lot of change, Michael, because of that. Like, you know, telehealth in orthopedics, to bring up this one specific thing, was essentially a non-issue in orthopedics. Like, people were talking about it, but it was mostly like, yeah, maybe one day, or you’d get some hot wires. But that is not the case anymore when it comes to telehealth, especially during the pandemic. And I kinda wanted to talk to you a little bit about that, Michael. What do you think? Do you think that orthopedic practices will start incorporating telehealth as a standard of care?

Michael: It’s interesting because this is actually a conversation I ended up having on Twitter, you know, the great news source of all news sources. We got into some conversation last week, and I was just asking people, like, “Hey, like, if you were to talk to a practice right now, what would you recommend?” Judith Lindsay, shout-out to Judith Lindsay, she jumped in now and was talking about, basically, not just hacking telehealth on as something to say, like, “Yeah, I did it,” and there it is, but there’s a whole, like, process that you can look into with those, where you can actually be very strategic around how you’re administering care.

It’s not just, like…again, it’s not just a check, “I did it,” but actually a more fully formed model of virtual care. It’s not just, like, “Yes, I got telehealth,” but no, like, this is, “What are all the different steps that lead up to an appointment? What are all the different things that people need to know, you know, with online communication with your patients?” All of those different components go into this. And then, yeah, I do think that telehealth and that part of the experience can be very useful for ortho, even, specifically. So again, to continue on with that same conversation we had last week…

Scott: Go ahead.

Michael: …Judith pointed me to Mark Milligan, who does a lot of work with PT and with ortho, and he was talking about…I had reached out to him and said, like, “How do you deal with some of that, like, reluctance in orthopedics towards telehealth?” He brought up a couple of points saying, like, he sees resistance if an orthopedic surgeon reviews it as a revenue competition, but if there’s a chance to increase patient value, or outcomes, or on bundled payment models, it can be really successful. And so, like, I think there’s a really great sense of perspective, you know. Like, one of the things that I think that we talked about quite a bit throughout last year was orthopedic surgeons can’t do surgery through telehealth visits.

Scott: Well, I don’t think so.

Michael: So are they losing their money, are they…you know, all those kinds of things. But if it’s a part of the whole care, if you’re kind of, like, thinking through that whole process, yeah, it affords a lot of advantages, but it can’t be this kind of either/or mentality.

Scott: You’re all gonna have to take a step back and figure out how to weave it into your practice and answer a lot of why questions, like, you know, starting with, “Why would I use telehealth?” And I think when COVID hit, I had no other way to, you know, take care of some of my patients, and so it was just almost required. And now that it’s gone, I’ve seen a little bit of both. I’ve seen a lot of orthopods basically saying, “Whew, now I don’t have to do telehealth anymore.” Okay, cool.

You know, that’s fine. But I’m also seeing a lot of orthopods who got feedback from patients who are, like, “You know what, you did a great surgery on me, and I feel great. And do I really need to come in so that you can marvel at your incision?” I don’t think they say it that way. I had surgery during COVID. Lucky me. I fractured my wrist and required some expert orthopedic care. Thank you, Dr. Claude Williams, down in New Orleans, Louisiana, who operated on my hand. And, yeah, I got operated on, and he did a great job. And, you know, the first time I came in, I really did need to go in. They needed to, you know, remove some bandages, etc., etc.

You know, I was kinda nervous, make sure it was all working right. But you know, some of those extra follow-up visits, you know, basically, part of it certainly was needed. Like, you’re not gonna be able to take an x-ray remotely. Not happening. But did I need an x-ray every single time? Probably not. Could they have saved some time, still billed correctly? Like you said, weaving into bundled payments and all the other stuff, everybody needs to get reimbursed, I strongly believe that. But at the same time, could time for both the surgeon as well as for the patient been better managed? And, yeah. You know, I think telehealth definitely has a place. And you brought up the PT part of things. That’s another excellent place where, you know, a lot of times, you’re going for PT and it’s really important that you’re there, for obvious reasons. Like, you know, you really need to bring, you know, your arm this way, etc. But there are a lot of other times where it’s, like, you know, you could really just have a telehealth conversation and make sure that things are progressing fine.

Michael: Absolutely.

Scott: So it is about weaving it in correctly, and I do think, for orthopedics, again, how you weave it in would be the critical win.

Michael: Just looking at an “Orthopedics Today” article that we pulled in as a source for this, like, article, “Is the virtual orthopedic visit here to stay after the COVID-19 pandemic?” In a lot of ways, with the world opening back up, where it might make sense, and, you know, you’re talking about some of these, like, kind of post-surgical appointments, that sort of stuff. Also, you know, they’re really highlighting that if you have a good relationship already established with a patient, that’s, again, a further indicator that this could be a good fit, look for that opportunity to really make it easier on both sides of the equation. So, again, just, it’s not gonna be for everybody and for every appointment. It’s not the, like, either/or scenario here. You do have to think through how that fits.

Okay. So telehealth is definitely a possibility, we think. In our opinion, it’s certainly a possibility. But in terms of, again, how that small practice survives today, how it can thrive going forward, you know, it’s not something of, “Oh, well, we just couldn’t get bigger, so I guess we just have to stay here, and [inaudible 00:11:42], you know, we made it.” But again, the “freedom” that a practice allows, and you know, freedom in quotes because, like, yeah, they are longer days. You are running your own business. You have a lot more decisions to make. But you do have the freedom to make those decisions.

If you’re just joining us, I’m Michael Roberts here today with my co-host, Scott Zeitzer. We’re talking about the paradigm shift of healthcare, all the different ways that health care is becoming more consumerized and how the practice is dealing with those changes. So far, we’ve been talking some about consolidation. We’ve been talking about telehealth. And let’s talk about the entrepreneurial physician. You know, for the independent practice going forward, the entrepreneurial physician may be the one type of physician that can run that kind of practice, you know. So in different conversations that we’ve had with practices over the years, we get the chance to really learn about what an entrepreneurial physician looks like, you know. So I’d be interested to hear some of, you know, some of the traits that, I guess, come to mind for you, Scott, when you start thinking about who those entrepreneurial physicians are.

Scott: Yeah. You know, essentially, you know, we’ve got…I don’t know how many people on our platform. It’s a joke that runs between Michael and me, where I’ll say, “Oh, we have like close to 1,000 physicians, surgeons on the platform,” and Michael would go, like, “How do you have that number?” And I’m like, “I don’t know. It’s a rough count, man, you know. We got this many practices, I multiplied it by this number, and I got to that number.” And Michael just kind of shakes his head, he’s like, “One of these days, we have to count.” But I’ll just leave it with we have a lot. And there’s a subset of those surgeons that we talk to on a regular basis where they’re asking a lot of really good questions that have a lot more to do with, then, “Are you telling people that I do a total joint?” you know, that kind of thing. They’re thinking about their practice mix. They’re talking about how to get the word out about how they’re doing, what types of procedures they’re doing, how to expand their practice reach, so to speak, that could be, like, by getting the word out in the same geographic area or spreading it out. It’s not just that they’re willing to spend money, say, on an ad campaign. I mean, great.

You know, I guess that is entrepreneurial, because you’re spending money, right, on marketing or an ad campaign. But it’s the kind of questions that lead up to the need to do so, I think, really of a ton of things, which does get back to, like, “What kind of procedures do I really wanna focus on? How do I tell people about those specific procedures that they have good expectations?” There’s a real concern from those surgeons about how they are perceived, not just them but their practice as a whole. There was a surgeon I worked with, and we did almost like a secret shopper. We made some phone calls, and those phone calls were made during lunch. Now, if a lot of practices out there just don’t answer the phone during lunch, they basically just assume you’re gonna call back, you know, because why wouldn’t they call back? And you know, we joke, like, if you’re the only practice in a rural area, like, it’s cool. You’re gonna call back. That’s it, man. Right? But if you’re one of four practices in the area, I don’t know. I probably would call the next practice. Like, I have lunch off. I work for a living. I have to make another phone call.

But, cool. Some practices allowed you to leave a message. Some did not, by the way. And then when the practice called back, the person who left the message on purpose didn’t answer the call. They wanted to see if the practice would call back again. And by the way, the answer was zero times for a lot of practices. They were like, “Check, I called them back. That’s up to them now.” And it’s like, “Look, man, I get it. You’re very busy.” But if that’s your standard operating procedure, imagine how many, you know, potential patients fell through the cracks, went somewhere else, who had private insurance and wasn’t gonna accept that type of care, patient care, customer service care, excuse me. I think there’s a lot to be said for that. And those people that I talk to, you can tell from that conversation how they’re thinking a lot more than just about the surgery that’s coming up.

Michael: Yeah, for sure.

Scott: I’ve talked about that too, man. There’s been talk about that.

Michael: Yeah. It’s interesting just getting this on in as many conversations as I have in the time that we’ve worked together, you know. Like, hearing people talk about, “Hey, we’re making sure that we’re putting maybe physical therapy in here. We’re making sure that we can do x-rays in our practice.” They’re taking some risk in what they’re spending, again, just on what kind of patient care they can offer, you know. We wanna make it easier for the patient to be able to come back for physical therapy. We wanna be able to do the x-rays here. Maybe they’re investing in an ASC, you know, ambulatory surgical centers. Like, they’re investing in ways that maybe other practices aren’t. They’re taking more chances with those kinds of investments, because all these investments are, right, to a degree, they’re gonna be a risk.

And so they’re doing these things to provide better patient care, to provide more opportunities, to be able to take care of that patient, and bill that patient, and do these kinds of things. I mean, that, when run correctly, can mean a more profitable practice. That’s how these practices can make more money. So the whole concept of that more holistic thinking of being able to see all the things that a patient needs, telehealth or when we’re talking about, like, having a more, like, integrated virtual care kind of thing to where it’s not just, “Hey, maybe they’ll answer the phone or maybe they won’t.” You know, I think the only thing more discouraging than constantly going to voicemail is getting that “The voicemail is full” message, because you know…

Scott: Oh, my gosh, yes.

Michael: Well, I think if the voicemail is full, like, obviously, they already are bad at this, and I am never gonna get a callback ever, ever.

Scott: Yeah. You know, it’s funny. There are a lot of telltale signs. I always tell every surgeon that we work with, “Call your practice and see how they answer the phone.” Don’t call the backline, the special backline that they can…you know, so they don’t have to wait for anybody. No, no. Call your own practice. How long does it take to go speak to a human? You know, that kind of conversation. I always…this is a true story. It was like over a decade, and I cannot remember the sports medicine person who reached out to me. I didn’t know the person very well. It was a friend of someone that we do some marketing for, and they were complaining that they weren’t picking up cases. Young orthopod just out and doing the standard build business by, you know, living in the ER. He was a sports medicine fellow, and he just couldn’t figure out for the life of him why he wasn’t getting more sports medicine cases. And as he’s running out the door for one of those cases, he hears the front desk say to the prospective patient, “Sir, as I’ve told you before, we don’t do sports medicine. We’re orthopedic surgeons.” And everyone thought, listening to this conversation, thought, “No!”

You know, yeah, that actually happened. The entrepreneur is going to hear that story and not shake their head and go, “I gotta get out of this business,” right? Because I get it, man. Like, if you don’t wanna deal with that, maybe the hospital is a better place or the mega-group. Nothing wrong with that. I’m not saying like, “Oh, you’re weak.” Not at all. It’s just how you’re wired, man. If you don’t wanna deal with that, there’s nothing wrong with saying, “I don’t wanna deal with that.” That being said, the entrepreneurs that we talk to hear that, and there’s one, in particular, that we were talking to, and the surgeon said, “Wow, that’s just great opportunity, man. Because if you can just train those people to answer the phone better, imagine how many more patients we’re gonna get before the other guys.” And I was like, “Yeah, that’s an entrepreneur.”

Michael: Yeah, yeah.

Scott: Right? I think you have to be a stubborn optimist to be an entrepreneur. There’s no doubt about that, Mike.

Michael: So we’ve had the chance to talk with larger groups about these kinds of things, and we’re talking to, like, the administrator, and the marketing manager, and maybe the CFO for the group, you know, and you think about, like, the groups that are large enough to have that depth of resources, they can focus on that. Like, that can be the thing that they look at all the time, you know.

Scott: Without a doubt.

Michael: So there’s definitely, like, a very real challenge for the small practice entrepreneur that’s trying to figure out how to make that happen and actually see patients at the same time. So, like, there’s a huge, huge commitment that that physician is making, and we definitely appreciate that and are acknowledging it.

Scott: Without a doubt. You know, as you’re saying that, I’m thinking of my own business, you know. We’ve got 15 people that work, you know, at our company, but we also outsource a lot as well, because there’s a lot of niche things that we need to get done. There’s no way I’m gonna hire a full-time person to do that, but there’s really expert people who do that. And I think, for those small practices, without a doubt, you know, how many times have we been on the phone, Michael, with the office manager who is also the head of marketing, and the head of patient care, and the head of taking care of the doctor, and keep going, right?

Michael: Right.

Scott: Responsible for understanding the EMR, like, that’s an easy job in and of itself. And it’s like, yeah, that’s…I go back to stubborn optimist mode, right? So on the one hand, you go, like, “I’ll never get anything done, because I just don’t have enough resources to focus on these things.” And you know, my advice about that is, like, that’s how we’ve made a living over the years. It’s, like, yeah, of course, you don’t have a full-time marketing person. You’re gonna hire us and the whole team to do your marketing for you, and we’re gonna explain why we do what we do, and how we do it, and why we’re expert at it. You’re gonna pay us X, and you know, if we do our job right, you’re gonna make 2X or 3X, and here are the case studies to prove that we’re saying that right. Well, it’s not just for, say, marketing.

There’s a lot of other areas where, you know, that kind of outsourcing might be helpful to the small practice. It’s worked well for us, it works quite well for lots of other companies. It’s how some of these small businesses exist. They’re helping each other out. You know, a lot of small businesses used to make money off of other small businesses.

Michael: Yeah, for sure, for sure. The different things that we’ve talked about, some of these different models, I mean, like, we work with some practices, you know, and even as a small practice size, if they’re going through a merger with somebody else, they’re still going to be a small practice even after that, you know, consolidation has happened. If a group of eight and a group of three get together, they’re still a pretty small practice. So, I mean, I think that this is definitely a time where people have to be very creative about how they’re going to make this kind of stuff work. Like, I think it’s very easy to get into, like, an either/or mentality. I’m independent and so I’m never gonna be a part of a large group. So we always have to stay small. And so that’s how it’ll always be. And that can be very dangerous to a practice. I mean, you can kinda hurt yourself over and over there because you’re just not willing to take those chances.

Scott: I agree. Conceptually, everybody thinks it’s better when it’s larger. “Oh, you know, if only we had more docs, you know, it’d be easier. We could hire more people.” And it’s like, maybe, but I go back to the outsource model for the smaller, and as you get larger, you know, Michael, we’ve dealt with a lot of what I’ll call larger small practices, where there’s 10 or 12 people in the group or even more, where you would think they’d have all that stuff worked out, but because they grew so fast, they couldn’t keep up with their growth. And it was quite the mess, you know, to deal with that, and we had to fly in, and we were walking them through how to kind of, you know, untangle all of that. And it was some heavy lifting. And so it is about finding that right balance when it comes to getting things done.

I remember, when COVID hit, I was talking to a good friend of mine, an orthopedic surgeon, Dr. Kirschenbaum, and this was right when COVID was getting started. And he said, “You know,” this was just his opinion, he said, “You know, the smaller practices are gonna deal better with all these horrible changes that they’re gonna have to deal with.” And I said, “Why do you say that?” And he said, “Because it’s gonna be three guys at a dinner table basically saying, ‘All right, what are we gonna do? You know, we’re either gonna suck it up and, you know, pay the office manager and the two nurses, and we’re just gonna make less or not. You know, we’re gonna have to make a decision about that.’ And that would have been handled over a bottle of wine and some steak.” He was, of course, joking a little bit. But I get it. You know, it’s less people.

And he said, “Man, the practice with, like, you know, 50 or 60, that’ll be a little bit easier too, because they’ll have a CFO.” The CFO will just come out and go, “Hey, man, this is what you’re gonna do, you know. I’ve worked out the numbers, and here’s what we’re gonna do, here’s how it’s gonna work, and you know, that’s great.” And you know, if you were an orthopedic surgeon at a hospital, same setup, you know. The hospital would come back and go, “Here’s what we’re doing.” But I did find out, like, he was right. He said, you know, “The practices with about eight people in them, that was gonna be harder, because, you know, it’s harder to get consensus among eight people,” let alone eight orthopedic surgeons. And I say that with love. And that’s something in itself.

And you know, I think of that statement about, you know, eight surgeons in a group and getting consensus of how you do that. That’s a topic we could talk about on a separate conversation, Michael. I think we have, like, a whole topic of, like, you know, how do you work in an 8 to 12-person practice? Like, do you form little subgroups, you know? I’m joking. Yes, you do. I think that would be a conversation in itself, and it goes back to this, like, that balance. Like, what is required from a balance perspective? To be entrepreneurial, you gotta wanna be entrepreneurial. You gotta have this stubborn optimism. You gotta listen well. And apparently, in my case, you have to talk a lot. I mean, that’s just me.

Michael: Yeah. And in wrapping up these thoughts, you know, like, we talked some about, like, this past… [inaudible 00:26:36] end the day, you know, looking at specialty mix, making sure that there’s enough diversity there, using new technology, using telehealth visits but in the context of a whole virtual care, not just slap it on and say, “Okay, now we’re done with that.” And then, you know, it may be the entrepreneurial practices that last as the independent practices going forward. So there’s a lot to consider. It’d be interesting to see how this continues to develop. It is easy to get the kind of Chicken Little mentality, “The sky is falling. Oh, no,” you know. Like, small practices are disappearing. We don’t think that’s the case, but it is gonna have a lot of change coming up.

So you know, as always, thank you for joining us today. We have these kinds of conversations all the time over at p3practicemarketing.com. We’d love to talk to you more about that. Until next time we get to talk. Have a great week. Thanks so much.

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 med tech and pharma. Subscribe on Apple Podcasts, Google Play, or anywhere you listen to podcasts.