The health care system is changing and Direct Primary Care Doctors (DPC) are looking for advice on how to create and maintain a profitable practice. In this episode we talk about creating profitable Direct Primary Care practices.Ready to find more profit currently in your business?
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Chris:
Welcome back everybody. It's another episode of Pursuit of Profit. I'm your co-host, Chris Angel here with the nations Profit Coach and financial planner Leanne Ozaine-Smith. Hello Leanne.
Chris:
So in this episode we're talking about, I'll let Leanne kind of give some backstory and why we are talking about th is subject. Today we're talking about profitable Direct Primary Care doctors or the DPC, as they say in the industry.
Leanne:
Yeah. And our listeners are probably like, "What the heck? Why are you talking to us about this?" This maybe has nothing to do with entrepreneurship at first blush, but I hope that everybody's going to see that it has everything to do with entrepreneurship. Especially because getting health insurance is such a challenge for self-employed people! This episode is perfect for any physician who is considering walking away from traditional big-health-systems and wanting to get out of that hell-hole.
Chris:
So even if you're not a Direct Primary Care doc, this episode will apply to you. We will distill the lesson down.
Leanne:
You're going to get it. I promise! Plus I actually did a post on Facebook about it when I was at this conference that I'm about to tell you about and I can't believe how many of the Pursuit of Profit fans actually came to me and were just like, "Can I learn more? How do I learn more? Can you give me resources?"
Leanne:
So we decided that we're going to go a little bit deeper on what I talked about on Facebook, but really this is about entrepreneurship and being profitable. So let me tell you the story.
Leanne:
So I'm a Profit Coach, duh. Typically Profit Coaching is just three months. I kind of have this joke where I'm like, "I am not interested in being part of your business for the rest of your life."
Leanne:
And so usually it's this three month thing and then I graduate you out. And then if you get stuck or if you're trying to make a big financial decision, then we do a tuneup meeting and then every year before you file your taxes, then we do a tax time roundup so that you don't get screwed. And your CPA doesn't forget to do something. So we do that.
Chris:
Love it.
Leanne:
So it's usually three months and one or two extra meetings. It's really all it is in my practice. However, I have a medpreneur client, that's what I call her. So she's a doctor! And this particular woman sees me as her virtual CFO. She's never said that but she treats me that way. So it's basically like I'm on retainer and I've been helping her for over a year. Chris, you know me well. That is a really long, long time to be coaching one person, right?
Chris:
Mm-hmm (affirmative).
Leanne:
She hired me because she is buying another non-traditional practice. And what she said to me was, "Hey listen, you're my smarts for hire. I went to medical school, I know how to do medicine. I don't know anything about business. I don't know anything about money, and I don't want to make a mistake." So I've been part of this process with these 2 doctors for over a year. Doctor 1 wants to sell and retire, and Doctor 2 is my client. She wants to buy .
Leanne:
So "we've "done it all. "We've" been creating the revenue model, "we've" crunched numbers. "We" being ME.
Chris:
Me, myself and I.
Leanne:
We've been doing projections, we've been talking to bankers, we've been talking to lawyers and it's been culminating into this transaction, where she buys his practice, and I've made sure that she's going to be profitable even with a business loan and everything.
Leanne:
The reason I say all this is, is to explain that I had a meeting with her about two months ago, she sits down with me and says, "I am going to try to talk you into going to a conference with me."
New Speaker:
I was like, "Nope, I am not interested in going to a medical conference. No way Jose!" She promised me that it wouldn't be about medicine. All the while I'm like, "Right. I'm still not going to a medical conference."
Leanne:
The long and the short of it is, she talked me into it! (laughter) She won me over by saying, "Listen, I need you to go to this thing and learn about this crazy business model that's happening in medicine so you can help me implement it." And so my "no" turned into a reluctant yes. So I boarded a plane last Thursday, I flew to Indianapolis with her. I'm crazy!
Chris:
Right, but clearly committed to your Clients!
New Speaker:
Chris, I didn't know what I was walking into. I didn't. And based off of the response I got on Facebook, people didn't know what I didn't know either. It's just this quiet revolution that's happening in medicine and it's called Direct Primary Care.
New Speaker:
I got to be the only non-medical person in the whole room. I was with 500 doctors and learned all about the inside stuff nobody really hears about what it's like to be a Doctor these days and the BUSINESS of being an independent doctor--more importantly, the business of being a client of an independent doctor.
Leanne:
Basically the gist of it is the Direct Primary Care movement is happening because there is a crisis that's happening in healthcare with family doctors. We're going to just geek out for one second so we can get to the point. So hang in there with me.
New Speaker:
There's a crisis happening with family medical doctors; this is clearly seen by the fact that our family docs aren't even doctors anymore. They are nurse practitioners, PAs, etc.
New Speaker:
When we were kids the HMO movement started to happen. A health-system appointed a primary care doctor for a patient, and then that PCP became the referral source to all these other specialties. This was done so that the health system could eliminate risk, be more profitable, pay fewer claims, etc. Obviously, this was spun as better health care for patients, but we all know that's absolutely untrue. PCPs are gatekeepers; we all know it.
Leanne:
These Docs, who go to school for 12 years and want to practice medicine aren't particularly thrilled with just basically working in a booth ,seeing 18 patients a day, and writing prescriptions all day long. They don't feel like they are actually practicing medicine. The sentiment I picked up was, "All we're doing is referring people out and away." And they get paid about $125,000 dollars a year, to be a prescription filler.
New Speaker:
I heard stories that I, as a patient, I can identify with, like, "How can I possibly diagnose, heal, care for people when the medical assistants are knocking on the door when I've been with a patient for a mere 6 minutes?"
Leanne:
So these doctors talked for days about big medicine, and how awful it is to work there. They feel trapped. They've decided they want to take back their life, and they don't want to be enslaved to big pharma, big medicine, and insurance companies dictating the care they provide. Enslaved is a strong word, but that's the feeling that they have. So they are stepping away in masses and there are not enough family medicine doctors left to meet the demand!
Leanne:
The Direct Primary Care movement is basically where a doctor sets up a practice. And that practice is not the same as concierge medicine, which is for the elite and the rich, but just a regular old practice. And what they do is they charge their patients a flat rate every month. So they charge about $60 to $80 bucks a month depending on the area that you live in. And you then see that doctor and you get real care. The doctor splinter, does your stitches for you, delivers your babies for you all for a flat rate. And then they dispense medicine at cost. It took me three days to even get my brain around it. So it was totally amazing.
Leanne:
And doctors are getting their life back and they're doing real medicine again and they love it. So the reason I talk about this and the reason I posted this on Facebook and Instagram is I wanted to kind of bring awareness to it, but I didn't, I fell into it. My client dragged me kicking and screaming to this conference. Right?
Chris:
Right, right.
Leanne:
But here's the point. The point is that I've spent 15 years working with entrepreneurs and I sat there for three days and listened to physicians, right? And just for a second, let's think about what the stereotypes about physicians are, right? The stereotypes are, they're rich, they're money hungry. Stereotypes are, they don't care. They're just trying to get onto the next patient so they can bill. There's some stereotypes around them. What I really saw in this particular movement is that they are people who hate their job.
Leanne:
They hate their job, they hate everything about where they're working. They hate billing, coding, administration. That is not why they went to medical school. They hate the environment that they work in. They feel like it's hostile, their coworkers are awful. There's this weird tension between doctors and nurses and this weird tension between insurance companies and doctors. So they hate the environment, right? And they feel stuck in the environment.
Leanne:
And they want out so badly, so badly that they are willing to take a risk. And that risk is that they are going to leave institutional medicine and go and start a business. And when they go start a business, they have to do things like replace their paycheck and figure out how to do that. They have to figure out how to replace their medical insurance themselves, their retirement plan, all of the benefits that they have. They have to know that they can do that because they have six figure student loans, right?
Chris:
Right. Yeah, big time.
Leanne:
More student loan than anyone. And so as I sat there, I was just like, "These people are just like every other entrepreneur that I have ever seen." Everything that you are describing from stage for three days is exactly the entrepreneurial thing. People start businesses because they want to do what they want to do with their life, right?
Chris:
Right.
Leanne:
And they want to find a way to replace their former paycheck. Or I did a session today, a coaching session with somebody today who's like, "I was tired of my income being capped. I wanted my income to have no limit." Right?
Chris:
Right.
Leanne:
So I had to walk away from a traditional six figure job to get that done. So the point of all this is I was like, "This is exactly the entrepreneurial thing." These doctors are doing something that's really disruptive actually in the medical community and really serves people well. But they have the same problems that every other entrepreneur has, which is how do I replace my paycheck? What do I do about taxes? How do I fund my retirement account? Should I even be thinking about any of that? How do I pay for employees? What is my overhead? Dah, dah, dah, dah, dah. We could keep going. Right?
Chris:
Right, right.
Leanne:
And so I just had this like, "Oh, wow!" But here's what's different. What's different is they... I can do this. I'm actually a little nervous because I'm afraid of sounding judgemental. But what I observed is they know what they don't know. So when I think about the number, and you can please chime in on this too, the number of conferences I've spoken at, the number of webinars that I've done. Then as a rule, I would say that entrepreneurs start businesses and they jump and they don't really think about the important stuff of business. Like how am I going to pay my bills? How am I going to scale? How am I going to grow?
Leanne:
They don't think about that stuff. They just go and do right and trust that things are going to work out. So these doctors, they were very, very aware that they were good at one thing. And that one thing is that medicine, and that one thing is what they're passionate about doing. So they have this crazy amounts of debt and they have all this risk. They cannot fail if they step out and do this. And then the other thing I observed is that they know what they know, which is medicine. And then the other thing is they know what they don't know.
Leanne:
And so I was like blown away. I mean I was blown away at the humility that I saw with these highly trained physicians. Right? And if you take the stereotypes that are kind of about them in person, I sat there as they asked questions. They raised their hands. They're some of the smartest people in the country, right? They're doctors and they're like, "How do I know what my pricing model should be? How many patients can I actually handle? What do I do with money when I make it? What happens when my client's credit card declines?"
Leanne:
All these questions that are real business, but they had such humility and grace about asking for that kind of help that I was... And all these years of being a profit coach, I have never seen 500 people be so hungry for profits.
Leanne:
I want to do this right and I want to replace my paycheck. I have no choice. I have six figure loans. And it was, there's such humility to it. I just was blown away because I feel like a lot of times, I don't know why, but I feel like I'm constantly talking people into why they should ask for help, why they should ask for my help. Really? It's so obvious. You're in business. You want to replace your paycheck, you want to have a padded retirement account. You want no limit on your income. Those are the reasons that people who are humble step out and say, "Give me help."
Chris:
I think that it's like, as you're talking about it just makes me think about the barrier to entry as an entrepreneur is very low, barrier to entry in medicine is very high, and to go into medicine and know that you're going to, one be in school for, I don't know how many years and to do that, you're going to be way in debt when you're done, requires before you make that plunge to ask some really tough questions of yourself, like, "Am I willing to do this?"
Chris:
And so I think they're probably just better at or more used to evaluating the cost before taking a big risk because medical school and being a doctor is a big risk to your life and entrepreneurs, at least for me as an entrepreneur, my barrier to entry was nothing. And I'm like, "Sweet, let's give it a go! Let's try it out! Let's see what happens!"
Chris:
And I just had way less contemplation, way less thought process going into what I'm going to try, because I had an idea one day and I thought, "Let's go do it." But you don't do that as a doctor. You're like, "Well." I mean, I think you've got to take all the pre-reqs in college. There's so much planning that goes into being a doctor.
Leanne:
Yeah, right. I really like your analogy. I think you're right. The barrier to entrepreneurship is really low and I love that.
Chris:
I do too.
Leanne:
I love that.
Chris:
I do too.
Leanne:
And I also really respected that this group of people saw the enormity of what they were about to do and what kind of things that they needed to understand before they jumped, made the decision, transition date, whatever. And it was really the basics about revenue and the flow of money and how will I know when I break even and questions that I feel I bring to the table with coaching clients. But they were asking them eagerly so it was just, it was really amazing. I talked to a couple people that had made it, right? They made the jump and just straight up asked them like, "How hard was it?"
Leanne:
I work with people and their money all day long. that's what I do. I want to know how hard was it? And a few of them said, "You know what? I was not ready for walking away from a six figure check. We didn't have the money in the bank because student loans were killing us. But I knew I had to do it because it was killing my soul." Right?
Leanne:
And a lot of them said they made a mistake that they went and they hired expensive consultants and marketing firms and everything before they knew kind of the essence of what their practice was or who they were going to serve and it was, it's no different than any other business. These are the things that all of us as business owners have to think about, right?
Chris:
Yeah.
Leanne:
As our income is coming up, I feel like I do this every podcast, as our income is coming up or our revenues are rising, that's great. We're in a growth curve, but what happens is people let their expenses do it at the same level so they have this boom, we hit a new level. We've increased our revenue, but we also increased our expenses, which is why people are always asking me how to get profit. How do we get there? And it's no secret that it has to do with making sure that as your revenue increases that this moves slower and that there's a gap between the two, right?
Chris:
Yeah.
Leanne:
Dollar for dollar everything in that gap goes should be going into the entrepreneur's pocket. But I was really impressed that they kind of admitted that they didn't know how to do that before they did it. It was amazing. Right?
Chris:
Yeah.
Leanne:
Just really amazing to watch how mindful they were about the art of medicine practicing and how they wanted to make it not just about making millions of dollars and quitting their job, but it was about the quality of their life and only wanting to see eight patients a day and it was just-
Chris:
[inaudible 00:16:21] that thinks about their soul, where they're like, "This environment in this big machine that I'm stuck in in the medical industry and I don't feel like it's good for my soul." Anybody that has that type of a conversation is in it for the right reasons. You know they're in it for the good of humanity and people. It's not about a paycheck. It's about making a difference.
Chris:
And I think that's not unique, that's not unique to medicine. There are entrepreneurs who go like, "Look, if I'm going to do my own business, it's got to be about impact and contribution and value and community. So, but I love that. I love it when people come from that place.
Leanne:
I know, and I love it when people are willing to think outside of what society says is the norm. And that's why I love entrepreneurs. I love entrepreneurs because they are willing to take this risk to not only find self-expression in their work, which is huge, but also to find fulfillment financially and to create the life that they want.
Leanne:
That's only possible really. There's [inaudible 00:17:28] exceptions where people accidentally got profitable or whatever, but for the most part, when I'm talking to people, they're being straight up. I have yet in the, let's just go with the last year. I have yet to meet somebody that came through the doors of my office, either virtually or physically, that I thought, "Well wow, you guys really seem to have your act together."
Leanne:
And it doesn't matter whether they have $50,000 of revenue or they have $500,000 of revenue. It doesn't matter. What matters is what they're keeping and that is constantly the ratio, the game that we're trying to play when I'm teaching them the spend on purpose method. I'm not impressed by how much you made. I'm impressed by how much you keep, right, and what you're doing with that to change the quality of your family's life and your community around you. That's why I love entrepreneurs. They're amazing.
Chris:
Yeah. I think in the spirit of the heart of this, the title of this episode, Profitable Direct Primary Care Doctors, right? The profitability comes from exactly what you're talking about, which is the watching what you spend as you're in a growth curve, protecting or creating a gap between what's your revenue and what your expenses are so that there's profit.
Chris:
You want to be a profitable direct primary care doctor, then the goal is you go grow your business and watch those expenses. Watch the right places and know where to put that money. I think that's what your service does. As a profit coach, when people connect with you through a profit discovery call, it's actually starting to line up, where are things at right now? And then what's the plan that as we get into a growth curve, how do we protect that ahead of time so that we're not reactive, but we are actually intentional about the flow of that money?
Leanne:
Yeah. Yep. Another thought there is, my takeaway when I looked at them as a group of entrepreneurs was, if you're a doctor considering and you're listening or even if it were just a nobody listening, I didn't mean that. Not a nobody, a non-doctor like me, a non-doctor like me, I'm definitely not a doctor.
Chris:
Me neither, yeah.
Leanne:
One of the takeaways I heard was what am I spending money on that's increasing my ability to provide health care to somebody? Am I spending money on this because it actually increases the quality of my care, yes or no? And I think that was a really great example of kind of what I'm always saying to people, which is are you spending this money? Are you holding it accountable for return on investment? Can we spend this money and expect that you will get multiple dollars back?
Leanne:
Because you and I both know, Chris, the entrepreneurial muscle that we've talked about on all these podcasts is business reinvestment, business reinvestment, and it just is that muscle, that weights you keep picking up and you know, you start with a five pounder and you're doing this right?
Chris:
Yep.
Leanne:
And then that's too light. You drop it and now you have a 10 pounder and before you know it you're picking the 20 pounder up. And I think there's something to be said about, "Hey, let's build a totally different muscle set. Drop that and understand where we're putting our money and why we're putting it there."
Leanne:
Because just picking it up and building that muscle over and over again of business reinvestment, it's not working any more than chasing revenue is working. So if you're a doc considering walking away for pay for service model and looking at direct primary care, let me just tell you, as somebody who's been coaching entrepreneurs, you're no different than all the other entrepreneurs that have come across my desk, so to speak. And if you can be really diligent and hold yourself accountable to that thought of, is what I'm spending money on actually going to increase patient care? Do you need a brand new exam table? Probably not. Right?
Chris:
Right.
Leanne:
Do you need marble counters in your office? Probably not. Right?
Chris:
Listen. That's, yeah, I mean if you think about all the tools and all the toys and all the agreements and expectations of... I mean there's a lot of that that could get kind of wonky in expenses if you're not careful.
Leanne:
Oh yeah. And destroy your profit before you even have a chance to get going. So I love you guys. You medpreneurs. I think you're great and I want to see you successful and you entrepreneurs that are listening, we love you. This conversation happens because we are committed. I am committed to people's pursuit of profit and it's not just pursuit. The attainment of profit and the attainment of making what you're worth and you decide what you're worth. I help you figure out how to get your money aligned so you can pay yourself what you're worth and stop picking up the 20 pound, 40 pound business reinvestment weight every day. Right?
Chris:
Right. Yeah. Yeah. That's good. I like it. If there are doctors listening to this or even just entrepreneurs who are like, "Listen, I know I've listened to multiple episodes and I hear it every time. I always increased my expenses as my revenue increases and I need to get that in line." How do people connect with you to sort of fix all that?
Leanne:
Two ways. First of all, I want to announce that I just released my new ebook. I'm going to do air quotes book. I used to have this 20 page great profit workshop in a booklet and people didn't read it. No, that's fine. So my new ebook is Five Money Mistakes That You Are Making And How To Fix Them.
Chris:
Nice.
Leanne:
So if you want that, you can go to pursuit-of-profit.com grab the ebook. But if you are ready to actually just do a profit discovery call and connect with me and talk about you and what's going on with you, then you can go to profitdiscoverycall.com and you can book a 40 minute consultation with me and we'll see what we can accomplish.
Chris:
I love it. I love that you're having this moment in history or time where you get to sort of help doctors reinvent an industry. There's no way to reinvent this industry if doctors can't stay profitable in this new model. So what you're helping them do with money is critical to the livelihood of this new model. Because if they're not profitable, that whole thing will dissolve and their doctors won't be able to make a living that way and they'll have to go back to the big machine and mechanism that it is now.
Chris:
So I mean this is a perfect time in history for you to be stepping in to help these people into what they really see to do for the healthcare industry. I love it. It's so good. Good job, Leanne.
Leanne:
I know. I'm really glad that my client dragged me to that conference.
Chris:
Good job, Leanne.
Leanne:
So I can be her virtual CFO forever.
Chris:
I love it. You're a great profit coach and a great guide for entrepreneurs trying-
Leanne:
Thank you.
Chris:
-to well with their money.
Leanne:
Appreciate it.
Chris:
Thanks for a great episode.
Leanne:
See you next time.
Chris:
Yep, see you next time.