Key strategies for private medical practices [PODCAST]

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We dive into the challenges and strategies for private medical practices to thrive, featuring our guest, pediatrician Nneka Unachukwu. We discuss the importance of adopting an entrepreneurial mindset, effective business practices, and the role of marketing in health care. Nneka shares insights on patient retention strategies, optimizing team roles, and taking ownership of revenue cycle management.

Nneka Unachukwu is a pediatrician.

She discusses the KevinMD article, “5 strategies for private practice success in 2024.”

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast, and get CME for this episode by clicking on the CME link in the show notes. Today we welcome Nneka Unachukwu. She’s a pediatrician, and today’s KevinMD article is “5 strategies for private practice success in 2024.” Nneka, welcome to the show.

Nneka Unachukwu: Thank you so much for having me. I’m glad to be here.

Kevin Pho: So let’s start by briefly sharing your story and journey.

Nneka Unachukwu: Yeah, I’m a pediatrician. Went to school in Nigeria, the University of Nigeria. At that time I was very sure I didn’t want to be a pediatrician, which is a story for a different day. But moved to the United States, did my residency here at New York Beth Israel, did what every great pediatrician would do afterwards, which is get a job. And the job I planned to work, but my boss, a mentor, said, like, you should start your own private practice.

And so I say ignorance is bliss, because I did. And when I started it I thought, I will hang my shingle and they will come. And I hung my shingle and they did not come. So I had to learn about marketing, and building a referral base, and hiring and firing, and all the things. And as an introvert, I was terrified. But I’m so grateful that I did learn all of those things, went on to build a very successful practice. This was 14 years ago. Practice still doing well today.

And in 2016 I realized that we have to retool ourselves. Nobody’s coming to save us, we’re going to save ourselves, but it will require that we evolve as physicians and embrace entrepreneurship. And so that’s when I really went into setting up a company to help doctors build profitable businesses, and I’ve done that since 2016.

Kevin Pho: All right. So tell us a little bit about your private practice today. How many clinicians are there, how big’s your staff, what’s it like today?

Nneka Unachukwu: Yeah, so today we have three doctors and we have one physician assistant. Nobody works five days. Some people work four days, three days. Flexibility is our love language, kind of.

And so my original plan was I would work until I was 40 and then I would retire, because I have so many other things to do. And so I started seeing patients a day a week from when I turned 40. I’m 45 now. And so I have a practice administrator who does a really great job of running it. I have the clinicians that we work with, and it’s done really well. Even the pandemic year, we thrived through that year, which I’m very grateful for. So yeah, it’s fun.

Kevin Pho: We always hear that private practice is a dying breed, and a lot of new physicians who come out, a lot of graduating residents, they often shy away from private practice because they just don’t get a lot of exposure to it. And we’re going to talk more about how a physician can be successful in a private practice. Your KevinMD article is titled “5 strategies for private practice success in 2024.” For those who didn’t read your article, tell us what it’s about.

Nneka Unachukwu: Yeah, so I talk about these five strategies because, of course, the common narrative is that private practice is dead, not even dying. But that’s been a narrative that’s been there since I started 14 years ago. And so these five strategies are kind of things that will position doctors to win.

The first one is really adopting the mindset, the attitude of an entrepreneur. Because what I find is, people say business is what killed medicine, I don’t want anything to do with business. And I’m like, no, people who put profits before people in business killed, like, they’re the ones who did that. But business is required.

So when we run our practices like it’s a job, or, we can hang a shingle and people will come, or, because we’re great clinicians people will come, a lot of times those practices do not work, because a practice is a business. We have to make the numbers work, we have to build something that is profitable, we have to lead a team. There’s so many things we have to do. If we don’t adopt the attitude, then we just don’t show up in a way that can allow it to survive.

So a practice is a business. I’ve had doctors tell me that, this is not a business, it’s a practice. I’m like, yeah, it is a business. So that’s the starting point. And for physicians that does require a bit of an evolution, because we’re not trained to think that way. That’s the very first thing.

The second thing that I talk about is really embracing promotion, marketing. Again, I did the thing of hanging the shingle and expecting them to come, and there was a time when it would work. We didn’t have as much competition in the space. There were no MinuteClinics, there’s not Amazon in the health care space, JPMorgan in the health care space. We kind of had a monopoly, even though we didn’t mean to, but we did. So you could hang a shingle and they would come. But those times are long gone.

And so the person who markets is the person who wins. And if I believe my practice is great, we offer a great service and all of that, then it’s my moral responsibility to be as loud as possible about it and let people know it exists so they can come. Because if they don’t know it exists, they’re not going to come.

So that’s the second thing. And again, as physicians, a lot of times we have some mindset drama around that, like promoting, and, I don’t want to sell myself, and things like that. I’m like, but we promote all the time. I’m a pediatrician, I promote vaccines all the time. An oncologist promotes chemo all the time. If someone comes and says, I’ve decided I’m not going to get any treatment, we would promote, right? So we do that, we just haven’t done that in the context of money.

The next thing is really building a relationship with our billing departments. Because a lot of people who run private practices will not meet with a biller, do not know what their accounts receivable look like, don’t talk about the money at all. As long as there’s money in the account to pay the bills and pay the team, we’re good.

We don’t have to do that, in the times we’re living in it really is a smaller profit margin, if you will, which means we have to run lean organizations. The billing department is kind of like the aorta of our private practice, and if it gets nicked, we bleed out. It really is as simple as that. And so the luxury of not having conversations, not reviewing, not troubleshooting, we don’t have that luxury anymore. We have to understand what is happening with the numbers, we have to know what our accounts receivable looks like, all of those things. The revenue department, those are our friends, it’s part of our practice.

And if we ever feel like, I don’t want to talk about numbers, I don’t want to talk about money, the thing is, if our practices are not profitable we will have to shut them down. And if we shut them down, no matter how much we love our patients, we’re no longer in a position to serve them. So one of the best things I do for my patients is I run a profitable practice. So that’s something we have to do.

Number four is prioritizing retention of current patients. Because sometimes we’re like, I want to attract new patients. But a lot of times we have all the patients we need, actually. I look at data from doctors’ practices, sometimes they have 30 percent of their patients overdue for well-check appointments, 40 percent. Literally just hitting the phone and saying, hey, Mr. John, we see you’re overdue for your appointment, blah blah blah, come in, it can fill up schedules that have had all these gaps in them.

Just paying attention to the people we already have, being stewards of the people who have already entrusted us with their care and all of that. If we pay attention to that, that is an opportunity to recover, to build up, to be busy, and all of that.

The final one, which is one of my favorites, is really optimizing the team. And I talk about that because sometimes when we hire as people in private practice, we hire for people to do tasks. We’re not necessarily thinking about outcomes, and we’re not thinking about, how does this role contribute to the bottom line?

So what ends up happening is the owner of the practice is bearing the entire weight of the profitability of the practice. Because the other people, you’re like, yeah, scan some papers, for instance, a front desk person, yeah, just answer the phone. Is it answer the phone, or is it schedule appointments? Those are very different things. One is a task, one is an outcome. With a medical assistant, make sure that you work up the patient. Work up the patient, also make sure that everybody who leaves has their next appointment scheduled. Those are very different things.

So when we start thinking about how to optimize the team roles so that everybody has revenue-generating activities as part of their role, then you create a practice where, as the owner, you’re doing what you need to do to take care of patients and create revenue, but then your team members are also doing the same thing, and they’re creating revenue that can account for their salaries, the overhead they generate, and some profit for the practice.

So imagine one practice where there are 20 employees and the owner is bearing the weight, another practice where there are 20 employees and everybody’s kind of playing their part. Doing it that way leads to much more financial stability and less burnout for the owner, because the weight, they’re sharing the load.

So optimizing the team, and it’s really little tweaks, but they’re very strategic and they’re very intentional. It can literally be night and day. And then you’re no longer afraid of hiring, because you know everybody who comes on is empowered to take care of people, create enough revenue for their salary, their overhead, and some profit for the practice. So yeah, those are the things I talked about in the article.

Kevin Pho: Now, there’s a substantial proportion of physicians who proverbially say, I just want to focus on the medicine, I don’t want to worry about business, I am going to outsource the business to a hospital or large academic medical center so I can just focus on medicine. Now, you’ve been in private practice for 14 years now. What are the advantages for physicians going down the private practice path?

Nneka Unachukwu: Well, when it’s properly run, the thing about private practice is, it’s a vehicle that gives you the opportunity to have the impact you want to have in the lives of your patients. You’re able to practice medicine on your terms. There are people who decide to focus on different things, you want to focus on weight loss even though you’re family medicine, whatever, like you get to have that impact. And the level of fulfillment that comes from that is unbelievable.

On the other hand, when you run it like a business, you’re also able to create financial freedom for yourself, and then time freedom, which for physicians I think is probably even more important, where you have the capacity to spend time with the people you want to spend time with, doing what you want to do with them.

And so for me, for instance, I’ve always wanted to homeschool my kids. I’m like, yes, the educational system is going to do what it needs to do for them, but for me, I want to be able to transfer all the things I’ve learned, all my expertise, I want them to have unique experiences, all that that school is not going to do. I get to homeschool my kids, that’s what I want to do.

So the impact, the financial freedom, and the time freedom, that is what private practice can make possible. But you have to play by the rules. If you just hang a shingle and say, I don’t want to have anything to do with business, it’s not going to work.

Kevin Pho: Now, you always add that caveat, private practice gives you that financial and time freedom, but only if they’re run well. So today, from your consulting and what you see, are the majority of the private practices that you see, are they run well?

Nneka Unachukwu: I can’t say the majority. I mean, we live in times where almost every day there’s somebody saying, yeah, I decided to close shop, and things like that. I don’t know that most of them are run well, but I just think that’s because we’ve never been educated on that. And this is not to say something to complain about, because we’re already here and we can decide to get an education about it.

And so I think the challenge here would be just accepting, OK, I have to learn some things. It’s not that complicated. I mean, we learned the Krebs cycle, OK? It’s not that complicated. We can learn these things, and it will make all the difference, and it will be worth the time and the effort that we need. It’s not like going back to school, it’s not like getting an MBA. There are just a few critical things that we need to learn.

Kevin Pho: How long did it take you before you felt comfortable with that business aspect of running a private practice? Because I think when you told your story, you didn’t have any training, you just started on your own. How long did it take you to become really comfortable in that private practice setting?

Nneka Unachukwu: Oh, let’s see. OK, so the first year, for sure, there’s nothing comfortable about it. And to be honest, I’m always embracing new things, so I’m always uncomfortable. So I’m kind of over the trying to be comfortable. If you’re someone who grows, you’re always going to be uncomfortable.

But I think the turning point for me, when I kind of sat in my role, was, I had read a book by Brian Tracy, and in it he made a statement, he said, all business skills are learnable. And before that I kind of felt like I didn’t know what I was doing, maybe I’m going to make a bunch of mistakes, and all of those things.

Dr. Kevin, to be honest with you, I was so terrified I didn’t even hire anybody. I was my own medical assistant, I was my own front desk, I was my biller, because I didn’t think anybody would follow me. I would answer my own phones, like, thank you for calling Ivy League Pediatrics, this is Ella. Ella was my alter ego. That’s how bad it was when I started.

But when I read that statement, it dawned on me that it doesn’t matter how comfortable anybody else looks, it doesn’t matter how great they are as entrepreneurs, like physician entrepreneurs or anything like that. They are doing better because there are skills they have that I don’t have. So I stopped seeing problems in business as problems, and I started seeing every problem as a project. It just represents something that I have to learn.

So I think my comfort started from there, because I was like, OK, there’s no big problem, there’s nothing wrong with me, there’s nothing I can’t learn. If there’s something that is a problem, it’s just a pointer to a new skill I need to acquire, and I can acquire it and it’ll be OK.

And so I think that’s when I became comfortable. So I’d probably say the first year and a half, somewhere around there, was when I read that book and made that decision. Didn’t change the fact that I still wake up the next day scared, like, oh, now I have to hire a doctor, oh my goodness, what’s going to happen to my payroll. I still had all of those. But when something like that would happen, I’m like, yeah, just something else to learn, something else to overcome, no biggie. So I think that attitude shift is where everything changes, because everything else is learnable. It’s a question, it’s a book, it’s a, whatever, I’ll be fine.

Kevin Pho: So I think one of the reasons why private practice is, quote unquote, dying out or already dead, is that a lot of medical students and residents just don’t have exposure during their training to a private practice setting. So for those new residents out there, let’s say pediatrics residents, and they’re looking for new opportunities, what are some clues to private practice settings that they could tell whether it’s the right fit for them? What are some things that they should look for in a private practice setting if they are to consider that path?

Nneka Unachukwu: So, consider starting a private practice or working in a private practice?

Kevin Pho: How about working in a private practice first, because I would think that’s the more common scenario.

Nneka Unachukwu: Yeah. So I think the starting point would really be networking, and I’ll explain what I mean by that. This is something I didn’t do, because when I started off I was so shy and introverted. But people have all the answers you need.

And so there are people who are in private practice. Imagine if a resident was considering them and said, OK, these are 12 people that I know in private practice, in the specialty that I am in, different stages, I’ll just have conversations with them. At the end of those conversations you will know. There are tons of Facebook groups where there are people who are in private practice. You can get in there, ask questions, pay attention to the answers of questions other people are asking, and you’ll get a feel for it.

But as a person, it really depends on the goals that you have. If you are looking for a place that is like the hospital, meaning every single thing you can desire is available, they have massive support teams, then a small private practice may not necessarily be a great fit for you, because you’re going to need to wear more hats in a smaller private practice, you’re going to need to be more flexible, and things like that.

So there’s some part that will depend on what your goals are. But I mean, just put yourself in the communities where people are in private practice, have a whole bunch of conversations with people who are actually doing it, and you’ll get all your answers, really.

Kevin Pho: What kind of questions should physicians ask themselves to see whether they’re right to either join a private practice or start a private practice themselves?

Nneka Unachukwu: Yeah, if you want to start a private practice, the first question is, are you ready to retool yourself? The current version of you cannot pull off a private practice. And I think that becomes the most important question.

The second question is, are you willing to live like nobody else for a few years, so that after that you can live like nobody else? Because in the beginning of a business it’s going to be quite a bit of hard work. There are going to be long nights, you are going to experience disappointments, things like that are going to happen. This is normal.

And the way I like to say it, I’m a pediatrician, when babies start walking they fall a lot, and the baby doesn’t say, oh, I fell five times, I’m never doing this again. They just keep going till they get it. And that’s the way it is as an entrepreneur. So that’s a question to ask, like, am I willing to do that for a few years, so that after that I can then have all these other things that come on the other side of it?

Another critical question would be, how do I want to fund it? I think people need to think about that. Do I want to take a loan, do I want to self-fund it, so maybe I’m working locums and I’m paying for it as I go? That’s a way of doing it. But I think the most important question is, am I really willing to make that transition from physician to physician entrepreneur? Am I willing to retool myself? Because if you’re not willing, you probably don’t want to do it. It will require a completely different version of you.

Kevin Pho: We’re talking to Nneka Unachukwu. She’s a pediatrician, and today’s KevinMD article is “5 strategies for private practice success in 2024.” Now we’ll end with some of your take-home messages to the KevinMD audience.

Nneka Unachukwu: The message I have is, there’s no cavalry coming for us. There are things that don’t look right in the health care space, but if we are willing to make the changes, we can thrive too. And we may turn around and say, we never want to see anything like this ever again, but this was the best thing that ever happened to us. So it’s just time to change. It’s time for us to change.

Kevin Pho: Well, thank you so much for sharing your story, time, and insight, and thanks again for coming on the show.

Nneka Unachukwu: Thank you for having me.

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