3 Strategies To Successfully Scale Your Private Medical Practice

There’s a good chance your definition of “success” has drastically evolved since you first started your journey in medicine.

Milestones like graduating medical school, completing your residency, and becoming board-certified probably felt like the most monumental and challenging endeavors you could possibly take on at the time.

But hindsight has the unique advantage of turning mountains into molehills. Compared to starting and running your own successful practice, those past accomplishments seem like small potatoes.

That’s because success is subjective.

In each chapter of our lives, we start with one set of goals. When we achieve them, we reach a new plateau. Then, we set new, loftier goals and raise the bar for success even higher.

If we want to achieve that next tier of success, it usually requires changing our approach.

As the adage goes, “What got you here won’t get you there.”

We see this all the time with elite athletes. Reigning PGA Champions change their golf swing in the offseason. Olympic gold medalists redesign their entire fitness regimen. Super Bowl Champion quarterbacks re-examine their entire playbook to find new ways to attack a defense.

Obviously, there was nothing “wrong” with the initial championship-winning swing, fitness regimen, or offensive playbook. Each brought a certain level of success. But to continue that success — to build on it and reach new levels — something needs to change.

For private physicians, it’s no different.

You’re what most people (including other physicians) would call “wildly successful.” After more than a decade of education and training, you decided to become an entrepreneur as well. You started your practice, filled your patient panel, and earned a substantial recurring revenue stream.

So what comes next?

Growing vs. Scaling Your Practice

To reach new levels of success, we need to get crystal clear on two core concepts: growing and scaling.

These terms are often used interchangeably, but there are important differences.

When starting a private medical practice, growth is the primary objective. We typically associate the phrase “grow your practice” with adding more patients, since growing your member base also grows revenue.

In a growth model, increasing your results (patients and revenue) also increases the demand on your resources (time, energy, and financial capital required to serve your patients). Results and resources are positively correlated.

There’s nothing wrong with this model, but for the sole owner and provider in a private practice, growth has a ceiling.

The number of people you can serve is limited by your time, which limits options for growth. With an already full patient panel, accepting more members would mean shortening the duration of patient visits, putting the patient experience at risk. The only feasible way to grow profit, then, is by raising prices.

This is where many private physicians find themselves stuck. They’re on a plateau and want to achieve greater success, but they’ve reached the limits of their current approach.

This brings us to scaling.

When you scale, you increase the results without a substantial increase in resources. You remove the traditional constraints of time, energy, and capital to grow your practice exponentially.

So how do you do it?

3 Successful Scaling Strategies

There are multiple ways to scale a private medical practice. In the ROAMD community, we’ve identified three main strategies successful physicians use to scale up:

Provider Expansion
Location Expansion
Partnership

To explain and compare these strategies, we’ll look at four factors involved with each:

How quickly they allow you to scale.
How much control you retain.
The degree of involvement required for daily operations.
The level of capital resources required from you.

1. Provider Expansion

The first way to scale is to hire more providers (physicians, nurse practitioners, RNs, etc.) to your existing private practice. You maintain complete ownership and operate in your existing physical location, but you expand the number of patients your practice can serve.

Timeline

Of the three scaling strategies we’re listing here, Provider Expansion takes the longest amount of time to scale.

First, finding the right new provider for your practice is like finding a needle in a haystack. It’s a difficult, time-consuming, and lengthy process to find someone who’s a perfect fit.

Then, even with the additional capacity, there’s no significant increase in your market presence. Over time, as you serve more patients and earn more profits, you can begin to market to new patients, but this isn’t a quick process.

Also, since this is a slower scaling strategy, you run the risk of competitors with a larger footprint moving into your market and taking some of your market share.

Control

If timeline is the biggest downside of Provider Expansion, control is the biggest upside. Although this strategy can take longer than others, it allows you to maintain full ownership and decision-making authority.

You have the power to shape the culture and image of your practice, as well as hire (and fire) staff as you see fit. Overall, this ensures you maintain the highest standard of quality in a sustainable way.

And, since you’re the sole owner, you get the highest share of the profits.

Involvement

Being the face of the company and primary decision maker also means you’ll maintain the highest level of involvement. While hiring, you’ll still be running the business and seeing a full patient panel. Once other providers are onboarded, your patient load can decrease, but you’re still the owner, physician, and decision maker.

Required Capital

Hiring new providers isn’t cheap, but this strategy does keep you free from the major debt associated with other scaling strategies like location expansion. Still, as the owner, you’re responsible for paying the new providers and helping them fill their panels.

2. Location Expansion

The second scaling strategy is opening additional locations for your practice to serve new members, all while maintaining sole ownership.

Most physicians choose to expand locations for one of three reasons:

The existing location doesn’t have enough space to accommodate new providers and new patients.
They want to serve more patients similar to their existing target market but in a different region.
They want to tap into new targeted segments of patients where location convenience is paramount. For example, one of our ROAMD member practices recently opened a new location in a downtown corporate suite to serve executives and entire departments from large companies in the area.

Since you’ll obviously need providers to serve in these locations, this strategy shares many of the same characteristics as Provider Expansion, but with several key differences.

Timeline

Again, the biggest constraint in the timeline is finding the new providers to serve in these new locations. But, once you have the available staff and increased capacity, scaling can happen much faster than with a single-location practice.

Control

As the sole owner, you’re still the primary decision maker. You can choose to modernize the aesthetic of your new offices, and maintain all decision-making power regarding branding, marketing, staffing and operations.

However, expanding to multiple locations means all staff and operations will no longer fall under your immediate supervision. You’re not sacrificing ownership, but your control is slightly diminished. And, if we’re being honest, to attract the right caliber talent you will likely need some type of equity incentive package, which slowly erodes control.

Involvement

In Location Expansion, you still have a high level of involvement, but your staff will primarily be running the daily operations. You may still see patients regularly, but by necessity, you begin to take on more of an oversight role.

Required Capital

This scaling strategy requires the largest amount of capital from you. This is the biggest downside of Location Expansion.

In addition to paying new staff and providers, the initial cost of leasing or buying another physical space can be high. Over time, the increase in patients and revenue will compensate for this, but the upfront capital expense will be significant.

3. Partnership

The final scaling strategy is partnering with another physician or team of physicians to create a new, single entity. This adds more providers, staff, and (most likely) more physical locations. But by partnering, you’re no longer the sole owner.

Timeline

Of the three strategies we’ve listed, this is by far the fastest.

Instead of spending time seeking, vetting, and hiring new providers one by one, you join with a whole group of them at once. This immediately increases your practice’s capacity to see new patients.

And with the new influx of resources, you quickly have a larger footprint in terms of branding, marketing and physical locations.

Control

The primary downside of Partnership is that you have to sacrifice control. As a partner, you’re no longer the sole owner, so decisions must be made by group consensus. This includes decisions about staff, branding, culture, etc.

Also, since ownership is now shared, you’re entitled to a smaller share of total profits.

Involvement

One of the biggest benefits of Partnership is that responsibility (along with financial risk) is now shared. With more resources available, you can hire more providers, which supplies even more freedom in the business. This gives you the flexibility to do things such as adjusting your call schedule more readily.

Required Capital

Since you’re joining other physicians and pooling your resources, this scaling strategy also requires the least amount of personal capital.

Depending on your situation, you’ll likely have instant access to multiple facilities, providers, staff, and marketing budgets that would otherwise take a ton of money (and time) to acquire.

Your ownership share may be less, but so is your initial investment. And with the potential for even higher returns, a lower share in a partnership could outweigh the higher share in a sole-ownership practice.

Questions To Ask Before Choosing a Scaling Strategy

There’s no one-size-fits-all strategy for scaling. As we’ve said, success is subjective. Different physicians want different things from their careers in medicine, and each of these three strategies can be fulfilling depending on those specific wants and needs.

To help you determine the best strategy for scaling up your practice, here are several questions to ask yourself.

What do you want your lifestyle to look like?

What’s your ideal call schedule?
How many hours per week do you want to spend seeing patients?
How many hours per week do you want to spend on business operations?
How often would you like to vacation (or step away from the business)?
What does your succession strategy look like when you choose to step away from medicine in the future?

How much ownership do you want to personally retain?

Do you need to be the sole decision-maker on issues like branding, culture, target patient, etc.? Or do you want to encourage other people’s input and autonomy?
Are you comfortable sharing profits?
Are you willing to sacrifice profit share for shared risk?
What are your state regulations regarding practice ownership?

How quickly do you want to scale?

Are you willing to give up control over certain parts of your practice to potentially grow faster?
How much longer do you want to practice medicine?
Is there a competitor in your market growing faster than you?

What can you afford right now?

What are your other income sources?
Are you willing to take on private equity?
Are you willing to take on debt?
Based on your revenue right now…
- Can you afford to hire staff?
- Can you afford to hire physicians, nurse practitioners, or RNs?
- Can you afford to expand your physical space?
- Can you afford to buy another practice?
- Can you afford to rebrand?

Your answers to these questions are key and will help lead you to the scaling strategy that best fits both your practice and your personal goals.

Written by Dr. Scott Pope

Dr. Scott Pope serves as the Chief Growth Officer at In Scope Ventures, a growth consulting firm focused on early stage healthcare companies. Scott is passionate about healthcare entrepreneurship and has been involved in various advocacy efforts to promote innovation in the industry.

Scott earned his PharmD from Ohio Northern University, where he participated in Habitat for Humanity, Phi Mu Delta, Order of Omega, and NCAA basketball. After graduating from ONU, Scott completed a pharmacy residency at Cone Health, followed by a specialty residency in infectious diseases, internal medicine, and academics at Campbell University and Duke University Medical Center.