Concierge Doctors Share Their Biggest Business Mistakes
“Success does not consist in never making mistakes but in never making the same one a second time.”
— George Bernard Shaw
Any successful endeavor consists of learning from past mistakes, and concierge medicine is no exception.
Many stories of success are being written right now. Every day we hear exciting new reports from physicians whose practices are thriving.
But here’s a secret. They all include a familiar element: mistakes.
Mistakes are just part of the story, and every successful entrepreneur makes them. The difference between success and failure isn’t whether or not you make mistakes; it’s whether or not you learn from them.
Some of the more accomplished, successful physicians in the ROAMD network were willing to share some of the business mistakes they’ve experienced on their journeys and what they learned in the process. For each, we’ll look at the mistake, the fallout, the solution, and what others can learn so they don’t have to go through the same mistakes themselves.
Misspending Your Marketing Budget
Dr. James Pinckney – Diamond Health
One of the biggest mistakes any young business can make is misspending. Unfortunately, this is all too common.
Dr. James Pinckney of Diamond Health explained to us how he spent a boatload of his marketing budget on print advertising and billboards, thinking this was the best way to get his brand out there. But there was a problem. It wasn’t working.
So, he switched gears to focus on his own social media channels. He began doing TV interviews to establish himself as a medical expert in his region, always making sure to wear his company’s branded clothing on camera.
Through these avenues, he could communicate his brand story, explain his why, and connect with his audience. He found that this worked far more effectively than billboards, and that it engendered trust with prospective patients and led to more enrollments with his practice.
Dr. Pinckney’s takeaway? The things that work the best are the things you don’t have to pay for.
He recommends simply dedicating five minutes of your day to working on something you can post on social media, LinkedIn, or your website, whether that be text, audio, or a simple smartphone video. He also says that while establishing yourself as a regional medical expert on TV and radio takes more time, it’s a worthwhile avenue to pursue.
Rushing the Hiring Process
Dr. Matthew Priddy – Priority Physicians
Hiring is one of the most important — and challenging — aspects of a new medical practice. Dr. Matthew Priddy of Priority Physicians told us that hiring is like getting married. You either choose well or poorly, and if it ends in divorce, it can be a costly mistake.
Dr. Priddy reflected that hiring mistakes were most likely during times when his practice urgently needed a new team member on a tight deadline. Such circumstances create pressure that can cause owners to shortchange their due diligence process in order to meet an immediate need.
The problem is, a new hire who isn’t properly vetted may not be a good fit for your practice. They may not share your values, culture, or philosophy, or they may not fit your existing team’s dynamic. And it becomes messy, expensive, and unpleasant to disentangle yourself.
Dr. Priddy’s takeaway was that you cannot do enough due diligence when looking to bring someone on long term.
“You can spend so much time trying to teach someone to be the kind of provider you need,” he says, “when it would have been easier to just spend the time finding someone who already possesses the qualities you’re looking for.” He realized you can’t change someone’s personality through training, so if they don’t seem like a good fit beforehand, then they won’t become a good fit after they’re hired.
Hiring a new care provider requires a lot of time and planning, but it’s a worthwhile investment. Because if you think it’s hard to find the right hire, it’s 10 times harder to get rid of the wrong one.
Dr. Priddy learned from his mistake and adopted new, more thorough hiring practices. He now subscribes to the motto: be slow to hire, and fast to fire.
Overspending on Equipment
Dr. Jordan Lipton – Signature Healthcare
The same way you don’t want to waste money on bad hires, you shouldn’t overspend on equipment, especially early on. When establishing your practice, it’s smart to start lean.
Dr. Jordan Lipton of Signature Healthcare relayed to us a capital investment misadventure from when he and his colleagues first started their practice. A supplier sold them an expensive chemistry analyzer, promising that it would generate significant revenue. But that didn’t turn out to be the case.
Signature Healthcare ended up getting rid of the equipment within 18 months, essentially wasting over $100,000 in equipment, training, maintenance, and other expenses.
The lesson here is to start lean, especially when setting up your practice. Wait on purchasing expensive equipment unless you’re certain that you’ll use it and that it will directly or indirectly generate revenue or in some other way add value to your concierge practice.
Naming Your Practice After Yourself
Dr. James Pinckney – Diamond Health | Dr. Jordan Shlain – Private Medical
Another mistake reported by several doctors is naming your practice after yourself.
While this may seem like a smart move for branding, there are a few fundamental problems with naming any business after yourself. For one, it’s harder to sell later on. Additionally, naming your business after yourself can restrict its growth.
Dr. Pinckney acknowledges the naming issue can be a struggle because, at the beginning, you are your practice. Yours is the face people want to see when they come in.
To avoid getting stuck in a brand that’s all about you for the long term, he recommends separating your name from the name of your practice. Then you can develop each on its own: your name as a medical expert and your practice as a great destination for physicians and patients.
Dr. Jordan Shlain observed that many practices in San Francisco were all named after the founding doctor. He realized that this might shoehorn him into a cult of personality, and he also didn’t want to sound like a law firm.
He decided early on that the measure of his success should not be people knowing his name, but people not knowing his name. Success would be measured by the people who were drawn to the quality of the practice and the doctors within the practice.
Private Medical now has 20-30 families joining each month. Many of them have never heard of Dr. Shlain, and he has never heard of them.
Undervaluing Yourself and Your Services
Many doctors have made the mistake of undervaluing themselves and their practices. This is an easy miscalculation to make early on when uncertainty about the future abounds.
Undervaluing yourself means you underprice your services and lose money. Many new medical practitioners think that offering lower rates will entice more patients. While that may sometimes be true, the problem is that you end up doing more work for less money and, ultimately, unintentionally diluting the service you’re able to provide.
One California-based doctor in our network recently increased his rates and lost members. His panel dropped from 310 to 160. But, here’s the catch: He’s now making more money.
By reorganizing and raising his pricing structure, he allowed himself to make a better living and give himself more time to take better care of fewer patients.
Dr. Lipton echoed this sentiment, recalling how in the early years of his practice, he underpriced his services. Now he has a price structure that’s fair and increases a small amount every year. He lets his patients know in advance that there will be an annual fee increase of anywhere from 1-3%.
Dr. Lipton is now able to earn more and serve his patients better.
Another symptom of undervaluing your practice involves giving away equity to partner physicians too soon. In the early scramble to scale and expand, many doctors offer ownership percentages to attract new physicians without having some sort of incentive or vesting schedule.
Truly understanding the value of your practice will give you a deep aversion for this. You’ve put in too much work to hand out back-end percentages to physicians just for showing up. That equity could be worth millions someday. Physicians who get equity in your practice should only do so the old-fashioned way…they earn it. (Yes, that’s a circa-1986 Smith Barney reference.)
Avoid Unnecessary Mistakes
Business mistakes and course corrections come with the territory of running a successful private practice in concierge medicine. But all mistakes aren’t created equal. Some are more costly and inflict more lasting brand damage.
The key is to avoid the unnecessary mistakes when you can.
By learning from the mistakes and solutions generously shared by knowledgeable concierge doctors who run successful practices, you can learn from and avoid some of the common — and costly — errors in membership medicine.
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.
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