Functional medicine lends itself to one of the best private practices models. It allows you to control your own salary and how you treat patients.
Do not miss these highlights:
02:10 - Being a Solo Private Practice versus joining a Group of Practitioners
04:54 - Why some practitioners are afraid to embark on developing their own practice, starting a business from scratch
06:18 - The additional financial things that you have to think about when you're in a Private Practice
08:00 - In Private Practice, you have to be aware that your income can fluctuate from month to month
09:15 - Some people say “Medicine shouldn't be a business”.. Shouldn't it be a business?
10:14 - The second model of practice is- Employed Practitioner and The things you want to consider when taking this position
12:38 - The third model of practice - Academic Position
12:54 - The advantages of Private Practice
14:51 - Private practice providers and doctors make more money, have more flexibility and control over their schedule
17:26 - Private Practice vs Employed Practitioner
Transcription of Episode #11:
You're listening to the Functional Medicine Business Podcast featuring Dr. Deb, one of the most creative Functional Medicine Business Practitioners in her industry. She shares the wisdom and knowledge that she has gained over 25 years of functional medicine, a pioneer in functional medicine, scheduling, leadership and Practice Management. Dr. dabit has a wealth of knowledge and is eager to share to help functional medicine become more productive, and for the practitioners and patients to live better lives. Our podcast shares the good and the bad of our industry because Dr. Deb knows the pain you live every day building a functional medicine practice with practical tools of how to manage money, taxes and patient care. She will discuss it all with you.
Hey, welcome back. This is Dr. Deb from Functional Medicine Business Podcast. I am an integrative Functional Medicine Practitioner helping others grow their functional medicine practice. And today I want to talk to you about why you should start a functional medicine private practice. So you've completed your training, and your either a physician, a naturopath, a nurse practitioner, a D.O. or health coach, maybe even a chiropractor. And there are a few different models of practice that you can go into the three main practice models, our private practice, academics or an employee practitioner. And there's a lot of other little ones out there that people may just fall into. Or once you've completed your training, you're looking for something different. But now that you've finished your functional medicine training, maybe you graduated from IFM or A4M. And you want to provide a truly preventative medicine program to your clients. How do you create a practice like this? And why do you create a practice like this? Well, you can go out on your own and you can start your own business, your own practice. Or you can join a group of other doctors and practitioners meaning you go into private practice by yourself. Or you go into a practice a group setting where you're all providing some form of functional or alternative medicine. That practice may look like a doctor, a nurse practitioner, a health coach and acupuncturist a massage therapist is in that group, maybe a chiropractor or a physical therapist, and you're all delivering different modalities of care to patients. What's kind of nice about that is you all get to share patients together, even though you have different philosophies or different trainings and different healthcare modalities that you can offer to people. So that's one way of looking at a group of practitioners. Now you can also go into solo, solo private practice where you're all by yourself, you're the only practitioner, you maybe have one or two support staff, maybe you have a front desk person. And then you have what we call a back staff or an another medical staff practitioner that helps you take care of patients helps you triage people. And then you could also do a private practice on your own where you're the sole owner of that practice. And maybe you develop a group practice where you bring other practitioners into your practice. That's ultimately what I did, started my own practice by myself with one other physician. And now we've grown since then. And I have different practitioners with different different trainings, and providing different modalities of healing under one roof inside the practice.
It's kind of nice when you have a group of practitioners that are established, and you join that group, because usually, if they're established, they already have clients, they already have a reputation. They already have medical protocols that they've worked with. They have support staff that's trained. So you don't have to do all of that from scratch. But some people like to start their own independent practice all by themselves and start it from the ground and work it up themselves. There is no right or wrong. It's really what you're most comfortable with at this point.
So now you might say, I went into medicine, I didn't go into being an entrepreneur or I don't want to deal with running a business. I get that you went into medicine to help people. That may be true, but like any other job, there's other business aspects of that job that you need to learn. And unfortunately, in in our medical training, we're not taught business or we're not talking how to manage people. We're not taught how to market and grow a practice, the only thing that's taught to us is how to heal people how to deliver medicine, how to think objectively, the business side of things are oftentimes left out. And that's what makes it kind of frightening for us to think about embarking on developing our own practice and building something from scratch.
When you're in practice for yourself, you have to know how you're going to get paid, how much are you going to get paid, how many patients it takes a month to pay your overhead expenses, you have to pay other people salary. And so you have to know what their salary is, you have to know how you're going to cover that. In our medical training, we're not taught what overhead is, it's all about the expenses that keeps your clinic running. But when you work for someone else, you don't think about how much this syringe cost that I'm wasting. How much is the rent, what's the heat? What does it cost to keep the lights on? None of those kinds of things come into play in our mind. We just think like this big organizations making plenty of money, it's not a big deal. We don't think about any of those things. But when you're in private practice, and you think about all of those things, how much product gets wasted? Do you buy product that sits on your shelf and expires and you're just throwing money away because you're not able to sell it and make a profit from it. So these are things that you have to think about when you're in practice for yourself. Understanding the waste, which is necessary for you to perform your job is something business owners definitely need to know about.
Now, if you're in your own practice, or you join an existing practice, you typically pay for malpractice, licensing fees, marketing costs, DEA numbers, things like that, unless your financial contract is set up as such as more of like an employee, you get paid a salary, it's the same amount every two weeks, these expenses are paid for by your employer, by your partnership, or your your practice itself. And it comes off of your salary in a different way. In my practice, we do that with our practitioner, so our practitioners are paid on productivity, they're paid a base salary up to a certain dollar amount. And then after that, they're paid a bonus on that those figures. And then we do cover their expenses of malpractice and insurance and licensing fees, and DEA costs and marketing costs. We take all that into consideration and we pay them that way. But you may be a 1099 employee, where you eat what you kill, so to speak is how you get paid, the busier you are the more money you get paid, but you pay for all of those expenses out of your own pocket, then there's a lot of different ways of doing that. So in private practice, you have to be aware that if you start your own practice by yourself, your income can fluctuate from month to month. Now say your overhead expenses are $15,000 a month, you're going to need to collect at least 20,000 a month in order for you to meet all your business expenses and take home money at the end of the day. That's your salary above and beyond your overhead expenses. So when you take home that 5k, you still are going to have to pay your taxes, you're going to have to pay retirement and insurance expenses out of all of that money as well. Now you're going to make way more than that a month, but I'm just using those as an example. So you have some numbers to play with in your head. You get to determine in private practice, how much you want your salary to be. That's how we determine how many clients we see what our fee schedule is, how many people you need to work with on a weekly or monthly basis. And all of these things are considered when we're looking at how much you need to bring in to pay yourself a salary and cover that overhead expense. Now some people say medicine shouldn't be a business, but I disagree. I absolutely think it should be ran like a business. In a business. You have employees, you have rent, you have managers and you have inventory. That's a business. Your office manager is overseeing your staff. Your biller is monitoring your insurance reimbursement COVID made some people very afraid to come to the doctor's office. So we implemented telemedicine and that was ramped up as a means of staying in business and staying afloat. Many healthcare practices didn't make it they were unable to pivot quick enough to survive and their margins were so tight that when COVID hit there was just no way for them to recover. And that's a very unfortunate thing. And so in business like any other business, you need to be able to make those numbers work. So you can stay afloat so you can stay alive.
Now, the second model of practice is, once you leave your training, you can go in as an employee practitioner. This means you're employed by a hospital or a clinic. Some hospitals employ practitioners, and they're paid either on production or they're just paid a salary up to a certain amount of collections. Some practices will control what kind of services you provide, in that practice model of employment. So if you're a functional medicine, or an integrated medical practitioner, and you want to provide services such as ozone or IV therapy, you may be very limited in a hospital setting to do that, in a clinic setting maybe a little bit differently depending on who owns that clinic. But these are all things you want to take into consideration when you're taking a paid position as a functional or integrative medical practitioner, because it will, will or can considerably limit the type of care that you actually provide to your patients. Now, if you're a paid, salaried position, usually there's a certain criteria that needs to be met, there's benchmarks that you have to make there's in functional medicine, this means that you'll see more clients if you're in a paid position, then if in a private practice setting, because you need to be able to generate more money. Typically, when we go into a functional or integrative medical medical practice, we want to see less patients we want to see spend more time with them deliver better quality of care. And if you're in a position where it's all about numbers, that's usually because they're billing insurance. And in billing insurance, you have to see more people to make the same amount of money than if you were in a cash practice. Most functional medicine practices that are private are cash based. Some may take some insurance companies, but not others, or they may participate in certain things, but not other things. This is what allows them to see less people and do better quality care, but still be able to make as much money as they want. It's by being a cash based practice.
Now, the third model of care is for you to join a training or an academic position. This means that you're employed by a university or a teaching facility and independent organization of some kind. Or maybe you're employed by a nutraceutical company, and you're doing research and development and training in that such these kinds of positions are available as well. Now, I think the advantages to private practice is that you can make a lot more money in private practice, just because you don't have all these stipulations, and you don't have restrictions in terms of hospital limiting you from different investments that you can be part of consulting agreements that you can be part of, you're also not going to be told how long you can spend with a patient what you can offer them. As far as treatment, you also have an opportunity to make all the money on the various treatment modalities that you recommend for them. You also earn money off of supplement sales, and there's no one owning your intellectual property. If you develop a program or a course and you're working for someone else. Most of the time that intellectual property belongs to your employer. If you're in private practice, all of those things that you develop are your own, you can receive money in perpetuity because of these courses. And because of these things that you're offering. in private practice, you can also earn up to two times more money than working for someone else who's an employee, or a physician, doctor or practitioner in an academic position, sometimes even three times more. We all know practitioners who make more or less than another, every practitioner is different. Every specialty is different. And depending on what part of the country you live in, how big your practice is, are you cash versus insurance? Are you a solo practitioner versus a private practice that has multiple practitioners working for them? It all varies as an owner, you get to take distributions or dividend income on top of your salary. So if you have multiple people that work for you, you get to take salary from what they're earning as well. So that allows your salary to become much larger than if you were in a traditional setting for practice. In general, I really believe private practice providers and doctors make more money they have more flexibility, which means they have more control over their schedule. If it's your or business, you get to decide how many hours you want to work, what days a week you want to work, and how many patients you want to see.
Now, in some practices, you're a 1099 employee. And in that practice, you'll have complete control over your schedule. And how many people you want to see what you know how many hours you want to work, in, what days, the week that you want to work. All of that is up to you when you're a 1099 employee, or you're privately employed because you own the business. So I want you to remember that being in private practice, you still have to meet all your overhead expenses. So I would love to work one day a week, but I can't meet my overhead expenses working one day a week. So I have to look at what are my overhead expenses? How many days a week am I going to work? How many hours am I going to work? How many clients do I need to see to generate that income to cover my overhead expenses and put a profit in my pocket, which then becomes my salary. So you have to look at all of that. Now, granted, your overhead expenses are a taxable write off, and we'll talk about that more in financial parts of our program in different episodes. But it really is a benefit to you to own a practice. For a lot of different reasons, flexibility, income, independence, of how you practice, all of those kinds of things are important. And that's one of the reasons that I went into private practice was I wanted to have an unlimited income potential, I want to have flexibility with seeing my clients how to treat them, when to treat them, how much time to spend with them. And as an employed practitioner, you don't always have that option to have control over how you provide care. But employed, physicians and practitioners aren't safe either. And a lot of times, we think because we're employed, we're getting a regular salary, we're safe. But we all have seen practitioners be let go from their practice, or have their salaries reduced, because they're not seeing the volume of patients that they need to, they're not able to retain patients. There's a whole host of reasons that an employed facility would adjust somebody's salary. And so you don't necessarily have that security as well.
Now, I know there's pros and cons of all these models that are out there. And you have to figure out what's in the best interest for you and your family. So if you're uncomfortable with fluctuations in your income, because in private practice, one month, you may make 20,000, you might make 40,000, then you might make 30,000, but it might be 5000. If an emergency expense comes up or something like that, then you should consider being an employee with a set salary. As a 1099. employee, you have to pay all your own taxes, health insurance, malpractice and retirement, which is normally paid by an employer. If private practices done right, and you're the sole owner of that practice, these things can still be played paid by the business once you're making a profit. There are a lot of different ways that you can be creative about how these expenses are paid. And overall, I think functional medicine practitioners should consider private practice, they can make a lot more money and if planned outright, you can have people working for you so you can work less and still earn a really good salary. So I hope this was helpful episode for you. If you liked it, please share it, hit the like button and subscribe so that you can catch all of our information that we're providing for you on functional medicine practitioners and building a functional medicine business. We'll see you next time.
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