Recently, I received an e-mail from a pediatrician who had decided to take a sharp turn off the fast lane and open his own micro practice. By rooming his own patients, giving injections, and cleaning the office himself he hoped to keep the overhead so low that he could see only six or seven patients a day and still turn a modest profit. He admitted that he was only a few months into the venture, but he sounded confident that he could make it work.
The downsizing movement seems to have begun in 2001 with Dr. L. Gordon Moore in Rochester, N.Y. His Ideal Medical Practice Model has attracted 500 doctors nationwide, and he suspects that the actual number is probably double that. Dr. Pamela Wible of Eugene, Ore., manages idealmedicalcare.org. Her website lists at least 200 physicians who are presumably enjoying success with micro practice. An article at theoptimist.com, "Ideal Medical Practices," by John Grossman, also addresses the rise of micro practices.
Are micro practices so far out on the fringe that they have no relevance to mainstream care delivery systems? Is slow medicine like the slow food and locavore movements? Does it appeal only to patients and physicians who aspire to live off the grid and grow their own food, and who prefer free-range asparagus? While micro practices are never going to meet the health care needs of the United States, their success should teach us all an important lesson. And that lesson is, "Watch your overhead!"
I practiced by myself for 10 years and enjoyed the satisfaction of being in control. It was certainly not a micro practice, as I often saw 40 or more patients a day. But, I vacuumed the office each morning and touched up the bathroom. I often roomed the patients and gave all the injections. My wife did the books and the billing. Our overhead was in the mid-30’s.
When I joined a group in hopes of recruiting a partner or two, the overhead jumped to well over 60%. However, there was no equivalent bump in the quality of the care. In fact, I suspect most of the families we served felt we had taken a step backwards.
While asking physicians to clean the bathrooms would cause a revolt in most groups I know, there are scores of other strategies for trimming overhead that are never considered. To determine the costs facing your practice, I suggest you begin by asking the practice administrator, "What is our overhead and where is that money going?" Then, follow up with a challenge: "I’ll see 5% more patients in the next 6 months if you lower the overhead by the same percentage."
Even if that sounds like tilting at windmills, the exercise should be instructive. The administrators who agree to accept the challenge will find it difficult to dismantle an overgrown top-heavy organization. The task for a physician in the slow medicine movement, however, should be much easier. He is starting from scratch and can add bits to his overhead only as the need arises.
Have you gone micro or succeeded in trimming excessive overhead in your group? I’m eager to hear what has worked for you, and for you to share that with the readers of Pediatric News.
This column, Letters From Maine, appears regularly in Pediatric News. Dr. Wilkoff practices general pediatrics in a multispecialty group practice in Brunswick, Maine. E-mail him at firstname.lastname@example.org.