By Michael Tetreault, Editor-in-Chief, Author, Host, The DocPreneur Leadership Podcast
There are two commonly used phrases which we have observed over the years in Direct Primary Care (DPC) that are quite frankly, over used in DPC today.
You’ve likely used them yourself. I know I have. It’s hard to have a conversation without using them. I must admit I’m guilty as well. I’m also betting you have even heard a colleague refer to them in the past week or two if you’re in this exploratory journey. Those commonly used phrases and terms are:
- “A rising tide lifts all boats.” and,
- Business Model
First, according to Wikipedia, which we all know and love says the aphorism “a rising tide lifts all boats” is associated with the idea that an improved economy will benefit all participants, and that economic policy, particularly government economic policy, should therefore focus on broad economic efforts. The US English Dictionary states this idiom was coined by John F Kennedy and describes the idea that when an economy is performing well, all people will benefit from it.
Second, the Oxford Dictionary defines the term Business Model as a noun meaning a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.
The two words, from our vantage point, here at The DPC Journal that we often don’t see used enough are:
- Value Proposition; and,
So today we’ll discuss the three questions which your DPC business model must answer, how and why ‘Value Proposition’ and ‘Purpose’ play a more important role in your personal and professional development in DPC than the platitudes you’re used to hearing.
If you can answer these questions prior to starting your practice on day number one, you’ll be setting yourself up for long-term success in a great niche industry. And, you’re patients will appreciate the work you put in early rather than later as well!
3 Questions Every DPC Physician and Their Business Model Must Answer
A good DPC Business Plan, especially because funding for your idea is probably quite scarce and you have more ideas than capital, should start by answering these three basic questions.
- Why would someone want to buy something from you? Identify your customer [eg Patient] value proposition. You’d be misleading yourself as a new, possibly young, Physician-CEO to think that simply because you have a medical degree and a business name that Patients will automatically swarm the lobby of your new practice. That might be what initially helps them find you, but you won’t keep them very long if medical expertise is the only value you provide. Patient surveys year after year according to our new and prospective DPC patient surveys find that more than 8/10 new or prospective Patients want a Physician they know, like and trust. Second, the number one reason Patients leave a DPC practice, unfriendly staff and uncaring Doctor. And finally, these same Patient surveys are also finding that cost isn’t the number one or even number two or three reason which these new or prospective Patients stay with you. It’s relationship. Cost is actually number four on the list. Dead last if you can believe that, and I already know there are some of you reading this thinking I’m crazy. But, the numbers don’t lie.
- How will you make money selling it? Articulate your profit model. This is one of the most important and time consuming steps. The DPC space is vehemently independent. Physician’s over the past five to seven years we have interviewed are saying they’re more apt to DIY their DPC startup, fund the costs through their 401K’s and other personal assets than to seek the assistance of CFPs, AIFs, or healthcare business consultants. Often, a tension arises when we all face unexpected questions in the planning and exploration of a new idea. It should signal a need to . . . pause. When that pause, that break, the moment you step back and get some perspective from outsiders happens, there’s a question you need to ask yourself. What made you decide to choose one option over the other? Often, DPC peers or enthusiastic conferences can ramp up our expectations and cause us to feel like this is a cake walk. When it comes down to it though, people outside DPC can also help make us aware of the issues in our decision-making. They’ll help you articulate your profit model, refine your value proposition and make better, wiser decisions. So to close, who are the people in your life that you’ve given permission to ask you about those tensions? Remember, they shouldn’t all be people who will tell you what you want to hear. Paying attention to the voices around you now may be what keeps you from making a decision you’ll regret. Really get granular and detailed in this process. If it takes time, good. You’ll be glad you invested the sweat equity and wrestled with the mental challenges embedded in these questions in the end!
- How many Patients need to “buy” or “subscribe” in order to become profitable? Budgets are involved here. Forecast out six, twelve and 24-months out. You should also include expenses, hard costs, growth assumptions, where, when and how you will be selling and marketing your practice. This isn’t always a one and done spreadsheet. What if there’s a recession? What age group or patient demographic are you going to attract? “If you build it they will come …” is a great movie line, but it’s a terrible business strategy.
The Bottom Line
It’s important to note here that we’re not poo-pooing your idea or discouraging your entry into DPC. In fact, is the opposite. We want to see you succeed. We want more Doctors following their entrepreneurial vision to help their communities and DPC is one great delivery vehicle that can help.
From our vantage point having written, interviewed, spoken nationally, internationally and for years now observed, polled and even surveyed this space, our perspective is different, and that’s okay. Our perspective comes out of having seen great successes born. But, there are just as many failures and crash and burn stories as successes in DPC. You don’t hear about those stories for a number of reasons. Physician’s fade away, the practice closes in 90-days or the business model never really got past the point of moonlighting. Those often sad stories are practices that aren’t supported properly early on, in the middle or in the end. They’re great Physicians with incredible hearts, but for whatever reason, the value proposition and purpose was quite possible replaced with my business model is this … and a catchy movie line. I truly hope there are more options and Physicians in the future like you with the drive and vision to do so when my kids are my age.
One last point we should also emphasize if you’re cautiously examining DPC for your career or future is a common phrase you may have heard echoed in the hallways or mentioned from the podium in the DPC industry events. That is the phrase ‘If you’ve seen one DPC practice, you’ve only seen one DPC practice.’
While these terms, phrases and the occasional platitude may be truthful, they aren’t particularly helpful. And, there’s a difference between being truthful and helpful.
The Oxford Dictionary defines the adjective truthful as … characterized by accuracy or realism; true to life.
The Oxford Dictionary defines helpful as … giving or ready to give help.
There is quite a bit of well, enthusiastic and at times, loud consensus on what every DPC business model should include.
However, there is beauty in the diversity of DPCs offering. It is quite frankly why we’re excited about it it’s future. It is taking on all types of challenges and healthcare provider career ailments. But recognize that there are different pathways to get where you want to be. Ask yourself the next time you’re seeking advice … Is this advice or insight helpful or truthful. Place weight in both but make you’re own decisions, don’t follow the crowd. Some feel a DPC subscription offering should cover every detail of the patients care. While others believe it should simply answer their questions and move on. Be unique!
Different personalities attract certain Patients and it can take one Physician more time than another to startup their DPC practice. Maybe they come to find out that it’s not DPC they wanted. They simply just needed to realize what other healthcare delivery vehicles are out there. That’s okay too.
The amount of intentionality you put towards your vision will help it become a reality. Walk in eyes wide open with a plan so that when storms in the forecast occur, you’ll be better prepared to weather the storms.
Here’s another free piece of business insights Physician’s have shared with us over the years … “This isn’t a race to the bottom and DPC has a tendency to think everything that matters is how we can decrease cost to the Patient. It’s not about being the cheapest. ‘Discounting doesn’t grow margins like purpose does.'”
One of our recent speakers at our sister publication, Concierge Medicine Today said at the 2020-2021 Concierge Medicine Forum “When the goal of the business is survival, it sounds a lot like ‘That’s not how we do it around here.'”
And that is precisely why Patients left their last Doctor in the first place. What kind of relationships do you want to establish with your Patients for long term sustainability? What key activities do you need to perform each week? What resources you need to have to create/deliver/capture value? And finally, what key partners do you need to do all this?
Do you have any additional items that are must haves for a business model? We’d love to hear your thoughts. Share your thoughts on this topic in the comment section.