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A Lean Startup in Direct Primary Care

I’ve been trying to talk a buddy into a Direct Primary Care practice. He is personable, efficient, and knowledgeable and lives in a great city for that particular practice model.

Since one of his fears is the startup cost, I wrote this guide on a lean startup in Direct Primary Care.

It’s not just the startup cost of a DPC practice but also the loss of income. He has a large primary care panel at a major medical group in his town. The work isn’t satisfying, and the people he works with leave much to be desired.

I’ll discuss bridging the DPC practice with some telemedicine work and moonlighting to address the loss of income.

The Direct Primary Care Model

Direct Primary Care is the concept of cutting out the middleman. No insurer and, for the most part, no Medicaid or Medicare. You contract with the patient directly by charging them a monthly retainer. In return, you provide them with all of their healthcare needs.

Your patients will be a mix of those who won’t have any health insurance and those who will have high-deductible health insurance plans.

Almost all of the patients who are interested in DPC care to know their physician personally. They want to know as much about this person as necessary. That’s why I have emphasized branding yourself as a physician.

And patients want access. They want their doctor to be as accessible as Amazon, as accessible as their email account. Texting, calling, video, emailing… their doctor should be one click away.

The DPC Physician

DPC’s name obviously refers to primary care physicians, but there is no reason why a Direct Care practice can’t exist for dentists, gastroenterologists, allergists, dermatologists, sports medicine doctors, nephrologists, and even hospitalists.

Some DPC docs will want to offer a concierge practice. Others want to have a more relaxed patient visit. But all DPC docs will want autonomy over their income, time, and practice styles.

You don’t have to be rich to start a DPC practice. In fact, it’s one of the business models in healthcare which requires very few resources. I should mention here that physicians might be the sort of group who believe that spending more means a higher chance of success.

In fact, I believe that focusing on a lean startup in Direct Primary Care will increase your chance of success. Just don’t be too cheap later to invest in your clinic to help it grow and evolve with your patients.

A Lean Startup in Direct Primary Care

By lean, I am referring to starting your practice for around $10,000. That’s all in, including your overhead and your burn rate.

I started a Virtual Primary Care practice with a DPC subscription model with far less than $10k. But let’s focus on a brick-and-mortar office in this article.

Building out a DPC for $300,000 with all the bells and whistles is certainly possible. But I want to present you with a way to do this cheaply. Not to cheap out but to avoid upfront spending until you have the patient volume to justify future spending.

I’ll present 3 ways to start a DPC practice for very little money.

1. Office-Based DPC Practice

You won’t need a lot of foot traffic for a DPC practice. In fact, it’s probably best to be off the beaten path. This allows you much cheaper rent, easier patient parking options, and less competition.

Your clients will come from other practices, such as specialists. You can contact various groups and tell them what you’re about and what you offer. Or you can market yourself online as I have done with my health coaching business.

You won’t need much more than 500 sqft. And in the beginning, you won’t need a front office person. Those are probably the 2 biggest overheads you’ll deal with.

Legal fees might be around $5,000, including drawing up contracts between you and your patients, the office lease, etc. That’s on the high end. It’s quite possible to do this for around $2,000.

Your malpractice will be quite low. It tends to ramp up as you grow your practice. And many insurers know that DPCs have a lower risk of malpractice.

As for equipment, you can buy used shit damn near everywhere. You can get an EKG machine for $60. Otoscopes and ophthalmoscopes, if you don’t have them, sell used for $25 on eBay.

I discuss a lean startup in DPC because my brother-in-law successfully started his own urgent care for less than $15,000. UCs are much more resource intensive, and you need the buildout to attract more patients. That’s not the case with a DPC.

If you are doing wound cultures and taking Pap specimens, most of your lab contracts will provide these for free. As for medication, those are incredibly inexpensive once you set up a contract with a medical supplier. You’ll get a massive catalog of everything an office needs and can order PRN.

2. A Mobile DPC Practice

To save even more money and to really hone in on what you want your practice to focus on, skip the office and start a traveling practice. You can see patients in their homes, at their businesses, in nursing homes, and at the hospital.

Think of hospice patients, those with disabilities, children with behavioral issues, elderly patients, and busy parents. A decent percentage of this population will gladly pay for the convenience of their own private doctor.

Rural medicine is something I’ve always had an interest in. You can travel to the countryside and care for migrant workers or farmers.

Finally, there is the workman’s comp or employee health model. A large factory or IT site might have a large office out in the middle of nowhere. You could contract with that business and be the doctor for several patients.

3. A Virtual DPC Practice

I believe that a DPC practice works best when you can see your patients in person. But you can start your practice by basing it on a virtual model.

You can find patients who are interested in seeing you. Maybe you can go and meet them in person at a cafe or in their home for that initial meet & greet. After that, many of them might have their needs met through a virtual practice, such as through telemedicine.

This will give you some lead time to decide on what part of town you want to open your practice in. And you’ll figure out the kind of niche practice you might want and the size of the office you’ll want to lease.

Covering Your Overhead

One downside to starting a new practice is that it takes a few months before it takes off. With a FFS practice, the insurance companies will often bombard you with patients; it’s easy to go from zero to 1,000 patients in less than 3 months.

In a DPC, you must go out and actively find your patients initially. Sure, later on, you’ll benefit from a strong word-of-mouth campaign if you are personable and treat your first cohort well.

A big advantage to a DPC practice is that you don’t need a lot of patients. Usually, somewhere around 200-600 is more than enough. This will leave you a lot of time to do telemedicine on the side or pick up urgent care or ER shifts.

Monthly Patient Membership Fee

With 25 DPC patients, you should be able to earn around $3,000 per month and possibly as much as $5,000, depending on your neighborhood and patient population.

With 150 DPC patients, you’re in the neighborhood of $18,000-$40,000/month.

I know that some DPCs only charge $75-100/month per patient. But this is extremely low for what you’ll be providing for your patients. If you can hone your sales technique, you should be able to charge double that amount.

For your healthy patients, they’ll essentially forgo the need for any health insurance. And for the unhealthy ones, you’ll save them a lot of unnecessary testing and far better outcomes than their cattle farm medical group.

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