The Investment Scientist

Solo Doctors Need to Have an Associate

Posted on: September 25, 2013

ImageI visited Dr. Chu who is a family doctor with a solo practice. He told me EHR is killing him.

He is in his 60s, very comfortable with pen and paper, but now Medicare requires him to record all patients’ records electronically, or he will have to pay a stiff penalty.

So now, in addition to seeing patients for eight hours, he has to spend three hours inputting health records.

I sat down with him and we toyed around with a few potential solutions.

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Hire someone to input the health records.

Impossible! Only Dr. Chu knows the patients’ conditions. He could hire a medical scribe to follow  him around and type as he talks to patients. But in the end, a good doctor still has to review all the input and sign off on it.

Convert to a concierge service.

Dr. Chu has 5000 patients. He could convert to a concierge service and charge $1000 per patient per year. With that model he only needs 500 patients to make more than what he is making now. With fewer patients, he only needs to work two to three hours a day, and he can play golf the rest of the time.

But this is against Dr. Chu’s conscience.  He practices medicine to serve the masses, not the elites. He told me he knew life would be better if he chose this option, but his conscience would not be at peace.

Hire an associate doc.

Dr. Chu has a tiny clinic and does not have much room for expansion. But I still want him to consider bringing on an associate doctor. Someone who can take over the practice five years down the road.

Dr. Chu’s practice brings in over $1m per year in revenue. If he can transition his practice internally to an associate doctor, he may be able to capture .8x gross revenue, or about $800k. If he sells the practice to a outside doctor, the multiple will be half that.

I know Dr. Chu does not care much about money, so I appealed to his sense of responsibility. I told him: “You are over 60 now. Your age and health will not allow you to take such excellent care of all of your patients for much longer. At some point you are going to have to slow down. What about your patients then? An associate doctor would take that weight off your shoulders.”

In the end, Dr. Chu was very glad that he has me as his financial advisor. He is up to his eyeballs with his patients. So much so, that he does not have the time nor the mental energy to think long term. Spending just one hour with me helped him to clarify what moves he should make regarding both his practice and his retirement.

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2 Responses to "Solo Doctors Need to Have an Associate"

Hi Mike,

He should hire a medical EHR scribe for assistance.

More info here:
PhysAssist Scribes for eMRs [Necessity or Frivolity?]
http://medicalexecutivepost.com/2011/01/05/physassist-scribes-for-emrs-necessity-or-frivolity/

This seems a necessity for him.

Ann Miller RN MHA
[Executive Director]
http://MedicalExecutivePost.com

Thank you Ann, I forwarded the link to my client.

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC. He is also a regular contributor to Morningstar Advisor and Physicians Practice. To explore a long-term wealth advisory relationship, schedule a discovery meeting (phone call) with him.



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