How much does it cost to run a concierge medical practice?

How much does it cost to run a concierge medical practice?

Running a concierge medical practice costs a lot less than you’d expect. While a variety of factors (location, space size, clientele, etc.) might push your overhead up or down, we’ve got our head around some numbers that will provide a great benchmark for transitioning concierge medical doctors.

First, you’ve got your business model figured out. For family doctors that will depend on the level of service you provide (we’re pushing for industry-wide standard of 24/7-access, unlimited visits, phone/email/social media correspondence and a host of inclusive procedures like setting bones, treating burns and abrasions, and more). We charge $50/mo for a healthy adult, with each doctor seeing 600 patients, and there is comfortable profit margin.

In our post on what equipment you’ll need to start your practice, we went over the prices of some mandatory and optional items. Of course, you could get your practice started on a shoestring budget, doing house calls with a stethoscope, but that doesn’t bode well profit-wise. Alternatively, you could invest more heavily on your space and equipment to create an indelible impression on your initial patients. If you can sustain it, maybe you slowly build your clientele, operating at a break even, or even a loss at first, knowing full well that once you have the clientele you WILL be making money. This is a personal decision based on the type of brand you want to build, your vision for your office, your competition, etc.

We routinely tell doctors that once you’re up and running, the ideal overhead of a lean office is approximately 30% of $360,000 or roughly $120,000 per year (This average gross income is based on a doctor seeing 600 patients at $50/mo + expected tests/labs/prescriptions). Our overhead is based on ~$10,000 per month with staff, half going to rent/utilities, the other half allotted for miscellaneous expenses (office supplies, insurance, prescription cost, machine maintenance, advertising). However, this expense is higher than what it needs to be because we’ve done much more advertising than your practice might actually need to operate at a profit.

The next headache you’ll want some proverbial aspirin for is insurance. You are operating a business and ultimately employing staff. We included this in the “other” half of our $5,000/mo expense. It’s a strange irony since we’re trying to get out of the insurance trap. However, you will need to adhere to state laws regarding employee rights/benefits, etc. If you have specific questions, or find anything troubling in your own research, send us an email. We’ll be glad to provide counsel, and anything we’ve learned from our experience in Kansas.

Lastly, you will need part of that $5,000 to account for staff (not doctors, for now let’s treat them like independent contractors, they make their own revenue and pay you a “fee” for conducting business through your practice). We believe that a concierge practice can function efficiently with one nurse for every three doctors. Even at a handsome salary, you will find that this expense is far less than what you’re dealing with through overburdened staff and third party billing.

More Reading
Kevin MD goes over some winners and losers in the big picture of concierge medicine. Pay attention to his use of the term direct primary care. Although we use the term concierge medicine, he might instead call AtlasMD and the model we’re encouraging “direct primary care.”

Concierge medicine: Winners and losers” | Kevin MD

If you’re in the mood for a more academic guffaw, try this article. While we understand that not everyone can transition to our model, the fact remains: we are making it work, and we’re keeping relatively low overhead. We especially laughed at the line that went, “We might like the idea of a lone Norman Rockwell physician (no one talks about the low overhead of a long-suffering wife doubling as receptionist and book-keeper)” For the record, AtlasMD does not employee any of their wives or husbands in administrative tasks. In fact, everyone pitches in.

“Concierge Medicine: An Answer to the Crisis in Primary Care? Really?” | Samefacts.com

4 thoughts on “How much does it cost to run a concierge medical practice?

  1. Chad Savage, MD says:

    Dear Atlas,
    I emailed earlier, but realized I forgot yo ask about the low cost insurance that you found to work with DPC. As I am planning to open my own DPC, I’d love any information you can share to make it more appealing for my patients.
    Thanks
    Chad Savage

  2. admin says:

    Hi Chad!

    Yes, thanks for your note. We recommend patients maintain a high deductible wrap around insurance plan for emergency situations. We also have an insurance professional on hand to walk our patients through any questions they might have. In addition, here’s a great resource for finding insurance professionals who align themselves with Direct Care in your area: http://iwantdirectcare.com/.

    We’ll reach out directly regarding the insurance plan we use for our clinic – we’d love to help get you started out with a bang!

  3. Josh says:

    I was just wondering how long it takes to gain those 600 patients and what kind of advertising budget did you have?

    • admin says:

      Hi Josh! Podcast #11 is a great resource for your question here. In a nutshell, we accumulated patients over the first few years. In addition, we initially used a grassroots advertising strategy that included some radio and print advertising, but that type of budget isn’t always feasible. Word of mouth proved to be the most effective advertising tool in the end anyway! Getting those first few patients to really see the value you have to offer is key – they’ll tell everyone they know.

      Here’s that podcast link: https://itunes.apple.com/us/podcast/atlas-md/id674138661

      Thanks!

      Atlas

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