My post about solo practice medicine brought along some interesting comments and trackbacks. In addition to traditional solo practice medicine, there are other models of medicine that are more economically efficient. One such model is the group model of medicine. In this model, several solo practitioners band together to form a “group” to share costs of overhead such as office space, assistants, equipment, and other services.
The group model is attractive for many practitioners because they get to save money on costs. The model is more economically efficient than a solo practice because office space and personnel are always being utilized. For example, a solo practitioner may choose to take one half day or one full day off from work. However during this time, his employees and overhead are still being paid. Thus, the office is not “closed” but is still open and is generating revenue. Banding together with other practitioners allows full utilization of staff and space.
One great benefit of group practice is also the built-in referral base among group practitioners. Typically in a specialty group, all or most of the solo practitioners have a different specialty interest. Thus they can refer patients to each other. This concept is particularly attractive for those fields in medicine who rely on referral from primary care and other practitioners.
An additional benefit may be more purchasing power by belonging to a group. For example, the group may save money on supplies and may negotiate service contracts. Similarly, a group may purchase their equipment and office space because they can pool together the finances of all members of the group.
However, despite all of the benefits of the group practice model of medicine, at the end of the day each doctor is a solo practitioner – essentially their solo practice within a larger group. Thus, the analogies I made in my previous post about solo medicine not being a good business model still ring true – without the key physician employee, there is no revenue.