Without question, choosing a business model for your allied health practice is one of the most consequential decisions you will make in terms of your ability to generate income. When it comes to an allied health practice, you’ll need to choose between a group practice model and a super group model. Each has its own benefits, but your choice ultimately affects how you’ll approach management and business insurance for allied health. Let’s examine each of them more closely.
The Group Practice Model
In most cases, a small group practice consists of three to five practitioners who pool their resources to work together. They share in the decision-making and can be quite successful when their specialties complement one another. If they share a facility, the consolidation of staffs and other resources removes some of the administrative burdens from group members, which frees them up to spend time delivering professional services and helping to improve the practice's bottom line. They are able to maintain a strong degree of control over operations.
Compared to a solo practitioner, group practices are in a much better position to negotiate deals with health care systems and insurers. The group practice also generally has better access to patients than solo providers. Income potential is quite good too—though not as good as the following model.
The Super Group Model
Operating more like a corporation, the super group model requires practitioners to relinquish a large measure of control. This scheme also necessitates a higher level of management expertise, and the initial costs are greater. However, the potential for income dwarfs that of the group practice model.
The super group can take on private investors to mitigate some of the startup expenses, but this also means handing the reins over to a board of directors selected by the shareholders. If this is sounding like big business, it is. Revenues typically exceed $50 million annually. Because of this, the super group model also creates an outstanding exit strategy should you ever tire of working in it: You simply sell your shares and move on to your next idea.
On the other hand, shareholders mean a constant quest for growth and a lot of pressure to be profitable. You’ll need to maintain a strong reputation in the investment community and you’ll need a chief executive officer who is well respected in those circles. Anyone who has functioned within this model will tell you it takes a lot of patience and emotional distance, as well as time and energy. But it’s also one of the most lucrative models practitioners can employ.
With all of that said, choosing a business model for your allied health practice really comes down to your values and how involved you want to be in the day-to-day running of your affairs. Yes, there is lots of money to be made in the super group model, but you can live quite well employing the smaller group practice model too.
Either way, you’ll need strong business insurance for allied health practices. Use CoverHound to find the best coverage—for free!