February 14, 2014
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BLOG: Is your practice large enough? Part 2

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Read more from John B. Pinto.

The largest single influence on a practice’s development trajectory is doctor ambition and a willingness to risk both capital and colleague jealousy. A gung-ho physician in a tough, doctor-saturated market is generally far more successful than an average doctor operating in a market that is underserved and ripe for conquest. The same competitive instincts that drive some surgeons to the top of their class often lead them to be winners in a raw commercial sense, as well. A manager’s ambition can be more important than the doctor-owner’s, although there are a few managers I meet each year who, in their commendable zeal for the practice, get a little too far out ahead of their doctors. 

Innate market factors rank just after doctor ambition as a growth barrier or enhancer. 

The size of the practice’s market and the number of competing providers critically influence how large a practice can get. A large urban hub has more potential patients. Unfortunately, large markets in population terms are often the most crowded with excess ophthalmologists and optometrists.

 Large markets are also ground zero for managed care competition, which more often than not reduces reimbursement and distributes patients to those doctors who are most willing to capitate — and capitulate — on fees. The result can be a market like Los Angeles, with most practices operating at extremely low profit margins. It’s critical in such practices that subsequent development work be focused on gaining new, higher-margin patient sources.