What Payroll Option Should I use for my Direct Primary Care Practice?

Payroll for your direct primary care practice can be scary - for most doctors who start a direct primary care practice, this is the first time paying themselves and it’s their first time paying employees.

But, don’t be scared any more! By the time you finish this blog post, you will have a good idea of how to pay your employees in a reasonably easy way.

All the options

There are several payroll options available for small business owners, including:

1. Manual Payroll: This involves calculating and processing payroll manually using spreadsheets or paper-based systems. While this option is low-cost, it can be time-consuming and prone to errors. I strongly recommend against doing this. Your time is WAY better spent taking care of patients or growing the business. Unless you have a background in accounting, do not do this.

2. Payroll Software: Payroll software can automate the payroll process, including calculating wages, taxes, and deductions. There are several software options available, ranging from simple and low-cost solutions to more advanced platforms with additional features such as time-tracking and benefits administration.

   One example of a payroll software is Gusto. Gusto offers a cloud-based payroll platform that automates the payroll process. It includes features such as direct deposit, tax calculations, and benefit administration. Gusto also offers time-tracking and HR features, such as onboarding and document management. Small business owners can choose from several pricing plans based on the number of employees and the features they need. Payroll software like Gusto is a good option for small businesses that want to streamline their payroll process and have more control over the payroll function.

3. Online Payroll Services: Online payroll services provide a cloud-based platform for managing payroll. These services often offer features such as direct deposit, tax filing, and time-tracking. Online payroll services are typically easy to use and affordable, making them a popular choice for small businesses.

   An example of an online payroll service is ADP. ADP offers a cloud-based payroll platform that provides payroll processing, tax filing, and compliance management. ADP also offers HR features such as time and attendance tracking, employee benefits, and talent management. Small business owners can choose from several pricing plans based on the number of employees and the features they need. Online payroll services like ADP are a good option for small businesses that want a simple and easy-to-use payroll solution, without having to invest in additional software or hardware.

   Options 2 and 3 have some overlap because Gusto can be completed online (without downloading a software suite). Other companies that offer payroll software include QuickBooks, PayChex, Xero, and others.

4. Accountant or Bookkeeper: Small business owners can also outsource payroll to an accountant or bookkeeper. These professionals can handle all aspects of payroll processing, including calculating wages, taxes, and deductions. While this option can be more expensive than other options, it can provide peace of mind and ensure compliance with tax laws and regulations.

5. Professional Employer Organizations (PEOs): PEOs are third-party companies that manage HR and payroll functions for small businesses. They offer a range of services, including payroll processing, benefits administration, and compliance management. PEOs can be a good option for small businesses that need comprehensive HR services. If you want to completely outsource payroll and benefits, you’d use an option like this. i don’t know any DPC doctor who uses something like this, as larger businesses would use this option.

It's important for direct primary care doctors to consider their specific needs and budget when selecting a payroll option. They should also consult with a financial professional or tax expert to ensure compliance with tax laws and regulations.

What we use at Plum Health DPC for Payroll

When I started my DPC practice and hired my first employee, I had a really hard time with this. It was more of a mental barrier than anything. I ended up picking Gusto because they have a really nice user experience/design on their website.

I ran payroll for a year using this, but my account found that Gusto was NOT paying my taxes accurately, so we had to put some extra money in at the end of the year. After discovering this, we switched to “RunPayroll”, an online-based platform. I now submit payroll via RunPayroll and my accountant checks on it quarterly.

I pay $62 monthly for accounting, $250 quarterly to my accountant for them to review my books and make sure that all of my expenses are categorized perfectly, and about $1,800 annually for tax preparation for myself and for my business.

DO I NEED A PAYROLL COMPANY IF I’M THE ONLY EMPLOYEE?

Usually you don’t need a payroll company if you’re the only employee in your direct primary care practice. Once you hire another doctor or a medical assistant, you’ll need to set up an account with a payroll company so that they can help you keep track of payroll taxes.

If you’re a solo doc and if you have an accounting software like Quickbooks, you can pay yourself through an owner’s draw. This is a simple way of paying yourself when you’re just starting out.

When you take an owner’s draw, you should set aside 40% of that owner’s draw for taxes. You will likely pay 25% to 35% of your Net Operating Income in taxes, so be mindful of these numbers. Your accountant should be able to calculate the amount of taxes that you need to pay each quarter.

With quarterly income taxes, you will mail up to three checks to your city, state, and the federal government from the money you make during that period. Here in Detroit, Michigan, we have city taxes paid each quarter (about $125) and state taxes paid each quarter (maybe $1,250). This is usually an estimate. If you over estimate, you could get money back during tax time or have a small tax bill. If you under estimate, you could owe a larger balance during tax time.

I hope this was helpful, and best of luck with your DPC practice!

- Dr. Paul Thomas with Plum Health DPC in Detroit, Michigan.

Can a Direct Primary Care Practice go from $1,000,000 in Annual Revenue to $10,000,000 in Annual Revenue?

Can a Direct Primary Care Practice go from $1,000,000 in Annual Revenue to $10,000,000 in Annual Revenue?

Direct primary care is a growing business practice in primary care. Many doctors start successful practices by recruiting about 400 or 500 patients and having them pay $60 or $80 monthly. With these examples, it’s easy to see how a doctor could earn $288,000 in annual revenue up to $480,000 in annual revenue. Now, if there are two or three doctors in a practice, it’s easy to see how one office can generate $1,000,000 in annual revenue.

As a side note, annual revenue does not mean take home pay. Doctors have to account for overhead expenses like rent, paying employees like medical assistants, and paying for labs, medications, and other services vital to the clinic’s function.

All that being said, what would it look like to take a DPC practice from $1,000,000 in annual revenue (a big achievement) to $10,000,000 in annual revenue? That’s what I want to explore in this blog post:

How to grow from $1,000,000 in Annual Revenue to $10,000,000 in Annual Revenue?

Growing a business from $1 million to $10 million in annual revenue can be a significant challenge, but it can be done with the right strategy, hard work, and execution. Here are some steps that can help:

1. Define your target market: Identify the specific segment of customers that you want to target and tailor your products or services to meet their needs. This will help you to more effectively reach and retain customers, and drive revenue growth. In the case of DPC, you need to have a very strong customer avatar - what does your typical customer look like?

2. Increase sales and marketing efforts: To grow revenue, you'll need to increase your sales and marketing efforts. This could involve expanding your sales team, improving your marketing materials and campaigns, and leveraging technology to reach new customers. Beyond blogging and SEO, your DPC practice might need to hire someone to recruit new patients for you.

3. Offer new or complementary products or services: Consider offering new products or services that complement your existing offerings and appeal to your target market. This can help you to tap into new revenue streams and increase overall sales. It could be a line of supplements, or a weight loss program, or BOTOX or other programs to increase revenue.

4. Enhance your customer experience: Providing excellent customer service and a positive customer experience can help you to retain existing customers and attract new ones. Consider implementing customer feedback programs and investing in training and development for your customer service team. Even a 1 hour lunch and learn about improving the customer experience could go a long way in growing your practice.

5. Leverage technology: Technology can help you to streamline processes, reduce costs, and improve efficiency. Consider investing in technology that can automate repetitive tasks, improve customer engagement, and drive growth. As doctors, this tends to be a blind spot for us.

6. Expand your geographic reach: Consider expanding your business into new geographic markets, either through physical expansion or through online channels. This can help you to tap into new revenue streams and increase overall sales. I think this is the easiest to understand for DPC doctors - you probably need to go to the other side of the city or to the next town over or even the next biggest metro area to grow your business.

7. Foster a culture of growth: Encourage your employees to take ownership of the growth of the business and to continuously look for new ways to improve processes, increase sales, and drive revenue growth. What if you incentivized your employees to bring on new patients?

These are some of the steps that can help you to grow your business from $1 million to $10 million in annual revenue. It's important to develop a comprehensive and well-executed plan and to stay focused on your goals.

Thanks for reading, and good luck starting and growing your direct primary care practice!

-Dr. Paul Thomas, MD with Startup DPC

Key Performance Indicators for your Direct Primary Care Practice

Key Performance Indicators for your Direct Primary Care Practice

Key Performance Indicators or KPIs are the important markers for your success or failure in direct primary care or any business for that matter.

If you have satisfied patients, that’s great - but can you measure patient satisfaction? If you are managing your diabetic patients with excellent care, that’s good, but can you measure the average a1c in your practice? What about total revenue and percentage of revenue collected?

When you start a DPC practice, you may not think about these KPIs at all, but as you grow and become more sophisticated in your DPC practice, these KPIs may become more and more important, especially if your aim is to scale your business or evaluate the effectiveness of a new hire, either a physician or medical assistant.

Just as you take vital signs from your patient to measure their health, so too can you take KPIs from your business to measure the health of your practice.

The most important Key Performance Indicators (KPIs) for Direct Primary Care (DPC) practices can include:

1. Patient satisfaction: Measured through surveys or interviews, this KPI assesses how satisfied patients are with the quality of care and services provided by the DPC practice.

2. Retention rate: This KPI measures the percentage of patients who remain with the DPC practice over a given period of time.

3. Revenue: This KPI measures the income generated by the DPC practice, which can include membership fees, additional services, and lab tests.

4. Utilization rate: This KPI measures the number of patients who use the DPC practice's services, such as office visits and telemedicine consultations.

5. Quality of care: This KPI measures the quality of care provided by the DPC practice, including clinical outcomes, patient safety, and adherence to best practices.

6. Staff satisfaction: It's important to measure the satisfaction of the staff with their job in order to keep them motivated and engaged.

7. Net Promoter Score (NPS): This KPI measures the likelihood of patients to recommend the DPC practice to others.

Making Donations as a Direct Primary Care Practice

Making donations as a direct primary care practice

This year, we made many donations to local charities in our community, from $100 to $1,000, gifts can be impactful and go a long way, especially in a small town or a close-knit community. As physicians, we have an obligation to give back, to enrich the lives of others. Some of my favorite categories to give to include health and wellness, children and families, and recreational activities.

A shout out from a company that we donated to this year.

For your direct primary care practice, donating to a local charity can build good will for your practice in several ways. First, it demonstrates that your DPC practice is invested in the community and cares about the well-being of its residents. This can help to create a positive image for your practice and your physicians and improve your overall reputation.

Additionally, by supporting a local charity, your DPC practice may be able to build relationships with community members who may become customers or advocates for the business. Even if the folks at the charity don’t sign up for your practice, they will likely spread the good word about your practice to the people that they serve.

Finally, it can also show employees that your DPC practice is socially responsible and that you care about making a positive impact. This can help to boost employee morale and engagement. It’s a great way to boost engagement to work with your teammates, physicians, and staff to pick a local charity that you want to support. You could have everyone chip in and provide a match in addition to a baseline gift.

Good luck with your DPC practice, and happy giving!

-Paul Thomas, MD with Startup DPC

Our Most Popular Startup DPC Courses

Direct primary care (DPC) is an alternative model of primary care that is gaining popularity across the United States. It emphasizes a personalized, patient-centered approach to care and eliminates the need for insurance. However, starting a DPC practice can be challenging. That's why we've developed multiple courses to help you along the way.

Our first most popular course, "Writing a Business Plan for a Direct Primary Care Practice," provides you with the tools and knowledge necessary to create a comprehensive and effective business plan. This includes understanding the DPC model, financial management, and how to attract patients to your practice.

Our second most popular course, "Attracting Patients to Your Direct Primary Care Practice," focuses on marketing strategies for DPC practices. It covers topics such as building a website, social media marketing, and community outreach.

Both of our courses are designed to help you navigate the challenges of starting a DPC practice and provide you with the knowledge and skills necessary to succeed.

Our courses are designed for doctors who are interested in starting a DPC practice, or for those who are looking to grow and improve an existing practice. They cover the most important aspects of starting a DPC practice, from writing a business plan to attracting patients.

We understand that starting a DPC practice can be a daunting task, but with the right knowledge and skills, it can be a successful and rewarding experience. Our courses are designed to give you the tools and support you need to achieve your goals.

If you're interested in starting a DPC practice or want to take your existing practice to the next level, our courses are a great place to start. Sign up today and take the first step towards success.

We are especially happy when we get feed back and reviews like this one:

Building Your Personal Brand as a Direct Primary Care Doctor

As a direct primary care (DPC) doctor, your personal brand is an important part of your professional identity. It helps to set you apart from other family medicine doctors, urgent care centers, and hospital systems in your area, and can attract new patients to your practice. Here are some tips for building and promoting your personal brand:

1. Define your unique value proposition: What makes you different from other DPC doctors? What are your areas of expertise, and how do you approach patient care differently? By identifying your unique value proposition, you can better communicate the benefits of your practice to potential patients.

2. Develop a strong online presence: In today's digital age, it's essential to have an online presence that showcases your expertise and personality. This can include a website, blog, and social media profiles. Be sure to regularly update your online profiles with relevant and engaging content, and consider using SEO techniques to increase your visibility.

3. Engage with your community: Building relationships with your patients and other healthcare professionals in your community can help to establish your personal brand and reputation. Consider speaking at local events, joining professional organizations, or volunteering your time and expertise to organizations in need.

4. Utilize patient testimonials: Patient testimonials can be a powerful way to showcase the value of your DPC practice. Encourage satisfied patients to share their experiences online, and consider featuring these testimonials on your website or social media profiles.

By following these tips, you can effectively build and promote your personal brand as a DPC doctor. This can help to attract new patients and establish your reputation as a trusted and competent physician.

You Have a Business When You Have Your First Customer

What Does it Take to Start a Business?

This week, a friend asked about next steps for starting a new direct primary care business.

For smart people who’ve never started their own business, people like young doctors, young lawyers, or young dentists, graduating from medical school or professional school and entering the work force, it can feel like the only option for you is to get hired by a big firm or to join an existing practice.

But, you have to know that you can start your own business - and that’s the point of this blog post!

So how do you know when you have a business? When someone tells you that they want to pay you, yes you directly for your services, you have a business. For example, if a neighbor lady asks your son or daughter to mow their lawn, your child has a business. If that same neighbor wants to hire you as their doctor, you now have a business.

In short, you have a business when you have your first customer.

You Have a Business When You Have Your First Customer

Now that we know what makes a business, how do you capitalize on that business? Meaning, how do you legally accept payments from someone as a business, and not as an individual?

1.) Register for a PLLC - your PLLC can be anything, ours is "PLUM HEALTH PLLC" but we're doing business as (dba) Plum Health DPC. You could be Fred’s PLLC and dba "Smart Street Health", or Karl’s Dad's PLLC and dba Cool Dad DPC etc... The PLLC tells the state government that you have a business. Here in Michigan, we register PLLC’s, but it may be different in your state.

2.) Get an EIN from your accountant - once you register your PLLC, get the EIN from your accountant. This is a unique number that is essentially a social security number for your business. You need it to open any major accounts, including a bank account. From the IRS:

An employer identification number (EIN) is a nine-digit number assigned by the IRS. It's used to identify the tax accounts of employers and certain others who have no employees. The IRS uses the number to identify taxpayers who are required to file various business tax returns.

3.) Set up a bank account! I started mine with $90 that I had in my pocket:

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A post shared by Paul Thomas MD (@plumhealthdpc)

4.) Deliver services - this could be refilling a medication, performing a physical exam, performing a Beck’s Depression Inventory, or giving a joint injection. Never underestimate how much value you can provide for patients with your brain and your stethoscope. As your company grows and as you refine your services, you’ll be offering more services and broader services. But for now, focus on getting started rather than having everything that you could possibly need to start.

As an example, I didn’t have an office when I first started - I started by making house calls for the first 2 months of my business. I also didn’t have an EKG machine when I started, but I bought one within 3 months of starting. I didn’t have a spirometer when I started, but I bought one within 5 months of running the business. As you get more revenue, you can use that extra revenue to make your services more robust.

5.) Track payments. This could be as simple as a spreadsheet with a Microsoft product or a Google Doc spread sheet, or it could be a more sophisticated product like QuickBooks or FreshBooks. I started during my first two months using Microsoft Excel to track revenue and expenses, but it was tedious! I quickly switched over to QuickBooks and I’ve never looked back. Often times, these companies will offer a free 30-day trial or a discounted fee for the first 3 months - it makes taking the leap easier. If you hate the service or the product interface, you can always switch companies!

NOW GET OUT THERE AND GET MORE CUSTOMERS.

Have a great weekend,

- Paul

P.S. If you enjoyed learning this material and if you want to take the next step, please check out the Startup DPC book - there’s a step-by-step guide on how to start your direct primary care practice in the book

Additionally, check out the Business Plan Course where I take a deep dive and show you how to write a business plan that will help you grow your direct primary care practice, starting with a written foundation.

How Does Direct Primary Care Make Sense from a Numbers Perspective?

How Does Direct Primary Care Make Sense from a Numbers Perspective?

Lots of people want to know how direct primary care makes sense for doctors from a numbers and earnings perspective. This came up on Twitter today and I was mentioned in one of the responses. Here’s the original question:

I’ve been trying to wrap my head around how DTC healthcare can make $ bc the margins are low. The only way it makes sense to me is if you expect low utilization of services, whereby an ongoing retainer (subscription) is not redeemed often or pt requires very little management.

I responded with the following:

we use a membership model for health care - we take care of about 450 patients per doctor and charge about $60 monthly. A family doctor can make a typical salary if they keep their overhead low. I love DPC and we’re able to serve an HPSA in SW Detroit with our clinic

Dr. Albert - we use a membership model for health care - we take care of about 450 patients per doctor and charge about $60 monthly. A family doctor can make a typical salary if they keep their overhead low. I love DPC and we’re able to serve an HPSA in SW Detroit with our clinic pic.twitter.com/j5WX0Xa4QD

— Paul Thomas, MD (@PlumHealthDPC) October 6, 2022

I added the following:

I have about 450 patients - I see my patients 3 - 4 times each year on average. I see about 4 - 8 patients in a typical work day. Our #PlumHealth clinic is in SW Detroit and we serve an underserved community with affordable and accessible healthcare #directprimarycare #detroit

I have about 450 patients - I see my patients 3 - 4 times each year on average. I see about 4 - 8 patients in a typical work day. Our #PlumHealth clinic is in SW Detroit and we serve an underserved community with affordable and accessible healthcare #directprimarycare #detroit pic.twitter.com/AZQJqDcdMX

— Paul Thomas, MD (@PlumHealthDPC) October 6, 2022

Thanks for reading and watching, and have a great day.

-Paul Thomas, MD with Startup DPC

Dr. Paul Thomas at Pearls for Primary Care Conference

Dr. Paul Thomas at Pearls for Primary Care Conference

Today, Friday September 30th 2022, I was invited to give a presentation on Direct Primary Care for my family medicine residency program. It is a great honor to be invited to this conference to speak about Direct Primary Care and my practice, Plum Health DPC.

This was a great day of lectures and learning and it was truly a privilege to be invited as a speaker in this environment. My talk focused on the Direct Primary Care model. We went through the following learning objectives:

• Define and understand direct primary care as a financial payment model for primary care delivery

• Discuss the details of the direct primary care model for physicians and for patients

• Highlight the growing number of direct primary care doctors in Michigan and why more physicians are choosing the direct primary care model

• Demonstrate how to start and grow a direct primary care practice in Michigan

There are many challenges in our current fee-for-service system. The biggest challenge being that doctors and patients don’t have enough time together to fully address the health concerns of the patient. This can lead to burnout and a less-than-fulfilling practice of medicine.

The direct primary care model helps patients by lowering the cost of care and allowing for doctors to have more time with their patients to build meaningful relationships and address concerns fully. These trusting relationships can lead to better health outcomes as doctors can spend more time on motivational interviewing to help patients lose weight or taking the time to discuss the pros and cons for vaccines and helping people protect themselves from vaccine-preventible diseases.

Oakwood Annapolis Family Medicine Residents Who Are Direct Primary Care Doctors

Interestingly, several Oakwood Annapolis Family Medicine Residents have taken the leap to start or grow their own direct primary care practices. I have had the great privilege of consulting with some of these doctors and I am always rooting for their success - I believe strongly in the direct primary care model, and the ability of the model to support independent practice and uplift the doctor-patient relationship.

That being said, my residency colleagues who are now in a Direct Primary Care practice include:

• Paul Thomas, MD with Plum Health DPC in Detroit, MI

• Joe Bacala, MD with Quill Health Direct Primary Care in Las Vegas, NV

• Remmya Nair Reddy, MD with Our Family Doc DPC in Alpharetta, GA

• Nabaa Zalzala, DO with My First Family Clinic in Alpharetta, GA

• Jeff O’Boyle, DO with Beyond Primary Care in Ann Arbor, MI

What Makes a Great Domain Name for a Direct Primary Care Practice?

What Makes a Great Domain Name for a Direct Primary Care Practice?

When you start a business, you need to have a great brand name that’s easy to pronounce, easy to spell, easy to type, and easy to find online.

You don’t want to pick something so common that it will be confused for another brand. For example, don’t pick Apple Clinic or Apple Health - there’s a lot of “Apple”s out there - Apple computers, Apple records, Fuji Apples, Granny Smith Apples, etc…

You also don’t want to pick something that is so uncommon as to be confusing or so esoteric that only a few people will understand. For example, “Salus Health” might be cool if you’re a Latin Scholar, but for the average person, they may have a hard time pronouncing, remembering, or spelling this name.

I recently took a course on improving my presence online, and they had this great table for what makes a great domain name for your direct primary care practice.

Here’s a handy guide to helping you pick a great domain name for your direct primary care practice.

For us, I’ll break down the pros and cons of using “PlumHealthDPC.com” for our business.

1. Easy to type

   • Yes, PlumHealthDPC.com is relatively easy to type - there are about 13 letters

   • I would have preferred PlumHealth.com, but that domain was already taken

   • The idea here is to keep it simple, “DPC” is hard to communicate over the phone, so in general I would avoid including “DPC” in the name

   • Better domains for our practice would have been “PlumMedical.com” or “PlumClinic.com”

2. Includes Keywords

   • Our name includes “Health” so that’s a plus

   • We could have been “Detroit Primary Care Clinic” or “DetroitDirectCare.com” but these get a little too long, and I don’t want to be confined to Detroit only - I would like to expand at some point beyond Detroit, so I don’t want to use “Detroit” in our name

3. Available online and in real life

   • The great thing about Plum Health DPC is that it’s available as a business name and it’s available as a web domain at www.PlumHealthDPC.com

   • We registered our LLC as Plum Health DPC

   • There are no other companies nationwide called Plum Health

   • There is a local Plum Market, but at the time that we started, it had no locations in Detroit or Wayne County

4. Reflects your type of business

   • Yes, Plum Health DPC reflects our type of busines

   • BUT not everyone knows what DPC or Direct Primary Care is

   • People generally understand that we’re a health care company, clinic, or primary care office by our name

5. Protects your brand

   • In addition to PlumHealthDPC.com, we bought PlumHealthDetroit.com, which redirects to the former web address

   • So, if we’re on the phone with a prospective patient and they can’t understand “DPC”, we tell them to go to PlumHealthDetroit.com

I hope this helps as you brain storm your brand name and domain name!

-Dr. Paul Thomas with Plum Health DPC and Startup DPC