Types of Medical Practices

Models of practicing medicine across the world can broadly be classified into the following three categories:

Whether we evaluate the medical practitioners or people associated with the medical profession, they can be categorised into either of the three practice forms above.

Solo Practice

A Solo Practice is made up of an independent professional. The independent professional may have a team of members(largely as employees on fixed pay and some on an incentive basis). However, largely the practice is made up of the patients of the solo practitioner.

When the solo practitioner is on vacation, the medical work is bound to be severely affected in her absence. As a count, small setups with one owner and many consultants or employees form up most of the healthcare delivery setups in the world.

Advantages of Solo Practice	Disadvantages of Solo Practice
Autonomy: Decision-making is centralized to one person and that creates a form of autonomy that doctors crave the most.	Autonomy: Decision-making is centralized to one person and that creates a form of autonomy that doctors crave the most.
High Margins: As the structure is less complex, it has lesser overheads resulting in high margins. Margins are percentage of profits and not volume of profits.	Work-Life Balance: Unless the sole practitioner is totally content with what she gets over standard work hours, the work hours and workdays are extremely stretched for a solo practitioner.
Competitive: As a consequence of the above, solo practices continue to remain competitive in the terms of the pricing of their services.	Slow Growth: Growth in technical terms, investment in equipment, as well as financial growth are slow. Generally, the sole practitioner is so busy managing the setup that she hardly gets the time to update their knowledge (by way of a sabbatical or fellowship), or by investing in the latest equipment (as the return is not seen) and financial growth (as the above two are not achieved) and the chicken-egg conundrum continues. The solo practice sustains but does not grow exponentially.
Family Succession: While nepotism may not really be an advantage, passing on the privilege of the practice to the next generation is the easiest in solo practice.	Administration: One of the biggest disliked areas of operations in solo practice is administration. It includes functions such as documentation, TPA coordination, people, and various other admin functions, which take a lot of time and energy of the solo practitioner.

Advantages of Solo Practice

Disadvantages of Solo Practice

Autonomy: Decision-making is centralized to one person and that creates a form of autonomy that doctors crave the most.

High Margins: As the structure is less complex, it has lesser overheads resulting in high margins. Margins are percentage of profits and not volume of profits.

Work-Life Balance: Unless the sole practitioner is totally content with what she gets over standard work hours, the work hours and workdays are extremely stretched for a solo practitioner.

Competitive: As a consequence of the above, solo practices continue to remain competitive in the terms of the pricing of their services.

Slow Growth: Growth in technical terms, investment in equipment, as well as financial growth are slow. Generally, the sole practitioner is so busy managing the setup that she hardly gets the time to update their knowledge (by way of a sabbatical or fellowship), or by investing in the latest equipment (as the return is not seen) and financial growth (as the above two are not achieved) and the chicken-egg conundrum continues. The solo practice sustains but does not grow exponentially.

Family Succession: While nepotism may not really be an advantage, passing on the privilege of the practice to the next generation is the easiest in solo practice.

Administration: One of the biggest disliked areas of operations in solo practice is administration. It includes functions such as documentation, TPA coordination, people, and various other admin functions, which take a lot of time and energy of the solo practitioner.

Group Practice

When two or more professionals join to practice together, it is called a Group Practice. A Group Practice may be a formalised arrangement with clear terms and conditions or may be a loose understanding between fellow professionals.

The underlying difference between a Group Practice and a Solo Practice is that there is sharing of everything; risk and rewards, cost and benefit, strengths, and weaknesses. Group Practice is an increasingly popular way of practice growing at a phenomenal pace worldwide, owing to various difficulties in the Solo Practice landscape amongst the aspirational doctors.

Advantages of Group Practice	Disadvantages of Group Practice
Accelerated Growth: With coherent efforts and complementing skills, a Group Practice focuses its efforts across all functions including the growth of knowledge and infrastructure. With this, the benefits of these attributes follow, and growth is accelerated.	Delayed Decision Making: Decision-making requires consent or deliberation amongst all members, and that can cause delays as well as heartburn amongst members for decisions taken that they are not accepting.
Win-Win: The efforts result in a better work-life balance for the practicing professionals because (i) as their patients can be taken care of by other members of the group, they can travel (for work or vacation), and (ii) when they travel, their patients are taken care of the other members of the group.	Internal Competition: If the compensation formula is not done right, there is a high possibility of unhealthy internal competition resulting in dissatisfaction amongst the members and concentration of efforts into counterproductive things. This can result in an ego clash between the members which results in extreme negativity in the Group.
Shared Responsibility: All members can take up responsibilities relating to administration and other functions of the setup, resulting in shared responsibility and reduced frustration amongst the members.	Family Succession: Once the Group grows up to a particular size, the Group transits into a professional approach to management and the next generation of practitioners have to climb up the ladder like any other member. This may be a disadvantage in the Indian context of generational privileges which we are used to.
Value Creation: A Group Practice can focus its efforts on a direction that leads to the creation of value in the long term and can provide for an exit to its members at the phasing out stage of their respective careers.
United Front: With a Group Practice, there is a collective strength of the members and with all stakeholders, the Group has a much stronger negotiating position.

Advantages of Group Practice

Disadvantages of Group Practice

Accelerated Growth: With coherent efforts and complementing skills, a Group Practice focuses its efforts across all functions including the growth of knowledge and infrastructure. With this, the benefits of these attributes follow, and growth is accelerated.

Delayed Decision Making: Decision-making requires consent or deliberation amongst all members, and that can cause delays as well as heartburn amongst members for decisions taken that they are not accepting.

Win-Win: The efforts result in a better work-life balance for the practicing professionals because (i) as their patients can be taken care of by other members of the group, they can travel (for work or vacation), and (ii) when they travel, their patients are taken care of the other members of the group.

Internal Competition: If the compensation formula is not done right, there is a high possibility of unhealthy internal competition resulting in dissatisfaction amongst the members and concentration of efforts into counterproductive things. This can result in an ego clash between the members which results in extreme negativity in the Group.

Shared Responsibility: All members can take up responsibilities relating to administration and other functions of the setup, resulting in shared responsibility and reduced frustration amongst the members.

Family Succession: Once the Group grows up to a particular size, the Group transits into a professional approach to management and the next generation of practitioners have to climb up the ladder like any other member. This may be a disadvantage in the Indian context of generational privileges which we are used to.

Value Creation: A Group Practice can focus its efforts on a direction that leads to the creation of value in the long term and can provide for an exit to its members at the phasing out stage of their respective careers.

United Front: With a Group Practice, there is a collective strength of the members and with all stakeholders, the Group has a much stronger negotiating position.

Institutionalised Healthcare

When The mature setup in the healthcare space is the Institutionalised Healthcare setup. This is the ultimate target for each for-profit setup.

Within the Institutionalised Healthcare setup space, there are various sub-categories across various domains such as primary care, government backed, and private sector hospitals popularly known as corporate hospitals in India.

Advantages of Institutionalised Healthcare	Disadvantages of Institutionalised Healthcare
No-Name Practice: Indian healthcare practice is largely driven by the name of the performing doctor. This bias in the patient’s mind is very difficult to overcome. Accordingly, the growth of the practice is subjective to the time availability of the performing doctor. With institutionalised healthcare practice, over a period of time, this dependency on the name can be reduced; however, in India, it is not completely eliminated.	No Say: Professional doctors have no to very little say in the overall direction of the setup. Decision-making is under a formal structure with shareholders/management having the final strategic call, sometimes with inputs from the professional doctors.
Availability of Capital and Resources: With Institutionalised Healthcare setup, one can obtain better capital and resources, as more people are willing to participate in this mature way of delivering healthcare.	Relatively Low Margins: As the structure is more formal, it has more overheads resulting in relatively lesser margins. Margins are the percentage of profits and not the volume of profits. The volume of profits is high in the Institutionalised Healthcare setup. Also, because of significant overheads and increasing pressure from peers adopting governmental schemes, maintaining margins is challenging.
Value Creation: Institutionalised Healthcare is the most effective way of creating value for the owners and the society in the long run.	Competitive: Because of the above (high overheads), Institutionalised Healthcare setups become expensive in providing healthcare services and hence, cannot be competitive in the terms of the pricing of their services. However, they differentiate their services with the quality and support infrastructure that they offer.
Scale of Operations: For professional doctors, it allows them to achieve professional excellence by having the necessary infrastructure and resources to pursue complex procedures like transplants, robot-assisted procedures, and other advanced procedures. Moreover, as these setups have a formal organizational structure including a Chief Operating Officer (COO), Chief Financial Officer (CFO) to take care of the various matters affecting the ‘business’ side of the setup providing ample bandwidth for the professional members to grow, and provide benefits for the setup.

Advantages of
Institutionalised Healthcare

Disadvantages of
Institutionalised Healthcare

No-Name Practice: Indian healthcare practice is largely driven by the name of the performing doctor. This bias in the patient’s mind is very difficult to overcome. Accordingly, the growth of the practice is subjective to the time availability of the performing doctor. With institutionalised healthcare practice, over a period of time, this dependency on the name can be reduced; however, in India, it is not completely eliminated.

No Say: Professional doctors have no to very little say in the overall direction of the setup. Decision-making is under a formal structure with shareholders/management having the final strategic call, sometimes with inputs from the professional doctors.

Availability of Capital and Resources: With Institutionalised Healthcare setup, one can obtain better capital and resources, as more people are willing to participate in this mature way of delivering healthcare.

Relatively Low Margins: As the structure is more formal, it has more overheads resulting in relatively lesser margins. Margins are the percentage of profits and not the volume of profits. The volume of profits is high in the Institutionalised Healthcare setup. Also, because of significant overheads and increasing pressure from peers adopting governmental schemes, maintaining margins is challenging.

Value Creation: Institutionalised Healthcare is the most effective way of creating value for the owners and the society in the long run.

Competitive: Because of the above (high overheads), Institutionalised Healthcare setups become expensive in providing healthcare services and hence, cannot be competitive in the terms of the pricing of their services. However, they differentiate their services with the quality and support infrastructure that they offer.

Scale of Operations: For professional doctors, it allows them to achieve professional excellence by having the necessary infrastructure and resources to pursue complex procedures like transplants, robot-assisted procedures, and other advanced procedures. Moreover, as these setups have a formal organizational structure including a Chief Operating Officer (COO), Chief Financial Officer (CFO) to take care of the various matters affecting the ‘business’ side of the setup providing ample bandwidth for the professional members to grow, and provide benefits for the setup.

Also, practitioners can be in employment or exclusive consultant arrangement with Solo Practitioners, Group Practices, or Institutional Healthcare setups, which are considered to be a part of the respective ecosystems.

Book a Consultation

Group Practice