The Financial Side of Sustainable DPC: What Your Accountant Isn't Telling You (ft. Tom Squire, Osprey CFO)

Can Your DPC Practice Survive Its Own Success?

Most physicians opening a Direct Primary Care practice master the clinical side quickly. The harder challenge? Running the business that sustains it.

In this episode of My DPC Story, host Dr. Maryal Concepcion sits down with Tom Squire, founder of Osprey CFO, a financial advisory firm built specifically to support small businesses and DPC practices. Tom brings a background in banking and private equity and translates that institutional financial playbook for independent physician practice owners.

Whether you're pre-launch, in your first year, or scaling a multi-location DPC, this conversation will help you identify where your finances are quietly costing you time, money, and peace of mind.

What You'll Learn in This Episode:

• The two biggest financial problems DPC physicians face as their panel grows
• Why the systems that worked when you opened your practice stop working as you scale
• How to know when it's time to start paying yourself a salary from your DPC
• The real cost of DIY financial management (QuickBooks, Gusto, bookkeepers who don't explain anything)
• Why pricing strategy is one of the highest-leverage tools in your DPC financial toolkit
• How a $5 membership price increase can meaningfully impact your bottom line
• The opportunity cost of doing your own financial administration vs. outsourcing to an expert
• What to look for when choosing a financial partner who actually understands DPC
• Why private equity is coming for DPC and how strong financial foundations protect independent practices

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Transcript

1:09

most physicians we are finding in direct primary care and direct specialty care are not struggling with the clinical side of opening a practice anymore. That is the easy part. And that's sort of funny because we worked so hard to get there and get our medical degrees. But the things that we are as a community needing more help with in terms of making sure our clinics are sustainable is things that we were never trained for. And some people have MBAs, but some people, most of us do not, including myself. And in the beginning, we focus on the nuts and bolts of getting the practice open, but then the practice starts to grow. And at that point. The business side of running A DPC can feel more complex and the question becomes, am I still managing this well? Or is this something that is creating another side of burnout? Is this costing me more time, money, or both? And so that is precisely what we are focusing in on today, and how to get through that, decision point of, Hey, am I making myself another burnout pile or not? And so we are going to be diving into something that we don't always openly talk about in the DPC space, and that is the financial side of running a sustainable practice. So I'm excited to be talking with Tom Squire of Osprey CFO, our partner for the month of March. We've been so excited about being able to get Osprey's financial decision making tree toolkit. Available to everybody. It's free. Make sure you download that today on my dpc story.com. But Tom, thank you so much for joining us today. Thanks for having me, Mary. I excited to talk about the business side of DPC today. When I think about physicians who are similar to me who might not have an MBA, but they're like, that's not gonna stop me from opening my DPC. What happens when a physician like that comes to you in terms of, I have this practice, I, I even have patience and now I am thinking about, oh, financially I could be thinking about things differently, or I want to grow and I'm not sure where to invest my capital. Or when can I invest if my capital's at a certain amount? So tell us about when physicians come to you, what are they generally asking or having questions about? Yeah, so that's a great question. Physicians really come to us kind of at all stages. We speak with people who are considering starting a practice, folks who have been in practice for years and they've got multiple locations, but there's, there's really like two main problems that arise that we, we help out with and see pretty frequently. And the first one is, is time. Folks are spending too much time on financial administration, and so they're working on payroll, bill pay accounting, and it's not the highest and best use of their time. The second piece is really the confidence behind the financial side of things. People sometimes feel like they're not necessarily in control of what's going on in the financial piece of their business. They've got an accountant and they're getting financials, every so often, but they don't really know how to go through them. A lot of folks don't have a plan or a budget in place, and so they're not really working towards a goal. They're just kind of managing the bank account and their business. And so those are really the two biggest problems that we solve for people. And somebody in practice is saying, is this where I should be really spending the most time to drive better patient outcomes and to grow my business? And then asking themselves, do I feel confident in what's going on in our company? Do we have control of what's going on on the financial side of things? I left that world Investment making and private equity I used to be in, because I hated Yeah. But we try and bring that institutional playbook from those industries and the tools that they have to small business and DPC, we have such a different perspective and very unique background that is pretty uncommon for most accounting firms and managed accounting firms. That combined with our healthcare experience, allows us to drive a lot of value for DPC practices. You have the insight of that world to make sure that you're strategizing against being eaten up by that world. It's so important just because PE is coming into DPC and the bureaucracy issue that we have in the US healthcare system, my concern is that PE is going to come in and add some additional layers, and that bureaucracy layer becomes deeper and deeper. And DPC basically just turns into the same problem that we have in fee for service. That's what I'm trying to avoid happening here. Like they're gonna come in, in some capacity. There's gonna be DPC firms, like DPC practices that are in by pe like it's gonna happen, but it doesn't need to be like, so many industries like your HVAC at your house, it's probably gonna get serviced by PE rollup now. I'm looking at my desktop, like chapstick company here, O'Keefe's, this is now owned by private equity, right? Like they get into everything and I would love it if the standard was for every DPC practice for it not to do by private equity. Tom, understands that world. We don't wanna be part of it. As I hear you answer, what I'm also hearing is very relatable things. I know that I have absolutely spent more time on things that are not my specialty. When I was convinced that I could learn QuickBooks So I, I absolutely think that what you're saying is relatable. I'm wondering. What would you say are things that you see happening at that moment where a person may have the questions that you're, you're talking about, but also when A DPC practice is growing? Business kind of works in different stages of life. What worked when you started out isn't necessarily gonna work when you're growing rapidly or at your next more mature phase. And so. How you set up certain things like pricing, how you, how you actually build the tools you use for that, right? Like you can bootstrap some stuff pretty early on, but as you're scaling and your, your panel is growing, you have more employees for you, those things start to compound and they take more and more time. And that process that you worked for you when you started up doesn't necessarily work anymore. And so that's a, that's a pretty big one that we see because your business is changing and evolving, absolutely. And as I mentioned, my, I can learn QuickBooks in a weekend. Yeah. How that I, I tried to convince myself of, I'm wondering what, do you see physicians who are at this point where their DPC is growing and the, the, the season is changing. I love how you put it that way. Yeah. What are physicians spending time on? And they're not necessarily realizing it the biggest thing though, on the financial administration side is just kind of a lot of daily or weekly tasks, so. Think about your accounts payable. So paying invoices that come into your business, it's really easy to manage that early on because you might just have rent, you have your insurance, things like that. But as your business grows, those expenses become greater, and generally you have more of them. And so We have processes and tools to make those more organized and give folks control over top of it. Another one is payroll. And so as you're growing your practice, you're naturally gonna have to start hiring some additional people and onboarding that one person onto your payroll platform and managing their pay every week or two. It's pretty easy to do with one to two people, but as you start to grow more and more, you're adding 2, 3, 4, 5, 6, 10 people in your workforce. Managing that payroll becomes like a part-time HR job. And we know the payroll tools that we work with very well. We're a huge fan of gusto. We talk with a lot of people who spin their wheels in it. We spend our whole day in systems like that so it's growing pains and processes and systems like those that I just mentioned where we can really provide a lot of value. And A big issue for a lot of people is, Hey, I had this planned in mind, but it, the business I isn't really tracking towards that. That can be a good thing or a bad thing sometimes, but I really need a partner to help us navigate this and get us on the rails. So that we can kind of get control back on this business. One thing that comes up for me is the, the reality of the economy. We can try to soften the blow at our businesses. For example, speculums are freaking expensive compared to what they used to be. And so it's I didn't budget the same for Speculums this year as I did before. And I think about also, we use gusto at our practice. And I am a big fan. However, I think that this is like. Many businesses in this day and age where it's one thing to have a platform and it's another thing to have an expert who knows it, to talk with you about the platform and help you understand the platform. That's right. That could be, a spreadsheet, that could be gusto, that could be anything. But I think that that's where, even with Gusto, I find frustration because I'm like, I would love to talk to somebody on the phone. And that is not a thing at Gusto, that's not a thing at many large companies, especially I, and it, it's especially ironic because they're an HR company. So, yeah. Yeah. So I do think that what you're saying is so pertinent, but also, it, it is something that for me, especially, and I find this with our community in general, is that we. As a community tend to love when we can actually reach human beings and actually talk to someone who can help us understand our business more, rather than just like handing us,'cause that's, that's what we had as an experience with a bookkeeper early on is here's your summary, but there's no explanation as to like, this is the health check-in of your business. Let's talk about it. Do you have any questions? All of that. And so I think that this is very pertinent to why it matters to have human beings on our team and not just AI and s technology. Yeah. And you hit a, a big point for us. Like I love, I hate the chat messenger on support channels and a lot of the tech stack and software. DPC practice owners use, whether that be QuickBooks or Hint or Gusto or Ramp or bill.com or a preferred partner on all of those platforms. And so we've got a special support team. So all you do is say, Hey, Tom, of having this issue you call into us and everybody's got a direct line for me and my team. And we can resolve that problem. And so instead of spending five hours on Gusto trying to figure out how to add a PTO policy, you just say, Hey Tom, we wanna add a PTO policy here, and you send it to us in an email and it's done. Yeah, it's, it's, it's really important for us, and that's how we differentiate ourselves we're here, we're real people. We have phone numbers. We're a small business. We understand the growing pains and so we can sympathize pretty well with business owners and understand what they're doing. And we understand certain problems that might seem small to somebody working at a call center are a really big problem for a small business. And so we handle those with urgency the same way as if they're happening in our company. One thing I wanna ask about, especially when we are talking about the topic of HR, is paying oneself as a DPC doctor, because I think that that's something that is with its own ball of wax of questions. Things like. Am I paying myself correctly? Yeah. How do I start paying myself? Can I afford to hire another person as well as pay myself? Because we have a lot of different different stories. As people have heard on the podcast where a person might be the financial breadwinner for their family. They might be the person who is not the financial breadwinner, but they still are wanting to make sure that their business is financially stable and they can pay themselves. Yeah. When it comes to that particular set of questions about the physician actually looking to pay themselves or to have money to do other things, like hire other people. Talk to us about that phase from your perspective. Yeah, this is one of my favorite issues to tackle. And so this all comes back to financial planning and having a plan in place for your business. And so when, when most small businesses start out, including DPC, you're probably not gonna be drawing a salary day one. Sometimes you might be, but realistically there might be a couple of months where there's a cash burn. And you need to be able to handle that personally and understand that that's gonna be an issue with the business starting out. And how do you understand like, how is that sustainable or not? Right? And the way to understand that is to have a plan in place to say, okay, for three months we're gonna be kind of on a cash run as we start. I'm maybe not gonna draw a salary, that's gonna be fine because we have good personal savings, but after month three or month six, or whatever the marker is that you've come up with and plan for, I need to start maybe drawing at least some salary. And so in order to get to that point. You have to have a plan in place and be meeting your goals from a revenue standpoint, from an expense standpoint, so that you can pay yourself. And there is, I forgot you had a guest on, it was sometime this past winter, and she was ran a practice down in Louisiana. It was a phenomenal episode. I can't believe I cannot remember her name, but she was talking about, we've, we're not even profitable. Like we, we've been running this practice and we're not profitable. And I just remember thinking, I was like, you're trying to do so much good to your community and your patients, but if you are not profitable, you cannot stay in business. Right? If you're a nonprofit, you don't have to turn a profit, but if you're a prof, you know you're a for-profit entity. You have to make money the day so that you can take a salary and support your family and keep your business going, keep the lights on. And you don't do anybody any favors. You don't, especially don't do your patients any favors if you have to close the doors, right. And so making a plan to where you can sustainably take an income out of the business over time, maybe not day one, but at some point in that first year is really important. Because if you continue down that road of, oh, we'll take a salary out next month, or the next month, or the next month, you're probably not gonna be in business for that long and you're not gonna be able to serve your patients anymore. And I will say something that I've said on the podcast before, a, a lesson that was taught to me very, very early on in my medical career. If you can't take care of yourself, you can't take care of others. And this speaks directly to that, because if you are not in business, you're helping no DPC patients. So That's right. That's, that's a, a, a big thing to use as a reality check, especially one if you are, thinking about, I don't I don't feel comfortable making an elevator pitch, or I'm not comfortable, selling my services, quote unquote. At the same time, you are bringing, just as Tom said, you are bringing such value to your community. That value is so needed and wanted by the people in your community, the people who are your patients or future patients. And if you are not there, where are they going to go for care? And that doesn't make us martyrs like, but at the same time it allows us financially being sustainable allows us to do what we love to do, what we are excited to do, as well as being able to be sustainable. When it comes to outsourcing, when it comes to having a partner help in this financial journey, I already mentioned like early on we had a bookkeeper and it was like the experience was like, here's your paper and I don't know what this means and I don't know what this means for the future of my business. It, are we sustainable? I didn't have, I didn't have these questions answered. I'm just wondering what are. Best tips for people to start thinking about if they're looking to partner with somebody to help them with their finances so that they have an experience where they're able to talk about their own questions, where they, where they, where they have a space to ask questions, where they have a space to ask questions specifically about direct primary care clinic sustainability. Yeah. I, I think we hear a lot from our clients now that they're not looking for just a bookkeeper, an accountant. They're looking for someone who can be more of an advisor or financial partner for them. Right. And so every, I like to say every single client of ours is an advisory client. If we're doing, we can do as little or as much as you need in your back office on the financial side. We've got clients where we just do quarterly books for them. And we've got clients where we do weekly reconciliations, monthly financials, monthly check-ins. We run their ap, we run their payroll, we run their budgeting, we do everything for them. And so we can kind of flex up and down, but everybody is at least an advisory client for us. And those folks who are even just on quarterly bookkeeping, we have a call with them twice a year where we're gonna go through the financials, see what's going on, understand their pain points, and see if there's a way where we can provide some advisor and maybe help'em tweak a few things to hit their goals. And so with that, I'd say a big question is understanding if you're looking to outsource accounting, what is the expertise of the firm that you're looking to outsource to? Do they understand DPC? We've got a client that we started working with last year and at our end of year check-in, we started revisiting pricing. We were looking at, the business. Hit a lot of the goals, but we were a little light on the revenue side. We're hitting patient goals, right? We were, panel was increasing to the de the size that they desired, but the revenue wasn't there and it wasn't necessarily covering expenses as much as we thought it would. And this is a big problem a lot of folks have and something that we look at a lot as pricing, right? It's my market's charging this for this, for this service. I've been charging this in line with the market, but I think that I need to charge a couple dollars more. We're providing a little better service than everybody else around the block. And even small tweaks, like we adjusted their pricing by$5, like with their panel size, like that, can actually drive a, a very meaningful amount of money to the bottom line when you increase pricing. That is just direct cash to the bottom line, and you can expect there's gonna be some attribution, right? If somebody is insensitive on pricing, maybe at that$5 increase mark, that's probably a pretty small population of your overall panel, but it's, it's items like that that come up in those meetings that are really important for people. Pricing is something that, we are very mindful of now that HR one has passed and for those patients who are funding their HSAs as well as maintaining a DPC membership. But at the same time, what comes up for me is that this is a business decision. This is not a, this is not something that you need to, have sleepless nights over. People are going to stay with you, people are going to churn. That's, that's an undeniable fact. But when it comes to pricing and when it comes to sustainability, I, I love that we're highlighting it in this light. I'm wondering when you have been talking with physicians like this end of year strategy call, I'm wondering what are things that you love mentioning or challenging your clients with as they go on to the next financial quarter or the next financial year in their business, given that you are, in tandem with them, strategy wise Yeah. To keep their businesses sustainable. Yeah. The end of year call is probably my favorite one. The big, one of the big things we hit on obviously is pricing. We need to make sure that pricing is in line and that you don't have a revenue problem in your business. The second thing that we look at are expenses, and I have the approach of last year's expenses can probably help inform our expenses for this year, but we really need to look at some$0 budgeting here and understanding how much do we wanna spend on each of these categories. And some categories we, we can't really change the expense on, right? We understand that our rent, we, we've got a four year rent and the rent's gonna be the same for the next couple years, but if our insurance has increased materially more than we thought it would, maybe it's time to take that back out to bid. And so, looking at expenses like that or where, we've got. 14 different magazine subscriptions in the lobby. Maybe we cut that to seven. Right? And those are, are small expenses, but they compound over time. And over a 12 month period, you'll be surprised at how much money you save, right? Because every expense, especially like something like I just said on magazine subscriptions, that is just direct money to your bottom line, right? That's a, those are really two big things that we look at. And then we try and set what is the overall goal for the business for this year? What are we trying to do here? And with all of those things at play, we can help really create and frame up a good picture for next year and create a plan to hit the business goal. But one of the, again, kind of backing up on that, I love challenging people on Come at me with your goals for the business this year. Do you want to grow like a weed? Awesome. Let's figure out a plan for that. Are you happy with where you're at and you wanna spend more time with family and be outta the office every day at four o'clock and clock in and maybe at 10. Awesome. Let's figure out a plan for that. That's probably the biggest and most important question we ask is what is the goal for the business and how do we create a plan to get there this year? When we talk about outsourcing and when we think about all of the, the different decisions we have to make as DPC business owners or people who are employed even by A DPC, but yet still participating in making decisions for the practice. One of the, things that I hear people saying is oh, but outsourcing is a cost. And I'll just do it myself. Like I, again, I am very guilty of I can, I can do that one more thing. Sure. But I'm, I'm wondering if you can talk to us about what you think when it comes to. Outsourcing is a cost versus outsourcing is a cost that affords you now also to have more time back to do x, y, or Z in your practice. Yeah. So it's, it's a two-sided coin there, right? It's a, it's a cost from a dollar perspective. But on the flip side, what is the opportunity cost of you spending time on this task? And it gets back to the first point that we discussed of what's one of the big problems we solve for people. And as they're spending too much time on the financial side and on the financial administration side of their business, and generally speaking, that is not the highest and best use of someone who's practicing medicine. Someone who is practicing medicine. It is not the highest and best use of their time. Right? Think about what's gonna grow your business. It's working on the business. It's how can we get more patients in the door? How can we. How can we improve patient outcomes? How can we service more patients day to day? Those are all great things for a practice owner to work on. It's a great place for them to spend their time'cause that's gonna drive value for your business. Spending time calling QuickBooks or Gusto or trying to look over a a p and l, that doesn't make any sense because your cousin Jimmy does. The bookkeeping right now are not great uses of time. And so it comes back to, yes, there is a cost with doing it, but what is the opportunity cost of you not doing it? As a business center on many fronts. It hits home for me because my team is always like, we need to take this away from you. And I feel like my favorite doll that I've had since infancy and someone's trying to steal it away from me. And I'm like, literally at the end of the day, if I zoom out, this is a spreadsheet. Like I don't need to be managing the spreadsheet, but I want to hold onto things for dear life. And I'm like, oh, because I'm not stressed out about that spreadsheet anymore. Managing that spreadsheet, I. Have this idea, let's talk about this. And so the creativity that we know DBC allows us to have it is really nice. Just from my, my own perspective when I am figuring out like what is in my zone of what I love to do and what I want to do and what I'm really good at and what is not in that category or in those categories. Yeah. And what has become once I let things go. So I think that that's really important for people to think about because it is very easy to wear all the hats and DPC It is and, and it gets to you. And so not only, I understand there's a cost with it. If there is the opportunity cost of you doing it, but what is the opportunity cost of you not having a partner who really knows what they're doing, who knows your industry, who knows how to grow small business and knows the problems that they encounter and has solutions for it? That's another totally different opportunity cost that you're missing out on or that you're encountering if you're not outsourcing to an expert and I will say that absolutely if, if you've been listening and, running in tandem with this and for this conversation, and you're also trying to figure out where you are in this process of your DPC and your DPC financial sustainability, this is where I will mention that we have put something together with OPR CFO that walks a person, a DBC, business owner through this process step by step. So it's a simple decision guide that helps you evaluate what to outsource and when. And definitely make sure you grab that. We are super excited to be bringing that to you with Osprey's expertise. And you can download that@mydpcstory.com or check out the link in the show notes. So, i'm wondering, Tom, after people are listening to this conversation, if they're wanting to ask more questions or if they're wanting to explore Osprey CFO as a partner for them financially in their DPC journey, where can people go? Yeah, they can go to our website, opr cfo.com. There's a link in the top right and it takes you directly to a Calendly and you can put time on our calendar and it's a call where we just get to know you, understand the problems that you have, and see if we're a good solution. People can also just email me directly email's tom@ospreycfo.com. We love just being a resource in the industry and if there's something that we can help out with, we're glad to do it. If it's, Hey, I've got a quick question on my accounting or. Gosh, we're looking at Switchy payroll providers. What should we do? Just give us a col. Be glad to talk to you about our experience and what works well for our clients. But more importantly, we, we love talking with small business owners and understanding their problems and seeing if we can provide a solution for them. When we opened Osprey looking back at my experience in banking and private equity, the best part about my prior experiences was working with small business centers and trying to help and we thought about how can we, how can we do that every day? So that's what we started Osprey, CFO to do back in 2024. And we know healthcare, we know direct care, we know financial administration really well. We know accounting. We know how to grow small businesses. And with all that combined, we knew we could provide real value to DPC. And on top of all that, we love everybody at DPC. They're willing to learn. They're very entrepreneurial, right? You're starting your own business and they're genuinely good people. I've worked with enough bad people to know that I don't want to do that every day. And also we really believe in the mission of DPC, we believe that we're getting back to practicing medicine the right way between a physician and a patient and cutting out all the bureaucracy that has infected the US healthcare system. It's a mission that we're very passionate about helping to support, and we're glad to support it in any way we can. one other thing I'll say with our discovery calls, a lot of times those lead up to us investigating a little bit more what's going on as we see if we're a good fit or not. Similar to DPC we do flat rate every single month. We understand kind of what services we're gonna need to provide on a monthly or a quarterly basis, and we price that out. So there's no surprises that come to you at the end of the month. Well, thank you so much, Tom, for joining us today, and thank you so much for you and your team at Osprey CFO for being there for the direct primary care movement. And make sure that you book a call with Tom today. Osprey cfo.com. O-S-P-R-E-Y cfo.com is where you can make an appointment with Tom and his team. Thanks, Marielle. I appreciate you having us, and again, would love to chat with anybody. Until next time.