Money Matters

Concentrate on the good stuff to up profits

My life is seriously wonky.

I spend hours and hours of the day doing things of little consequence – checking emails, answering phone calls, the usual stuff of life. Seeing follow-ups in clinic that really don’t need to be there. Reading journals and articles which are tedious, dull and really don’t add much of any consequence to the planets body of knowledge on inflammatory bowel disease. Or whatever.

I’m sure your life is wonky too, if you stop to have a look at it.

You see an Italian economist by the name of Vilfredo Pareto, observed all this wonkiness in 1897. Of course he had to dress it up as Pareto’s theory of predictable imbalance or no-one would have taken him seriously, but it started with the observation that 80% of the land in England (and every country he subsequently studied) was owned by 20% of the population. It later turned out this wonkiness was everywhere, usually 80:20 but sometimes 95:5, or 60:40. Always wonky.

In practical terms, it means that perhaps 80% of your results come from only about 20% of your efforts. And this is an extremely important insight.

For example, most of us have done research, many a higher degree. And think about all the experimental work you did for it. I don’t know about you but I recall very clearly how at least 70% of my discussion pivoted on just a few results from all the experiments I performed.

What about your private work? Interestingly, a very significant minority of your private patients, about 20% (but might be 35%, might be 15%, but a significant minority) is responsible for the vast majority of your private income. About 80%. The remaining 20% of your income comes from the rest.

Now how about if you saw less of that less profitable patient group and spent that time seeing more of those profitable patients? What do you think that would do to your income?

Say you earned £100,000 a year from your practice: 20% contributed 80% of that income i.e. £80,000. So, 80% of your patients only produced 20% i.e. £20 000 in income.

Now, once you know this there are rather a lot of nice opportunities that become apparent:

1. You could cut out 80% of your practice and spend all the liberated free time with your family/mistress/toy boy/on the golf course/in the pub/furthering your NHS career and STILL take home £80,000 and have a whole lot more fun doing it.

2. You could cut out that 80% of your practice, double the 20% of profitable patients and take home £160,000 p.a. and still spend the extra 60% of free time you’ve liberated with the family/mistress/toy boy etc.

3. Or if you wanted to go completely bananas you could delete the 80% of relatively unprofitable patients, spend that time on treating patients in the profitable 20% group and find that you’re taking home £400,000 a year yet not working any harder for it than you were when you were taking home £80,000.

It’s a thought, isn’t it?

So, why not scratch under the skin of your practice and see where the wonkiness lies. Where does the majority of your private income come from? Is it a particular clinical condition? Is it medicolegal work?

Then cut the less profitable stuff and decide how you want to spend all that free time you’ve liberated. Because now you have options…and we all like that.

Dev Lall (FRCS) runs Private Practice Expert. Visit for free daily tips on how to grow your private practice.

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3 Responses to “Concentrate on the good stuff to up profits”

  1. funky gibbon says:

    what a depressing article – I get the point (even if I’ve missed any intended irony) but is this what it’s all come to?

  2. chunky monkey says:

    Depressing or empowering? We’re not responsible for the direction of travel, but we might as well embrace it.

  3. privatepracticeexpert says:

    What exactly is depressing?

    To me this is a seriously powerful insight which has ramifications in all aspects of our lives, not just private practice. As a surgeon I find so much of my day is wasted on things of little direct value to patients – meetings, travelling to outlying clinics etc. etc. The actual time I spend with patients either in clinic, operating or on ward rounds is only a small percentage of the working week. On the face of it that’s depressing, sure. But once armed with that knowledge you can reduce your time doing nonsense and spend more time doing the worthwhile stuff – and surely that is a good thing?

    Or is it that you disapprove that the discussion is about private practice?

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