A dermatology practice opens its second location in 12 months. Down the street, a family medicine clinic is still working toward profitability after three years. Same town, same patient base, completely different timelines.
The difference isn’t quality of care. It’s a business structure. Understanding why specialty practices scale faster helps you make smarter decisions about your own growth strategy.
Higher Revenue Per Patient Visit
The numbers tell the story clearly.
| Practice Type | Revenue Per Visit | Annual Collections |
| Primary Care | $100–$150 | $535K–$567K |
| Cardiology | $2,000–$4,000 | $1.71M–$1.76M |
| Orthopedics | $15,000–$25,000 | $1.71M–$1.76M |
| Gastroenterology | $800–$1,500 | $1.71M–$1.76M |
When each patient visit generates more revenue, you need fewer patients to cover overhead. That creates faster breakeven and easier expansion decisions.
Key Takeaway: Specialty practices achieve profitability with 60-70% fewer patient visits compared to primary care, directly impacting how quickly they can scale.
Focused Operations Keep Costs Lower
Specialty practices do one thing well. Staff train on specific conditions. Equipment serves clear purposes. Scheduling follows predictable patterns. This focus keeps overhead around 45–50%.
Primary care handles everything: pediatrics, chronic disease management, acute care, preventive visits. That breadth requires more staff, varied equipment and flexible scheduling. Overhead typically runs 55–60%.
A 10-point overhead difference on $600K in collections means $60,000 more annually to reinvest in growth.
Operational efficiency factors:
- Specialized staff training reduces onboarding time by 40%
- Single-purpose equipment maximizes utilization rates
- Predictable scheduling improves provider productivity by 20-30%
- Lower inventory complexity reduces waste and carrying costs
Smaller Spaces, Lower Fixed Costs
Patient volume requirements shape real estate needs.
Specialty practices reach profitability with 2,000–2,500 patients. A dermatology office operates comfortably in 1,200–1,500 square feet. Monthly rent: $4,500–$6,000.
Primary care needs 2,500–3,500 patients per provider. The same daily volume requires 2,000–2,500 square feet for longer visits, family waiting areas and vaccine storage. Monthly rent: $7,500–$10,000.
Lower space requirements mean lower fixed costs and easier expansion math.
Real estate advantage: Specialty practices save $36,000-$48,000 annually on rent alone, accelerating their ability to fund second locations.
Faster Provider Profitability
Adding providers works differently for each model.
Specialists generate procedural revenue immediately. They reach break-even in 3–6 months and full productivity within a year.
Primary care physicians start with full compensation while building patient panels over 12–18 months. Break-even comes around month 18–24.
While primary care builds one provider’s panel, a specialty practice can open another location.
Provider ramp-up timeline comparison:
- Specialists: 3-6 months to break-even, 12 months to full productivity
- Primary Care: 18-24 months to break-even, 24-36 months to full productivity
Cleaner Billing Means Faster Cash Flow
Revenue leaks affect everyone, but they hit primary care harder.
Primary care loses 8–12% of potential revenue to billing issues: undercoding complex visits, eligibility changes between scheduling and service and higher denial rates. Specialists lose 3–5%.
The gap shows in accounts receivable. Specialists collect within 30–35 days. Primary care averages 45–60 days.
Many practices don’t realize where revenue is leaking until they look closely. Hidden revenue issues often cost more than expected, but they’re fixable with the right approach.
Cash flow impact: The billing efficiency gap means specialists have 30-50% more working capital available for expansion at any given time.
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TALK TO AN EXPERTWhich Specialties Scale Best
Private equity focuses on dermatology, ophthalmology and gastroenterology for operational reasons.
These specialties share key traits: procedural revenue, standardized workflows and overhead under 45%.
Top scaling specialties:
- Dermatology: Combines insurance and cash-pay procedures, cosmetic services provide high-margin revenue
- Gastroenterology: Steady colonoscopy volume with predictable scheduling
- Orthopedics: High-revenue procedures with strong reimbursement rates
- Cardiology: Diagnostic testing and interventional procedures drive consistent revenue
The standardization makes multi-location growth manageable.
What to Do Before You Expand
For Specialty Practices
Nail your first location before opening a second. Target collection rates above 95%, accounts receivable under 35 days and overhead below 50%.
Keep your second location within 15–20 miles initially. That lets you share on-call coverage and move staff during ramp-up.
Pre-expansion checklist:
- ✓ Achieve 95%+ collection rates for 6+ consecutive months
- ✓ Maintain AR days under 35
- ✓ Document all standard operating procedures
- ✓ Build management team depth
- ✓ Secure financing or cash reserves for 6-month runway
For Primary Care Practices
Strengthen billing efficiency first. Aim for collection rates above 90% and accounts receivable under 45 days. Professional billing support helps identify specific leaks and reach these targets.
Add ancillary services like labs, imaging and in-office procedures. Build strong patient panels before planning new locations. Consider starting with a satellite office operating part-time before committing to a full second location.
Growth strategy steps:
- Optimize current location billing (target 90%+ collection rate)
- Add 2-3 profitable ancillary services
- Reach 2,500+ active patients per provider
- Test satellite location 2-3 days per week
- Expand to full-time second location when satellite reaches profitability
For Multi-Specialty Groups
Place primary care offices where they naturally feed referrals to specialists. Track referral capture rates, successful groups keep 70–80% internal.
Use specialty margins to fund primary care panel development. It creates a model where both sides strengthen each other.
Integration best practices:
- Co-locate primary care within 1 mile of specialty services when possible
- Implement shared EHR systems for seamless referrals
- Create financial incentives for internal referral completion
- Monitor referral leakage monthly and address gaps immediately
The Bottom Line
Specialty practices scale faster because of three things: higher revenue per visit, lower operating costs and faster profitability timelines.
Primary care provides essential services that keep populations healthy. The value is real. But the business model requires different economics and longer growth timelines.
Know which model you’re working with. Specialty practices can move quickly with strong operations. Primary care needs billing efficiency and operational strength first. Multi-specialty groups can leverage both strategically.
The question isn’t whether you should scale. It’s whether your current operations and cash flow support the timeline you’re considering.
FAQ: Practice Growth and Scaling
Q: How long does it take a specialty practice to become profitable?
A: Most specialty practices reach profitability within 6-12 months with 2,000-2,500 active patients, compared to 18-36 months for primary care practices.
Q: What’s the biggest mistake practices make when expanding?
A: Opening a second location before optimizing the first. Practices should nail operations, billing efficiency and profitability at location one before replicating the model.
Q: Should I hire additional providers or open a second location first?
A: Add providers to your current location until you reach capacity (typically 3-4 providers), then consider expansion. This maximizes operational efficiency and staff utilization.