There are many things that require your attention when starting a practice and for those of you who have done it, you understand what I mean. Starting a new practice has to be one of the most stressful and trying times for a physician. It would seem as though all physicians also need an MBA in business to successfully navigate their way through the maze of regulations, rules, and red tape. At the bottom we have included a link to download your free practice start-up checklist.
We have identified some of the critical components that are key to a successful practice start up. There is obviously much more that will require your attention but these are some of the areas that are often overlooked or neglected.
- Develop Business Plan and Strategy - This should involve a detailed business plan identifying a need in your community, anticipated payer mix(primarily Medicare, Medicaid, Commercial, etc), common CPT Codes with the expected reimbursement, billing efficiency, anticipated growth rate, marketing strategy, referral strategy, business development plans and overall business objectives. If you are a radiologist coming to a new community, you need to do just like any other business and determine the need. You should do your research first and foremost and find out how many radiologists per person currently are in this area and compare it to the national average. A business plan for medical practices is oftentimes the last thing on the list.
- Corporate Formation - Self explanatory but not as easy as it sounds. Top things to consider when starting your corporation are tax and general liability. An LLC taxed as an S corp is what I recommend because of the ownership protection through the LLC and tax advantages of an S Corporation(Form 2553). (Don’t have a CPA and need someone affordable, we understand and have a list of CPAs that we refer physicians to.)
- Securing financing if necessary - SBA loans are still great loans for small businesses but there are many options that might be more of what you are looking for. To best rates come to those who can prove that they are worth investing in and have a clear and succinct strategy for building their business.
- Identifying your office location (for office based physicians) – This should involve more than just being close to home and convenient to your favorite 18. Top things to consider when looking at office space are: Sq. footage, ppsf, lease agreement(3-5 year), purchase price, local referral sources, competition, market saturation, accessibility, parking, option to expand, 3-6 months free rent, road frontage, landlords, does county require business license, and local demographics.
- Credentialing- Physician Credentialing involves more than just seeking out contracts for your specialty. Credentialing when starting a new practice should be done concurrently with State license applications, DEA numbers, Malpractice insurance, NPI registration, and Corporate formation. The credentialing process of applying for your Medicare number, private payer credentialing, and CAQH registration cannot be done without these other first steps. Remember that some panels may be closed for your specialty and it is important to determine the actual need or you may be Non-Par and in a difficult business situation.
- Technology & IT - This has always been the most overlooked part of opening an office because most physicians do not have the time or energy to spend the hours involved in selecting the best technology option and IT infrastructure. It is recommended to consult with an IT partner that can assist you with your technology needs. We work with a few different companies that we trust to make the best recommendations for our clients. It is impossible to expect a business owner to understand what will work best for them without expert advice and with physicians it is even more trying because of the push towards electronic health records. It is recommended that you consult with experts in the area of telecommunication, emr, and network administration prior to opening or selecting your providers. Phone lines, internet, EMR, and your computer system are all uniquely vital to the success of your IT infrastructure. Most EMR and Practice Management systems now have the capability to be hosted off site and accessible via the internet but if your office is only using standard DSL then you will find yourself frustrated with the slow load times and image download speeds.
- Banking & Merchant Services - Oftentimes, if you open your business account with a bank then you will also be eligible to receive substantial discounts on merchant card services.
- Medical Supplies & Equipment - Selecting your Medical Supply partner and ordering the necessary equipment and supplies needed before opening is obviously one of the most critical aspects for a new practice. You want to select a medical supply business partner not just someone who can come by and bring your staff chocolates. You want to speak with someone who is knowledgeable and willing to provide you with accurate information on what will work best for your practice not provide them with a higher profit margin. How do you know who you are dealing with? GET REFERENCES!!!! Ask them to provide you with a list of satisfied current customers for you to contact. Speak to physicians and administrators to get a good idea of who you are dealing with.
- Website & Marketing - Websites are no longer just an option for a practice but are critical for the success of every practice. Even if the website does nothing more than provide patients with an online CV and directions to your office, it still needs to be there. The best websites for physicians explain the services offered, provide an area where the patient can request an appointment, subscribe to newsletter, and receive detailed directions to your practice. A website is not the only thing needed when starting a practice but instead should be combined with a PR campaign. There are many opportunities for Free PR by just contacting the various local papers and doing some grassroots networking. Many publications like Health Source Magazine in Jacksonville provide physicians with free advertising opportunities in the What’s Happening section of their Florida Doctor Publication. There are many opportunities like this in Business Journals, Medical Journals and local health publications.
Again, it is important to note that are many other factors involved but this should give you a good starting point. Download free Practice Start-Up Checklist