Starting a medical practice after going through medical school or working for another doctor can be a daunting goal, especially with student debt racking up from undergraduate to graduate school. But it’s not an impossible task. This post will be going over the steps required to start a medical practice.
Step 1: Choose your branch of medicine.
Choosing a specialty is a huge decision that will impact the future of your business. When choosing a specialty, it’s best to consider your competition in the area you’re looking to practice. Ask yourself questions like, how many primary care clinics are in the area I’d like to start a practice? Ask locals if they’re satisfied with their current physician to see if there’s a window of opportunity for a new doctor to take over the local market.
Step 2: Write a business plan.
The business plan is arguably one of the most important steps in starting any business. If you don’t have a solid business plan that states your intentions and plans for the next 5 to 10 years, you will be walking blind.
The financial side of the business plan should account for construction, legal fees, accountant fees, and real estate commission. When writing your plan, it’s important that you’ve established what type of practice you’re going to open, and who your prospective patients are. Once you’ve identified those two items, you should identify your location for the office. Location is vital to the success of a medical practice, so choose a location that has high visibility near a high traffic area with an easy to spot entrance.
Step 3: Get funding.
It’s scary to add financing on top of student loan debt, but as the saying goes, it takes money to make money. Before you make a move to secure financing, you should have completed the financial portion of your business plan.
Factor in startup costs like real estate, construction, equipment, employee wages, attorney, accountant, and consultant fees. Other expenses include costs for computers, electronic health records (EHR’s), office furniture, and disposable supplies like gauze and gloves. The items for projected cost can add up, but it’s important to consider all your possible expenses before you seek funding. It could be less expensive to buy into a practice that is expanding or take over for a retiring doctor.
Step 4: Get credentialed.
To accept government or private health insurance from patients you will need to go through a process known as credentialing. The whole credentialing process can take several months. Insurers will typically request information about your medical education and residency, and they will want to see that you’re insured for malpractice insurance, although requirements for malpractice insurance varies state by state.
The branch of medicine you’ve picked, and your areas demographic will help you to know what public health insurance programs you should consider. Although Medicare and Medicaid pay all physicians the same, private insurance programs can be negotiated with.
Step 5: Choose your legal structure.
It’s worth hiring a healthcare attorney or medical consulting firm to help you choose your legal structure and draft the legal documents, including your articles of incorporation or articles of organization. S corporations are the most common structures that medical practices pick, because they only pay taxes on their personal income from the business.
Step 6: Hire staff.
Hiring your staff is a vital part of starting your medical practice, and if it’s done properly it can make your medical practice soar beyond your competitors. If you hire untrained, inexperienced employees, it could seriously cost you. If and when patient privacy is compromised due to employee negligence, it’s a severe HIPAA violation that could cost your practice up to $1.5 million, which can impact the financial stability of your practice. With that said, it’s worth paying higher wages for trained and experienced employees over untrained and unexperienced employees.
Step 7: Get licensed.
To open your practice and accept patients, you must be licensed. You must be licensed by the medical board in your state. The Federation of State Medical Boards’ website has a list of links to each state’s board. You also need a national provider identifier, which Medicare, Medicaid, and private insurance companies use to keep track of health care providers. You can apply for a national provider identifier on the National Plan and Provider Enumeration System website. To prescribe medication, you need a Drug Enforcement Administration (DEA) number, which you can apply for on the U.S. Drug Enforcement Administrations website.
Leading Management Solutions can help you through starting your own practice. We specialize in guiding budding medical practices through all the steps above and more. To get started with our expert team of healthcare consultants, visit our contact page.