How to Open a Private Medical Practice
When someone is in Medical School, it is a dream to see themselves working in their own medical office and start practicing independently. It can be daunting, but it can be one of the most fulfilling practices a medical doctor can ever consider. But the most crucial thing is to have a detailed plan for starting till completion.
Our article today will elaborate more on what one should do to start a medical facility, from pre-planning to having your first visitors.
Here’s how to do it.
The first and paramount item is to have a professional consultant who will guide you on the requirements of starting the facility, how to hire contractors to set up the facility, and also deciding on the location. Here is a step to step guide on how to go about starting a medical practice facility.
Finances are essential to consider considering that the facility will need several resources to start. Generally, the average cost of setting up is close to $100,000. This will cover startup costs and equipment. This is according to research by David J. Zeter, a National Society of Certified Healthcare business member. This can be obtained from a line of credit which will assist in catering for any expenses until the facility can meet the costs.
- Obtain a Proforma
A proforma is a detailed plan indicating the financial projections right from start up until such a time that it will stand on its own. It includes clinical expenses and projected incomes for a given period.
A financial consultant, in this case, will help prepare a realistic proforma for the type of investment you wish to put up.
For instance, you can have projections set up for the next three years so that you can have solid ground to go out there and convince financiers of the amount of loan you wish to get. This should include set-up costs, leasing or rental costs, an electronic health system, and medical and office supplies.
According to Reiboldt, you cannot get the capital to start a business without an elaborative business proforma. Remember that your income will be generated from insurance companies and the few patients who will come to pay in cash. Hence, there ought to be an experienced financial consultant offering you support for the proforma building.
With this in mind, here’s what to do to succeed in preparing one;
- Get an experienced consultant.
- Research the banks that could offer you good terms, such as interest rates and amortization schedules.
- Avoid being too adventurous when preparing a proforma. Stick to your original plan when approaching costs. Otherwise, you will get mixed up along the way.
- Be wise as you wait for the banks to give the nod on your loan advance request. You can be s preparing the lease, filing articles of incorporation, putting in place the medical insurance, and any obligations you may need when starting the business.
- Buying the Equipment and Staffing the facility
As soon as you get advanced with the loan, start buying the medical equipment immediately. Ensure that you plan right for these assets to ensure a swift flow when the business begins. Some of the assets you need to put up are;
- Installation of the health record systems. – This will help digitize patient records and stream communication from one office to the next. Modern facilities are doing this to give top-notch services.
- Practice Management Systems– You cannot practice without this essential component. The practice management system is integrated with your ERH system to ensure that all the front office information is tracked to facilitate effective operations.
- Medical Billing Services– This can quickly be done by outsourcing your billing to a third party. A third party will lift the burden from your staff when it comes to following up on rejected claims, saving time for your team to carry out other duties.
- Put up a Medical Transcription Software– If you consider having this in place, consult the major transcription companies to see the best that will integrate well with your EHR system.
- Credit Card Processors-While most of the payments may be made from insurance companies, it is vital to set up a credit card processor to meet the needs of the people who wish to pay using their cash.
- Office Managers- A reliable team is essential to help run your day-to-day operations. Ensure they have the prerequisite experience to meet your medical facility’s needs.
- Ancillary Services- Ancillary services are a great way to make an extra coin, which you can offer to your patients as you gain a competitive edge.
- Opening the Facility
Before opening the medical facility, ensure that you have met all required conditions to avoid government penalties. Such includes registering the business as a legal entity and having insurance documents. Though these may take a while, starting early will give room for opening the facility in good time.
Here is what to do to prepare for the opening;
- Registering the entity- This should be a limited liability company to separate you from the business as a person.
- Setting up your tax regulations- regardless of whether the business is an S-corp or an LLC.
- Incorporating the physicians with the Payers- set apart some time for credentialing the healthcare providers with your medical facility for ease of claims submission once you start to practice. Five months is an excellent time to keep in mind as you plan for this process.
- Putting up Policies, compliance, and procedure documentation- For the practice’s success, it is critical to have these in place and plan how operations should take place smoothly. Besides, compliance is vital to avoid getting into loggerheads with the government.
- Buying Insurance-Insurance is a critical component in any business, and the health industry needs this even more. You will require medical malpractice insurance coverage or worker’s compensation in case of eventualities while still working. Insurance, such as life and liability, is critical
- Opening Up Doors and Start Practicing
This is a significant milestone in starting the much-longed business. But remember, you can only evaluate your efforts by putting them into practice. To create the facility, celebrate the milestone by cutting a ribbon to welcome the first patients to your facility. Give them quality services so they can spread the word about the new medical Practice office.
Ensure that your office manager is accountable for all the operations and gives feedback on what needs to be improved. For good record keeping, hire an accountant to manage the finance office, especially if the office is becoming busy by the day.
To know if your services are okay, evaluate, and benchmark yourself with the industry, and get to know what you should do better.
Reasons why you Should Open your Medical Practice
Opening a medical facility is hard, but there are numerous reasons why you should open the facility;
- Become an influence on large enterprises by offering quality healthcare services.
- Become your boss.
- Be part of creating employment.
What are the types of Medical Practices you can Start?
There are five types of medical practices that you may consider starting. These are;
- Solo Practice– This is where you take full responsibility for the operations. The cost of this is high because everything is your responsibility.
- Group -Practice- This is an arrangement with other professionals to start 0112502625up the medical practice. The advantage of this type is that cost sharing is fairer.
- Hospital-owned practice– This is where you share the medical practice in the hospital network. In this case, you will minimize most of the costs associated with starting the business.
- Federally Qualified Health Center– This is where you start the medical practice within a federal health center.
- Academic Health Center– Starting a medical center in an academic health center will minimize the initial costs though there are still some costs involved.
It is not easy to open a medical practice. However, your dream will surely pass when you follow the steps to plan your private clinic. Just be confident and equip yourself with the knowledge to enhance accountability; success is on the way.