Opening a new practice requires planning
■ A column answering your questions about the business side of your practice
By Karen S. Schechter amednews correspondent— Posted Sept. 17, 2007.
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Question: I am an established physician working in a single-specialty group practice, and I am thinking about going out on my own. What is a reasonable timetable to consider, and what are the critical tasks that contribute to the success of the transition?
Answer: Starting a new practice is a time-consuming process, even for an established physician. The optimal time period is three to 12 months.
Success is defined as being able to service patients in a pleasant and well-equipped environment, submitting electronic claims to insurance companies and receiving payments within 30-45 days of clean claim submissions. This is no easy feat.
The amount of time it takes depends on the physician's resources (financial and staff), availability to complete certain tasks, and relationship with the current practice.
It's important for physicians contemplating starting a new practice to have a clear understanding of what the startup and ongoing costs will be and what capital resources are available to cover these costs.
The startup costs vary, depending on the specialty, the location and size of the office space, number of staff, equipment needs.
Once the practice opens, there needs to be enough money available to cover expenses for at least four months. This might not necessarily include paying the physician a salary (or at least not an amount to which he or she is accustomed). In most situations, banks and other financing institutions will require physicians to give personal guarantees for the startup business loans.
If you are in a situation where you cannot devote several hours a week on the startup in addition to your regular patient load, or with a reduced patient load, there are plenty of people willing to assist you in the process.
Many doctors hire practice management consultants to develop a detailed startup implementation plan, and to facilitate and in some instances perform various implementation tasks.
Typically, these consultants are not inexpensive, so you do not want to pay them to complete tasks that could be delegated to a clerical person.
Many consultants have associates with lower billing rates to handle some of the lower-level tasks. If not, it would be best for you to hire someone to work with the consultant and you. This person might not necessarily be the same person you hire as an office manager, or even keep long term. It's someone to whom you can delegate assignments and be confident that they will be completed on a timely basis.
Even when you hire someone to work with you, there are times when you need to be available to make important decisions about your new practice.
The issues include: identifying your advisers (accountants, attorneys, etc.); finding office space; agreeing to a space plan and reviewing the proposed lease; selecting furniture and equipment; determining staffing needs, salary structure and benefits; hiring staff; selecting practice management systems; and identifying billing options. This is your business. It's important that these key decisions belong to you.
Some of these tasks may be completed after hours. However, you might have to take time off from your office hours to accomplish them. This could impact your current productivity -- and potentially your income. So be prepared.
Finally, you need to assess your relationship with your current practice.
This is often a tricky situation, regardless of how closely you adhere to the terms of your contract. Even the most amicable departures can be troublesome.
It is important to consult your attorney at the onset to make sure that key clauses related to terminating your tenure with the practice are dealt with as effectively as possible.
Requests that seem simple, such as asking for your future appointment schedule, patient contact information and even patient charts, often become an issue. This can affect the ease associated with filling up appointment slots at your new practice so that there is maximum opportunity for continuity of patient care and early realization of revenue.
In all your tasks, you need to have a plan and stick to it . But within that plan, it is important to be flexible as your plan unfolds.
Even the most well-thought-out plan can go awry. Deadlines are missed due to situations that are not under your control. Certain ideas about how you thought you would do things might not be appropriate for your practice.
Opening a new practice is not just a set of tasks on a timeline. It is also a learning opportunity that all physicians should be prepared to take advantage of.
Last but not least: Even when the process seems overwhelming and you're wondering why you made this career decision, maintain a focused outlook and a sense of humor. Both will help you tremendously.
Karen S. Schechter amednews correspondent—