Although starting a private medical practice is a difficult procedure, it can be made simpler if you follow this step-by-step manual.

A thrilling method to take control of the practice of medicine is to launch your own medical practice. But it's also difficult and convoluted.

You need a clear, thorough plan for your medical business from the beginning in order to keep everything on track.

You may launch a private medical business with the guidance of this step-by-step manual, from securing money to assisting your first clients.

A guide to opening a medical practice

There is no set method for launching a medical practice. It could be beneficial to employ a qualified consultant who has experience opening medical offices, is knowledgeable about the hazards and difficulties, and can provide you with workers' compensation and medical malpractice insurance advice.

After all, the specifics of launching a business varied by speciality, and some rules and regulations do too.

A qualified expert will comprehend the risks and assist you in making the right plans. While some new practices might find a turnkey location, others might need to employ contractors to furnish their new offices.

Overall, when starting a practice from scratch, you must have a lot of standard items on your checklist. Here is a step-by-step guide on how to launch a private medical practice.

1Secure financing

You might be wondering where to start with everything that has to be done. Simply put, financing.

According to David J. Zetter, founder and president of Zetter Healthcare and a member of the National Society of Certified Healthcare Business Consultants, you should aim to secure at least $100,000 to cover equipment and startup costs.

The precise amount required will depend on your particular circumstances. Zetter also advised that you make an effort to secure a $100,000 line of credit to pay bills and payroll until your revenue stream is established and reliable, which will take some time.

2Make a pro forma

You should create a pro forma to determine your finance. A pro forma is a simplified version of a full business plan that includes realistic revenue and debt estimates. Include all of your medical clinic's costs, debt, and expected income in your pro forma.

Because it's their duty to make good investments, bankers can determine which estimates are reasonable and which aren't, so if you're going to apply for a bank loan, you should back up any numbers you employ.

A solid pro forma will make predictions for the next three years or, in certain cases, even five years in the future.

It can be challenging to secure funding through a conventional bank loan, especially in light of the fact that many healthcare professionals have a negative net worth as a result of incurring debt to attend medical school.

A strong, practical pro forma can help with that. Starting, Buying, and Owning a Medical Practice author and Coker Group president and CEO Max Reiboldt discussed the significance of a sound business plan and the critical necessity of starting finance.

Here are some advice about finance.

Locate the experts

If the bank has a medical/dental division, submit your pro forma and loan request there. This section specializes in the healthcare sector and is familiar with its risks, costs, and revenue patterns.

Compare prices

Send out five to ten banks your pro forma and loan request. As a result, you'll get many offers with marginally different conditions. Make your choice based on the criteria that are most essential to you, such as the interest rate and amortization period.

Keep it conservative

Use a careful approach when putting together your pro forma when it comes to purchasing furnishings and equipment. You don't yet require high-tech equipment and luxury chairs. You should concentrate on positioning yourself for success right now since everything else will come with time and success.

Make good use of the waiting time

Prepare to take on some of the following crucial steps, such as signing a lease, determining whether you'll need to hire a contractor to modify your space, filing articles of incorporation, obtaining a tax ID, purchasing liability and medical malpractice insurance, and credentialing with your payers, while the banks review your pro forma and decide whether to approve your loan request.

Key takeaway

You may finance your medical practice with the greatest business loans.

3Invest in equipment and hire people for your business

Once you've opened a line of credit and gotten a loan, you're ready to hire staff and buy the necessary office and medical supplies. It's easier said than done, therefore thorough study is required before making any decisions.

Again, though, success can be yours with a little preparation and the correct knowledge—it just takes work. You should think about the following factors.

Health record electronic systems

Electronic medical record (EMR) and electronic health record (EHR) systems are crucial tools for healthcare professionals. For the modern healthcare provider, digitizing records and streamlining communication are top priorities.

An all-encompassing EHR functions as a central hub for data on your patients' records and histories, communications with other healthcare professionals, lab and prescription orders, and revenue cycle information.

Moreover, in order to be eligible for federal incentive payments, your EHR system must be fully operational. See our suggestions for the top EHR/EMR medical software and learn how to choose an EHR/EMR system.

Systems for managing practices

Your practice's practice management system (PMS) is its vital organ. Practice management software streamlines operations and keeps track of all your front-office data when it is integrated with your EHR system. Its main applications include managing and observing invoices and collecting.

Your employees will be able to charge patients and submit claims to payers using the practice management system, and any pertinent data will be shared between the EHR system and the practice management software, preventing the need for duplicate records.

Services for medical billing

You can always hire a different business to handle your billing. Even though a practice management system would still be necessary, your personnel would not be responsible for managing the billing procedure.

Not only is submitting claims difficult and time-consuming, but your team would also be in charge of responding to rejected or denied claims in order to recover the money that is owed to your practice.

This responsibility is transferred to the business you have a deal with when you use a third-party billing provider. However, there could also be drawbacks to using a third-party biller.

Software for medical transcription

Consider how medical transcription fits into your practice. A medical firm can often execute transcription in one of three ways: internally with a staff member, using speech recognition software, or by outsourcing to a medical transcription service.

The most important factors are timeliness and accuracy; you want your dictations back in print as soon as possible, but only if they are accurate, particularly if they are going to another healthcare professional or will be entered into your EHR system.

Services for background checks

Trust is the cornerstone of medical practices. People literally entrust the practice with their lives in addition to handling a lot of sensitive patient information daily. That goes beyond tests, findings, and cures.

Employing a background check system is necessary if you want to know and be able to trust your workers.

Although you will be interested in a candidate's job and criminal history, healthcare practitioners must take into account more factors than are often included in background checks.

Considerations include any necessary certificates and licenses. Inadequate credentialing for your team could cause serious issues for your practice.

Processors for credit cards

Your practice will require a credit card processor for those times when patients must pay at the point of care, even if you'll be making the majority of your money through payers like insurance companies and Medicare. With the introduction of EMV chips and other security measures, not only has the world of credit card processing altered recently, but some systems are better suited to the medical industry than others.

Choose a credit card processing business that provides additional protection and takes part in the Member Value Program of the American Medical Association, which works with vendors to offer medical professionals savings and benefits. Find the top credit card processors to help your business.

Office supervisors

You'll need a trustworthy office manager to oversee the day-to-day operations of your clinic as you put together your front-office team. Although this person must be dependable and committed, those characteristics are insufficient. You'll require a person with the required practical knowledge.

As soon as your practice begins, you can think about employing a qualified consultant to periodically assess its performance. Although a reliable office manager is a major advantage, this does not ensure a well-run business.

However, a professional company that has a contract with your clinic has an incentive to provide an accurate assessment of its performance.

Important

To assist you handle everyday operations, make sure your office is equipped with one of the best business phone systems.

Additional services

Based on your area of expertise and your patients' needs, think about any additional services you might want to provide. These services could be a terrific way to increase your income, set yourself apart from the competition, and keep your clients satisfied.

Reiboldt, for instance, stated that providing a service like bone density examinations on-site can be in your best interests, despite the fact that the required medical equipment and personnel training represent an additional price.

Additionally, certain EMR and PMS vendors, like CareCloud, can offer you the resources you need to set up an online store as part of your medical practice. To discover more, read our comprehensive CareCloud medical software review.

4Get ready to start

Before you can open your doors, there are a few logistical tasks that must be accomplished in connection with the acts mentioned before. Before you debut, give yourself plenty of time to become a legal organization, acquire insurance, and set policies and procedures. For instance, obtaining credentials can take a while and is based on how quickly other firms move.

Establishing a legal company and acquiring a tax ID

Self-explanatory but incredibly significant is this one. The primary benefit of incorporation is limited liability, which ensures that only the company's assets are at risk in the event of a lawsuit. If you don't incorporate, a lawsuit could potentially target your personal assets.

Each sort of entity also comes with specific tax advantages. Make sure you thoroughly examine each type of business and the possible benefits it gives your firm before deciding whether to incorporate as an S-corp, LLC, C corporation, or general partnership.

Establishing a physician's payer credentials

To submit claims to the payers you'll be dealing with, you must also obtain the necessary credentials for the medical professionals that work in your practice. Even though the credentialing procedure can take up to three months, you might want to allow yourself up to five months just in case.

To navigate the procedure for each payer you intend to submit claims to, you'll need to provide details on each doctor's professional background, evidence of malpractice insurance, hospital privileges, and attestations.

Although it takes a lot of time, some medical billing services, like CareCloud, may take care of it for you. To understand more, read our comprehensive CareCloud medical billing review.

Putting in place policies, processes, and compliance records

The success of your practice depends on having a set of responsible, current, and provable rules and processes in addition to abiding by all legal requirements.

All of your daily tasks, including as data entry, billing, and patient encounters, should be covered by these standards.

You should routinely update your policies and procedures to ensure they don't become outdated and ineffective because the healthcare environment is constantly evolving.

Getting insurance

Every company owner is aware of the value of insurance, but doctors and other healthcare professionals need it even more. You'll need medical malpractice insurance first. In addition, you can be required to accept additional coverage, such workers' compensation, by the bank giving your loan. Zetter advised, "You need to consider insurance." "You'll require general liability and malpractice insurance. Due to bankers' requirements, you will likely need liability and life insurance at the very least.

5Let others in and assess how the practice went

Congratulations! If you've come this far, you've given a lot of your blood, sweat, and tears without receiving a penny in return.

But once you get the chance to cut the ribbon and welcome your first patients to your very own medical office, all of your hard work will have been worthwhile.

Give yourself a pat on the back because it's an achievement that many healthcare professionals don't get to experience in the modern medical field.

Once your firm is established and operating efficiently, you should set up an accountability system. Even when you've chosen an office manager you can rely on, how can you hold them accountable while you're always seeing patients?

Employ a consultant or accountant with knowledge of overseeing medical practices to review operations from time to time and report back to you.

Why you ought to start your own medical office

Consolidation in the healthcare sector is happening at a fast pace, which may be explained by the inherent risk, up-front costs, and difficulties of starting your own medical practice. 3,483 hospitals in the United States are a part of a multi-hospital system or diversified single hospital system, according to the American Hospital Association.

Through 2025, when the healthcare sector is anticipated to reach a value of $6.99 billion, this trend is most likely to continue.

The power of well-known hospitals and huge corporate systems over smaller healthcare providers has increased as the industry's management has shrunk to a small number of people. Joining these conglomerates appears to be the practical option for many providers.

Why start a medical practice on your own after investing so much time and money in medical school when you could easily transition into a well-paying corporate position where business operations are already established and there are no overhead or startup fees for you?

First of all, the emergence of smaller, private practices increases competition and the profit margins' distribution over the entire health sector. Additionally, it implies that a greater number of healthcare professionals will have greater autonomy and be allowed to choose their own work processes.

The expansion of healthcare access to nearby communities that might be presently underserved is another benefit of smaller operations.

Types of medical businesses you could want to start

There are five different sorts of medical practices to think about if you decide that opening a solo practice is in your future.

• alone in practice

You assume practically all of the responsibilities when you open a solo medical practice. This provides you complete control over how your practice runs, but you might have greater initial expenditures for marketing and medical equipment, and you'll undoubtedly need to put in more hours since you'll be juggling both the administrative and clinical sides of things.

You will also assume all the extra risks associated with opening a business on top of that.

• Group Practise

Because you share the workload with other medical professionals in a group medical practice, you'll probably work less. The full autonomy you get with a solo medical practice is sacrificed in exchange for these shorter hours, but you might have easier access to operating cash, which would minimize your initial costs.

• Owned by a hospital

Starting a medical practice within a hospital network will entail working to a set schedule and subject to some staff restrictions, but it also gives you access to the hospital's working cash and marketing tools.

You'll lessen the risk associated with launching a new firm, but you might not have as much personal freedom and flexibility; you'll probably have to operate within restrictions set by a medical board.

If you're interested in urgent care, hospital-owned enterprises may be the best option for you as joint ventures with hospitals make up an increasing portion of urgent care clinic ownership.

Federally approved health facility

The process for launching a medical practice inside of a federally designated health centre will be quite similar to that of launching one inside of a hospital. You could encounter small working capital caps with federally qualified health centres due to federal resource allotment.

Educational health facility

Starting a medical practice inside an academic health centre minimizes risk while giving up autonomy, just like with hospital-owned practices. Contrary to a federally designated health facility, however, there won't be many restrictions on working capital.

Educational health facility

Starting a medical practice inside an academic health centre minimizes risk while giving up autonomy, just like with hospital-owned practices. Contrary to a federally designated health facility, however, there won't be many restrictions on working capital.

Needs for construction

Start as soon as feasible if you need to do construction on your office space. If not, you can find yourself without a functional space much after your intended opening date. Finding a space that is already furnished and ready for you to move into is always ideal, but such locations are not always accessible.

Early on, evaluate your area to ascertain the extent of the work required, and then begin hiring the contractors who will complete it. If everything goes according to plan, construction will be finished when you're ready to start buying equipment.

Adapting laws and payer guidelines

The healthcare sector is heavily regulated, with intricate laws governing almost everything a provider does. Navigating the maze of legal regulations and payment laws can be difficult for a small practice that doesn't have hordes of lawyers on retainer like a big hospital system does. Understanding what it takes to be in compliance is crucial, though.

Even if you're now compliant, you'll need to keep an eye on the future because the laws governing the healthcare business are in fact frequently revised and amended.

Advertising

It can be simple to forget about marketing in the chaos of patient treatment once you do open, after all the essential preparation for opening day. For general practitioners who won't be able to rely on a referral network for their patients, marketing and promotion are just as essential to starting a private medical practice as they are to launching any new business.

Consultors

Even though it is useful, this starting a medical practice guide is by no means complete, and no amount of research can adequately prepare you for all that might occur when you begin going. You need actual experience for it, and there are many experts with tons of experience. Employing a consultant with extensive experience starting medical practices will ultimately save you money and help you avoid costly and time-consuming blunders, according to Zetter.

CONCLUSION

Why starting a medical practice is challenging but doable

An independent medical practice requires different approaches than any other kind of business. After all, the majority of other business types don't literally hold the lives of their clients in their hands, much alone all the regulatory issues this venture involves.

You have the essentials of what you need to know to begin your practice with this manual. The trip will be long and difficult, but it will now be simpler and perhaps worthwhile.