Starting a new medical practice can be a nerve-wracking process, especially considering the current state of the health care industry. American Medical Association leaders recently acknowledged a “tide of consolidation” that that has threatened the viability of small, independent practices.
As a result, it’s more important than ever for physician entrepreneurs to plan ahead when opening a private practice.
That’s why we put together this new medical office checklist. It combines insights from several industry associations, physician surveys, software tips and an interview with start-up practice expert Dr. Pamela Wible.
Simply download our checklist and read the detailed explanations below for an easy-to-follow guide on what you need to do before welcoming any patients.
We should note this checklist excludes a few tasks that everyone opening a new practice should complete early on, such as:
- Obtaining a state medical license
- Applying for a narcotic license (if necessary)
- Choosing a location
After that’s done, you can start checking off the items on our main list. Here are some more details and expert advice to help you with each phase.
Preparing the Practice
First, you have to decide what type of medical practice you want to open. Here are some options to help you brainstorm:
|Traditional||Physicians collect patient co-pays and bill insurance companies in order to receive reimbursements for services rendered. They see many patients (between 3,000 to 5,000, according to some estimates) in order to cover costs.|
|Concierge (aka boutique or retainer practices)||Patients pay a flat membership fee for medical services instead of, or in addition to, billing the patient’s health insurance company. Physicians see fewer patients than usual and are therefore expected to be more accessible. Read more about concierge medicine here.|
|Direct primary care (aka ideal medicine or direct pay practices)||Patients pay a flat membership fee for medical services, but fees are usually lower and insurance is never accepted. Physicians sometimes see fewer patients than usual. They may or may not make themselves more accessible to patients.|
Dr. Pamela Wible favors the direct primary care model, particularly for physicians who are going solo because they’ve had bad experiences with employers.
“Many doctors end up recreating the high-overhead, high-volume clinic they were trying to escape. Don’t build your own prison.”
Pamela Wible, M.D.
Some physicians get burned out dealing with insurance payers and having to comply with ever-shifting government health care regulations to meet reimbursement requirements. If that sounds like you, consider starting a concierge or direct primary care practice. This model provides a slower pace because there are fewer patients to treat and requires less red tape.
Before finalizing your decision, think about what kind of business entity is best for you. For example, do you want a sole proprietorship? A partnership with a colleague? A limited liability company (LLC)? This resource breaks down the pros and cons for each of these options and more. You may choose to consult with a lawyer for this task.
Once that’s been determined, you can open a practice checking account at the bank and apply for a loan if you need one. This is also a good time to find an accountant, consider purchasing medical accounting software or both.
Lastly, you’ll need to call the IRS in order to obtain a federal tax identification number (TIN) or an employer identification number (EIN). You should also register for state and local taxes, which you can learn more about here.
Malpractice insurance is important, but it shouldn’t cost you an arm and a leg. Wible says insurers regularly provide discounts that can save you up to 86 percent on your premiums. While you’re shopping around for medical liability insurance, ask carriers if they also offer corporate, health and disability and/or personal life insurance coverage.
Another key task for organizing operations is to develop a fee schedule. One of the best ways for doctors to do this is to see what other providers in their area are charging.
Ask colleagues for a copy of their fee schedule to get some ballpark figures, then see what adjustments you need to make in order to make ends meet. Check out the AMA and CMS websites for additional resources.
To wrap up the planning phase of this checklist, you may have to prepare a Medicare and/or Medicaid provider application. You should also start the process of getting credentialed with private health insurance companies, since that can take 90 days or more. Direct primary care practices and some concierge practices don’t require these additional steps.
Buying Software and Supplies
As a trusted resource for medical software reviews and recommendations, Software Advice has spoken with thousands of independent physicians. In a recent study of these interactions, we found that a significant percentage of doctors asking for software recommendations were starting a new practice.
Many of these doctors tell us they’d like to choose an electronic medical records (EMR) system so they can be “organized and efficient from the beginning.” Follow their lead by evaluating some popular systems and read more advantages of EMR adoption here.
Another health IT tool worth investing in is medical billing software that allows you to handle coding and collections in-house.
However, a dedicated billing system may not be necessary if you decide to use an outsourced service instead. Think carefully about how you’d like to handle this important component of practice management.
When it comes to supplies, frugality is a good idea when you’re just getting started. “Don’t fall into the high overhead trap,” says Wible.
She explains there are various pieces of professional medical equipment you can get for free by reaching out to retiring doctors or overstocked hospitals.
Here’s a list of common necessities:
- Equipment: Exam table, stethoscope, otoscope, blood pressure monitors
- Hardware: Fax machine, computer(s), phone(s), credit card machine
- Supplies: Ointments, gloves, scalpels, syringes, gauze, antibacterial wipes, tongue depressors
- Services: Utilities, phone and internet
- Clothing: Lab coats, staff uniforms, name tags, patient gowns
- Furnishings: Chairs, table and decorations
Defining Staff Workflows
At this point, you should be able to tell how many staff members you’ll need to help you run the practice.
For example, a doctor that chooses not to outsource billing and expects to build a large patient panel would benefit from a dedicated employee to handle billing and scheduling, as well as a nurse or medical assistant.
Define a set of expectations for each role before the hiring process begins, and write an employee handbook that reiterates those expectations.
In that handbook, you should include your office policies (e.g., time and attendance) and benefits (e.g., health insurance options and paid time off). Take the time to set up these benefits and arrange for payroll services, if needed.
It’s also key to address patient privacy and security issues as you’re figuring our staff workflows. In order to comply with HIPAA and HITECH, you’ll need to conduct a security risk assessment. This assessment should include documentation of the following:
Finally, don’t forget to create a HIPAA Notice of Privacy Practices (NPP) for patients to sign when they fill out their registration and medical history forms. Read this article for more on HIPAA compliance and a link to NPP templates.
Promoting Your Services
Once all the logistics are handled, it’s time to start promoting the practice so you can attract patients. One of the best things you can do is network with colleagues by joining a medical association or signing up for a physician-only social network.
You’ll be able to meet specialists in your area that can refer their existing patients to your practice. You can also get valuable advice from peers about how they promoted their practice.
“Make sure you ask for help from a trusted mentor who has already launched a successful clinic,” says Wible. “Too many doctors don’t ask for help and try to do this on their own.”
When marketing your practice, it’s important to establish an online presence as soon as possible. In a recent survey, we found 77 percent of U.S. patients report using online reviews as a first step to choosing a doctor.
Another good strategy is to get involved with the community around your practice. This will help you establish personal connections with potential patients and get your practice’s name out there.
Consider volunteering to give a speech at community gatherings (e.g., the local chamber of commerce, church groups etc.) or host a health fair at a nearby park.
We hope this checklist helps you open a thriving practice you’ll love working in. It may be intimidating to strike out on your own, but the freedom you’ll feel once you’re up and running can make all this work worthwhile. Here are some next steps that will help you get there:
- Check out our EMR ratings, reviews and demo videos to select a system that complements your care model. You can even call us at (888) 918-2745 to get free advice from a clinical software expert.
- Study strategies for successful practice management on our resources page. We cover a variety of topics to optimize your operations, from ICD-10 coding guides to HIPAA compliance recommendations.
- Email me at email@example.com. Do you have questions about any of the items we included in this checklist? Are you stuck on one of the steps? Drop me a line so we can work on a solution.