The thought of starting a practice provokes fear in many, but it should not steer you away. In fact, patients receive the best care when their physicians maintain control of their own practice. Starting a successful medical practice offers many advantages, such as autonomy and the ability to manage and make business decisions pertaining to the practice.
To help you get started, we have compiled a best practices guide for what your property needs as you start a medical practice.
Advantages and Challenges of Managing a Private Practice
- You take ownership of everything including HR, marketing, finance, IT, contract negotiation, revenue cycle management, and facility management.
- You are the lead in the practice. How you run to how you imprint on the practice is within your creative execution.
- The environment fosters a more relaxed and family-like atmosphere.
- Decision making can be nimble, straightforward and swift. No downtime is needed, so you can help your practice to be timely in response.
- There is no internal career path. You’re at the top of the position.
- You will lose money every time a new non-revenue generating position is added or any time equipment needs to be replaced.
- Lack of readily available after-hours coverage
- Financial risk
8 Best Practices to Starting a Medical Practice
Location is Key
Choose your location wisely. Locate your medical office in a highly visible, heavily trafficked area. You will get new patients just by being visible.
Other factors to consider are:
- Competition. Research and consider how many other physicians are in the area.
- Economic Factors: Does it support industries, schools, or government offices? What is the income bracket of the neighborhood (i.e. Medicare and Medicaid population)?
- Demographic: Understand your community and market (i.e. population, age, sex, race and educational factors of the area).
- Availability of Space: What is the real estate available for medical office space? Will you have to lease non-medical space?
Rent, Don’t Buy
Commercial real estate is risky. Rent your property until you’re sure you are staying.
Get Your Credentials
Start early. You will need to go through a process known as ‘credentialing’ to accept government or private health insurance from patient. The credentialing process can take up to six months. You will be asked about your medical education and residency, proper license and malpractice insurance. Not all states require malpractice insurance, but having it will help protect your personal assets in case a patient sues you. More information is available at your state department of insurance.
Which public health insurance programs you should consider largely depends on your branch of medicine and practice. If you practice in low-income areas, you might consider participating in Medicaid.
Create a Marketing Strategy
Create a marketing strategy that suits your demographic, practice and budget – whether it is in social media, event promotion, or in-person. For example, community events are a great way to introduce yourself to people in the neighborhood. Meet people face-to-face and proactively connect and engage with pharmacists, the police department, the township and the list goes on.
Hire Good Staff
Your staff is the front line of your medical practice. Patients will choose you or lose you based on whom you hire. Hire carefully, and look for a candidate who is qualified, passionate, well-versed, charismatic, and organized.
Hire a Good Accountant/Attorney
A good accountant is key to starting a medical practice. Business accountants can assist in complex taxes and not all accountants know the nuances of medical practices. You can contact your state medical societies for recommendations.
As a new business owner, contracts from leases to sub-contracting is inevitable. In part to this, it is always wise to have an attorney review your contracts.
An incorporated business has tax benefits, such as deductions in medical insurance, travel expenses, and daily business expenses. You can also deduct your business losses, which is more difficult if you are a sole proprietor. Incorporated income earned as a corporation is not subject to Social Security taxes, only the portion you take home as salary. Lastly, corporations tend to be taxed at a lower rate than self-employed business owners.
Know the Laws and Regulations
You are responsible for any mistakes made in your practice. Go through your accounts receivable on a monthly basis, and make sure coding and billing is accurate and by law.
For further advice on starting a medical practice in LA, as well as finding the perfect medical property for your practice, contact Boulevard Medical Properties today.