Getting started in private practice

Medical school teaches us how to care for our patients but offers little to no instruction on the business of medicine. That’s why many physicians hesitate to start their own practices and why the vast majority of us go into big hospital systems for work. For those who want to take on the exciting challenge of operating a small business, we’ll share some important steps in starting a new practice and what you need to do before opening the doors.

Securing funding

The first step in starting a private practice is to secure funding. When leaving medical school with hefty loans, borrowing more money to start a practice can be scary. You have to secure enough money for your startup fees, including real estate, potential construction costs, equipment and furniture, initial supplies, salaries and attorney, accountant and consultant fees.

You must also have enough money to support the practice and your personal finances, as it will take time to become profitable. How much money you need will vary depending on your location, your specialty and many other factors, so it is wise to consult with an accountant or practice consultant to figure out how much you’ll need.

Now that you have secured funds, the next and most important step (just like any other business) is finding your location. To start a successful practice, make sure your location can be easily located and isn’t oversaturated with competition. Plus, make sure there’s a demand for your specialty in the area. Online tools and consultants can help with this process.

Location, location, location

Once you settle on an area, the next step is finding your office space. Seek a place that fits your size needs, something big enough so you won’t quickly outgrow it.

Next is negotiating the terms of your lease. If you are renting, this should include the years of term, building construction costs into the lease with the possibility of changing spaces during your contract term if you eventually need a bigger space and signage. Finally, before you can start seeing patients you will need a Certificate of Occupancy from the city or town.

While you are working on securing your location, you must also start working on obtaining your registrations and credentials, as some of these can take months. These include:

• Incorporating your business
• Obtaining a tax ID
• State license and DEA, if you don’t already have it
• Provider enrollment and credentialing with health insurance companies
• Applying for hospital privileges, if needed
• Opening a business banking and credit card account
• Obtaining lab certification, if needed
• Obtaining medical malpractice insurance.

Once you begin zeroing in on a date to open your practice, you have to start working on the things that will make your practice run and thrive. In today’s business world, you must have a good, user-friendly website that is optimized for Google SEO and a Google My Business page.

Keep in mind that nowadays a significant percentage of your patients may be finding you during searches for relevant terms — either a condition or a treatment. So this is your opportunity to attract patients seeking the types of treatments you offer.

You must also have a social media presence, so hiring a good marketing company is essential. You want to make sure that all of this is up and running prior to opening. Hiring an IT company and finding an EMR that works best for your setup and specialty is also essential to make sure your office is running as efficient as possible.

Staffing considerations

As you get closer to opening, the last important step is hiring your staff. The biggest mistake new practices make, including mine, is overstaffing to start. There will be days in the beginning of your practice where you have no patients. Paying a large staff while you have minimal patients will drain your money very quickly. If feasible, you want to hire people who are willing to take on multiple roles at first, such as office manager/biller and MA/front desk.

As your company grows, you can hire additional staff as needed. You may also consider using an outside billing company at first, although we personally prefer to keep our billing in house.

All of this can be very overwhelming for someone who wasn’t taught how to operate a small business. It may be beneficial and more efficient to hire a consulting company that specializes in practice startups to help speed up the process and take a lot of the paperwork off your hands, allowing you to work and save some extra money while everything is getting done.

Even with the help of a consultant, you have to give yourself ample time before you will be ready to finally start seeing patients. We suggest planning six months to a year in advance, as you will inevitably encounter many steps that are taking longer than anticipated.

Going forward, we will discuss the everyday challenges of running a private practice. While it can all be very daunting, the reward can be well worth it. We would like to hear from you about any specific questions or concerns you may have about being in private practice so we can address these in future articles. Please leave a comment below or send an email to [email protected].