Starting a physician practice is one of the most rewarding things you can do. There’s an incredible amount of opportunity for entrepreneurs with fresh ideas to bring change to local healthcare. The financial rewards can be significant, too.
One year into launching Symphony Health, we’re so pleased that we made the leap. It’s quite something to see your vision take shape and to work in the kind of clinic you always dreamt of. Having said that, it’s easy to forget how overwhelmed we felt as we started out. Likewise, if you are thinking about starting your own practice your head might be spinning as you contemplate all that is involved.
There’s an incredible amount of opportunity for entrepreneurs with fresh ideas to bring change to local healthcare.
1. Develop a Business Plan
It’s easy to view a business plan as a box tick exercise to gain funding from your bank. Well at least that’s how I saw it! However, I’m amazed by how much I keep coming back to our business plan even now we are established. Taking your time to do this well is a long term investment.
A good business plan doesn’t start with your laptop open. It starts by getting out and researching the medical needs of your community. It requires connecting with people, understanding their needs and finding out about potential competitors. It also requires that you dream out loud; sharing your vision and receiving feedback from people that know what they’re talking about.
“A good business plan doesn’t start with your laptop open. It starts by getting out and researching the medical needs of your community”.
When you feel like you’re bursting to write things down only then are you ready to translate this onto paper. I wrote and rewrote ‘our vision and objectives’ what felt like a hundred times until I felt it concisely reflected what we wanted to do. The great benefit of taking time to do this is that it then made it easier to write the rest of our plan.
Outlining your clinic’s structure, services, staffing requirements and marketing strategy is so much easier when you can clearly articulate your objectives.
2. Create a Budget
It’s our experience that most directors of medical clinics are primarily driven by the change they can bring to patient’s lives rather than generating profit. Having good business acumen is often seen as secondary to patient welfare. However, you will best care for your patients needs and provide longitudinal care only if there is good financial planning from the outset.
When we started our new business we both realized that financial planning wasn’t our strength. We therefore found consultants that had experience of creating budgets for medical practices. They created for us a highly detailed, scalable 5 year budget on an app that we can edit and update as we grow. It’s proved to be an invaluable resource for us that we still go back to time and time again as we make decisions on areas like staffing and major acquisitions.
You will best care for your patients needs and provide longitudinal care only if there is good financial planning from the outset.
I would strongly advise anyone starting a new practice to find consultants that can help you with your financial projections and can give you the tools to scale your budget going forward. Your bank will be grateful for this too!
3. Secure Funding
Cash flow is everything! Like any small business for the first 9 months of Symphony Health’s operation an endless stream of finance was leaving our clinic. The offices we rented, our staff, medical equipment, office supplies and insurance needed to be acquired long before we could afford it.
Thankfully we found a bank representative with experience of dealing with new medical practices. We were given a bank account with a healthy line of credit and a good credit card that has seen us through our first year of operation until we can now turn a profit.
I’d encourage you to make connections in the financial world to discover those lenders that look favorably upon medical startups. Don’t just go with the bank ‘you know’. Shop around. Research and reach out to different financial institutions to see what they can offer. Most importantly, find a bank representative that understands and believes in what you are doing.
Our medical association connected us to a financial management company that has been invaluable in linking us up with the right people. Likewise, contacting your medical association would be a good place for you to start to build financial connections too.
4. Build your Network
As you read on, you’ll see that most of the steps we’ve taken on our journey were only possible because we spent time networking with other healthcare professionals and organizations. From the office that we now lease to recruiting the staff we have, the relationships we’ve established have been a huge help.
When you start out you’ll quickly notice the areas where you’ll need help. There will be gaps that you need to fill, be it finding a supplier for your office supplies, medical supplies or finding reliable cleaners. You’ll need quick referrals for a lot of these things that a good network will be able to give you.
Where you may struggle to build natural connections I would highly recommend the use of social media sites. I’m amazed by how helpful websites like this are in linking fellow professionals together and I’d encourage anyone to make good use of them.
You’ll need quick referrals for a lot of things that a good network will be able to give you.
5. Choose your Location
It was because of our connections that we didn’t need to find a building to operate from. Instead, it found us! Two local Family Doctors who were about to retire had heard about our plans and approached us to lease their medical office.
After considering all our options we opted to take them up on their offer. The obvious advantage was that it helped us keep startup costs down, acquiring all of their equipment and office supplies on the cheap. It also took away the time burden of purchasing everything that we needed to start operating. On top of this, the clinic already had a presence and was known by the community.
There were some drawbacks. The office we inherited was dated and needed a lot of work to update it. The lease we negotiated was complicated by the emotional attachment the retiring doctors had to their clinic of 30 years. We also had to fight hard to establish our own culture in the clinic. Many patients would turn up expecting things to be the same without realizing that we were a new medical practice with new staff and new ideas.
The alternative would have been to lease or purchase an empty office space and build out your clinic from scratch. In an ideal world this would allow you to create a clinic space that serves your vision from the start. Though taking this route is much longer and more costly. It’s this that ultimately persuaded us to make the decision we did.
I would advise you to take your time when deciding upon your location. Consider things such as footfall, patient convenience, parking and of course the price of a lease or purchase. Do bear in mind that buildings with the right medical zoning are often hard to come by and the licenses required to redevelop them can be slow to come through.
I’d strongly encourage anyone to do what we did and look beyond real estate by asking local medical professionals for any inside knowledge on doctors that may be soon to retire.
6. Recruit and Retain Qualified Staff
Having committed to a large office space with room for 6 doctors and a staff team, we needed to fill it!
The key for any successful medical practice is to hire skilled and licensed physicians who have gone through the full credentialing process. Ultimately it’s doctors who have a good reputation that will attract people to your clinic. It’s therefore incredibly important that you have a plan in place for how you are going to attract these doctors and retain them going forward.
Ultimately it’s doctors who have a good reputation that will attract people to your clinic.
Our plan for recruiting doctors has meant making good use of our connections and networks. Then articulating to prospective physicians a clear and ambitious vision of where we are heading. We make a commitment to providing them with up-to-date technology, equipment and a polished place to work. We also work hard to give them the best staff we can find.
When it comes to office staff we were burnt early on when we hired someone who wasn’t suited to the role. Through this experience we learned the importance of working with Human Resource specialists to help us fine-tune how we recruit and look after our staff. They now handle this whole process for us, helping with interviews, drawing up contracts, sorting health insurance and dealing with workers’ compensation. I would recommend any new clinic to outsource their HR needs to companies like this.
I'll also point you toward this guide for hiring a practice manager—in the beginning, you might be your own practice manager, but very soon, you will probably need someone to take on this responsibility.
I would also recommend that you find staff that align with your clinic's values. When posting a vacancy online use reputable job search websites that can do a lot of the screening for you. Then take the time to structure your interviews so that you can assess how well each candidate matches the values and expertise you are looking for.
7. Obtain necessary Licenses, Permits and Insurance
Undoubtedly the hardest lesson we’ve learnt!
For obvious reasons healthcare providers are scrutinized more than most businesses. You will therefore need to make doubly sure that your clinic has gone through the full incorporation process and has all the correct medical licenses. At the same time, remember to get adequate insurance coverage!
Project managing your time is essential to making sure that nothing gets missed.
Life in those early days of setting up your clinic will be relentless. You will simultaneously be managing a new staff, bookkeeping, procuring office equipment, setting up policies and procedures as well as managing the development of your office space. It makes me sweat just remembering it all!
Project managing your time is essential to making sure that nothing gets missed. It will be particularly tempting to skim through all the paperwork that will be required of you. Which is sadly something that came back to bite me when we were forced to close through a sewage backup flood to the clinic. It was then a hard pill to discover we were underinsured!
If you don’t have a keen eye for detail my advice is to employ a commercial lawyer to make sure that you adhere to all the regulations that are required of you. They will also be able to tell you if you have good liability insurance or malpractice insurance. I would also recommend shopping around a variety of insurance companies to find a broker that understands your practice needs.
8. Develop a Marketing Strategy
Regardless of whether you’re a primary care clinic or private practice you will need a good marketing strategy. Of course, there are clinics in locations with few doctors that won’t need to work hard to attract patients. Though even then having a good online presence is still important for helping people find you and understand the services you provide.
A stale website can easily communicate that other parts of your clinic are stale too.
Your website reflects so much. For most people it will provide their first impression of your clinic and their doctor.
More than that, the concern for our website is what it says to prospective physicians who might want to work with us:
- Does our website tie in with our recruitment strategy?
- Does it win doctors to our vision?
- Does it reveal our core values and reflect how we want to be seen?
It never ceases to amaze me how poor some clinic websites can be. Think about what that communicates to a patient. A stale website can easily communicate that other parts of your clinic are stale, too, which is why the industry standard is to refresh your website every 2 to 3 years.
You will need to budget for this. Particularly because a good website should cost you anywhere between $5000 - $20,000 (USD). Make sure you factor this into your financial projections from the outset.
9. Set up your Infrastructure
The best opportunity you will ever have to provide your medical practice with the infrastructure it needs is before you open your doors. This means choosing and implementing the right electronic health record system (EHR) for your clinic. It will be the most important of your practice management toolkit that you will provide your staff and doctors with.
The best opportunity you will ever have to provide your medical practice with the infrastructure it needs is before you open your doors.
Electronic health records will help your staff and doctors to schedule patients, view their medical records and input all of their medical billing inline with the fee schedule. It keeps track of Medicaid and Medicare and enables payers to settle medical invoices. For you, as the director, it will help you track reimbursements and will show you how financially healthy your clinic is.
The problem with EHR systems is that they are notoriously hard to change once you are up and running. Therefore take your time to research the various EHR’s available before you start operating. Consider if it serves your objectives and values. Invite each EHR representative to pitch their services to you and ask around other medical clinics to get their experience of the EHR they use.
We choose the EHR we use for 4 primary reasons:
- It enables patients to interact with the clinic online saving a lot of our staff’s time from dealing with telephone enquiries.
- It links doctors and staff together. For a group practice it enables teamwork and collaboration.
- It’s intuitive and easy to use meaning there are less opportunities for staff mistakes.
- It’s developed by a large reputable company that is committed to resourcing the improvement of the EHR going forward.
10. Continuously Evaluate and Adapt
Your first year of operating will be a ‘hands on’ kind of year and you will be needed to troubleshoot a lot. Don’t be alarmed when things don’t go as expected, they rarely do! It’s perfectly normal for every small business to have teething issues, and a medical practice is no different.
More often than not, I found myself being the calm and reassuring voice in our clinic. It’s particularly easy for staff who have joined from more established clinics to panic when they experience an issue. Your job is to bring peace and order, finding quick solutions when things go wrong.
More often than not, I found myself being the calm and reassuring voice in our clinic.
This last year has been one of improving workflow around the clinic, fixing our processes where they are causing bottlenecks and making sure our patients receive the best patient care they can get!
Gradually we are getting to where we want to be. My advice to all others starting their own medical practice is to be patient. Prioritize and give yourself to the most important issues you can and don’t sweat the things you can’t control.
Building a great clinic takes time, but your hard work and diligence will pay off in the end.
Connect with us
Starting Symphony Health was a new experience for us. Kate (my wife) is a Family Doctor but she had little understanding of practice management. Similarly, I had experience of management but no understanding of what it meant to provide healthcare. What we did have was a vision but then little idea of the steps we should take to get there.
We were grateful to find contacts and connections in those early days that helped us take the right steps forward. I’d encourage you to do the same. Surround yourself with people that can help you where you feel weakest. Find others who have done the same thing and learn from them.
Being a business owner of a medical clinic is a huge responsibility that requires careful planning, compliance with regulations and commitment to patient care. The biggest encouragement I can give you is, "don’t do it alone"!
This last year we’ve been able to test out all the advice we’ve been given, and it’s served us so well. To the point where I now feel confident to help others do what we’ve done. We will keep posting to and hope to connect with other medical practice owners through The Medical Practice site and community.