In the United States, there are about 230,187 medical practices.
If you’re a medical professional, starting a medical practice is one of the best ways to hone your craft, have control, and provide patients with excellent care.
How to Start a Medical Practice: The Ultimate Guide
Although opening a medical practice is a lot of work, this guide can help give you an overview of how to get started.
Read on to learn how to start a medical practice.
Different Types of Medical Practices
If you want to start a medical practice, the first thing you need to do is becoming familiar with the different types of medical practices—the type of practice you should depend on your field and finances.
Do you want to go into business on your own? If this is the case, then you should look into opening a solo practice.
With a solo practice, you will have the freedom to choose all aspects of the business, such as medical equipment, marketing, and design.
However, the downside of starting a solo practice is the start-up costs. Because you will not have a partner to share the initial financial costs, you will have to front all of the costs and risks of starting a business.
Let’s not forget you will have to work longer hours to get your practice off the ground.
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If you don’t want all of the responsibility of starting a medical practice to fall on your shoulders, opening a group practice is the best choice. Taking on partners and opening a group practice will help you share the responsibility, and you will also have low start-up costs.
Another option for opening a medical practice is to do it through a hospital network. The upside to opening a hospital-owned practice is you will have access to the hospital’s resources, such as marketing, capital, and equipment.
When you open a medical practice through a hospital network, you also minimize risk and access, medical boards. However, when you open a hospital-owned medical practice, you will be subjected to the hospital’s regulations and policies.
Opening a federally-owned medical practice is similar to opening a practice through a hospital. You will have access to federal resources, but you will also run into hiring caps and other restrictions.
Steps to Start a Medical Practice
Once you decide the type of medical practice you want to open, the next step is to start opening a medical office. While there’s no specific formula to starting a medical practice, there are a few crucial steps you need to prioritize.
Securing Financing and Obtaining a Pro Forma
The first step medical businesses need to secure before anything else is financing and obtaining a pro forma, which is essentially a business plan.
In the pro forma, you will need to include every important detail about your practice to convince lenders to invest in your business.
Your business plan should include project medical equipment-related expenses, debts, and projected revenues.
Many medical professionals choose to hire a specialist to help them prepare a pro forma. A specialist will help outline the risks, expenses, and projected revenues to present to the banks and lenders to secure financing.
Purchase Essential Medical Equipment
Once you secure financing, the next step when opening a medical office is to purchase the necessary equipment to get the business going.
Because you’re going to have patients, the first thing you need to do is ensure you have reliable record keeping.
Many modern practices choose to go for electronic health record systems to increase efficiency and reliability. With this system, anyone working at the practice can access medical records whenever they need to see a patient.
Productive and efficient management is crucial for medical businesses to grow, so you also need a practice management system.
A practice management system will help you monitor everything from staff management, patient information, and billing. However, you will also need to hire an experienced office manager to ensure everything works as it should.
You should consider purchasing other equipment and software includes a medical billing service, transcription software, background check services, and creating a modern office design.
Other Necessary Paperwork
Before you can open your medical practice doors to your patients, you need to sort out a few more tasks.
For tax purposes, you need to register your business as a legal entity and obtain a tax ID to pay your taxes. When you register your corporation as a legal entity, ensure you do it as a limited liability status, known as an LLC.
When you register your medical practice as a limited liability corporation, your personal assets will be protected if you ever get sued.
If you plan to hire medical staff right away, you will need to submit your health care provider’s credentials. Before you can submit claims for payment, you will have to complete the credentialing process.
Because this process can take up to three months, you need to submit it right away.
Purchasing insurance is also a crucial step when starting a medical practice. While most businesses should purchase insurance, this is especially important for medical businesses.
Medical malpractice insurance will cover you in the event a patient files a lawsuit against your practice.
Establish Procedures and Policies
Another crucial step when opening a medical practice is to set policies and procedures. To ensure your practice is always in compliance with legal regulations and operations run smoothly, you will need to set your staff standards.
Some of the basics you will need to cover are data entry, billing, daily operations, and patient interactions.
After you open the doors to your medical practice, you might have to work out some kinks to ensure these policies are effective.
Now You Know How to Start a Medical Practice
Now that you know how to start a medical practice, you’re ready to start your business.
Remember, before you can start your medical practice, you should decide what type of practice you want to open, create a business plan, obtain medical software, and purchase insurance.
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