Healthcare

How To Set Up A Family Medical Center | Doctor’s Office

A Healthy Business Decision

Thousands of new doctors complete their formal medical training and enter clinical practice each year. Most of these doctors will end up in private practice working in inner-city emergency rooms or rural towns. When considering starting their own general practice, young, inspired doctors quickly recognize a real shortage of primary care physicians in most areas though there are plenty of patients. You can open a practice almost anywhere in the country and quickly become successful in a matter of months. However, there are a few challenges to opening a primary care practice; first, it is not cheap. Secondly, one must comply with many rules and regulations that govern patient confidentiality and care. Third, to be reimbursed by Medicare, Medicaid, or thirty-party insurers requires a lot of paperwork- which can be a long process.

Why Set Up A Private Practice?

Having spent hundreds of thousands of dollars to acquire a medical degree, you are now qualified to work in any established hospital or medical center or even start your own children’s medical center. Why go through the stress of setting up your private practice? Well, this is totally up to you. However, here are three reasons you should:

Financial freedom –as cliche as this may sound, setting up any business is the gateway to financial independence. A sense of ownership/responsibility usually accompanies that feeling.

Job creation —when you set up your practice, you are contributing to growth in the job market.

Expanding health care services – We can never have enough medical facilities. Setting up your’s will help society while offering more choices for people.

Here are a few valuable online resources to help you set up your family practice

What Kind Of Healthcare Business Should I Set Up?

Your choices include the following:

Go solo
Join a multi-specialty group
Freelance
Share clinic space with other healthcare professionals at a doctor’s office

Operating a primary care clinic is hard work; long hours and patient care can be time-consuming. Most primary care physicians do not have the depth of knowledge, equipment, or skills required to manage all kinds of ailments, so joining a group of specialists can be a good idea. Joining forces also helps cut down costs as everyone shares the expenses. Plus, if you go solo, you will run into trouble if you get ill yourself, or you’ll need a backup plan if you want to go on vacation. With a multigroup setup, you can always help your colleagues with their patients, and they will, in turn, ensure that you are covered when out of town or sick.

Buy Into An Existing Medical Center Clinic

If you intend to go solo, the best option is to buy into an existing practice instead of starting from scratch. This method ensures that you will already have patients. Fully trained staff and equipment will be available right away. The downside is that buying an existing practice can be a costly venture.

Share space: Most solo primary care physicians initially share space with another doctor or a group of physicians. Physicians can then share expenses, which helps lower costs. However, physicians are very competitive, and personalities can sometimes clash when working in a shared space environment.

Freelance Or Locums

Newly graduated primary care physicians will sometimes freelance for a few years before starting their own primary care clinic. Freelancing means covering doctors on holidays, working weekends and nights, and traveling to areas with a shortage of physicians. There is no overhead with freelancing or locums; you are only responsible for transport; many hospitals pay for accommodation and food though you’ll need to obtain your medical malpractice insurance yourself. You can make an excellent living, but you are not entitled to any benefits in some cases because you are not a full-time staff member. But you can save a large amount of money in a few years and then open your clinic.

What Are The Pitfalls Of Running A Primary Care Clinic?

Difficulty collecting payments: Sometimes, patients may have a lapse in insurance or issues with ongoing funding. It isn’t easy to collect if there is money owed. Further, the time spent collecting money from these delinquent patients is often a long, costly process.
Business difficulties: While many healthcare workers have ample medical knowledge, they often lack the business expertise to run a practice. Practicing medicine is a financial enterprise, and you’ll have to understand the business aspect of healthcare to survive.
Regulations and compliance: Healthcare regulations are continually changing. You are consistently required to keep up with new rules and regulations. Failing to comply can mean severe monetary penalties.
Rewards are limited: Unlike some specialists, income for primary care physicians can be relatively moderate. Since most primary care workers do not do extensive procedures, their reimbursement rates for consultation and follow-up visits are not very high. However, they make up for this by seeing a high volume of patients.
Reliable staff: When running a medical practice retaining staff can be an issue. Long hours and demanding workload make it difficult to keep staff. Plus, your team can frequently search for jobs to further their careers or increase their salaries. The only way around this is to offer regular bonuses, keep the staff happy and communicate.

Plan Your Medical Center Enterprise

Before you set up your primary care practice, it is essential to create a business plan to help you understand the business aspects of healthcare. A business plan will also help you anticipate future issues and is required when you apply for funding. The business plan should contain the following:

Should I buy an existing practice or start from scratch?
Should I go solo or join a multi-specialty group?
What are the startup costs for a primary care clinic?
What equipment will I need to run my clinic?
How big is my clinic?
How many people will I employ?
What permits and licenses are required to operate a primary care clinic?
Do I need insurance?
What are my maintenance costs?

Here are some handy services for building a business plan available online

Some business plan templates that you might consider:

Legal Entity For A Medical Center Enterprise

To start building your medical business, you must form a legal entity like a corporation. Because of complex healthcare laws, we recommend consulting with a healthcare attorney to determine what type of corporation you should create.

You will also need to apply for:

EIN
Register for state and federal taxes
Open a dedicated bank account

Here are a few handy links to help you build your medical practice

Check out these services that can assist you in getting your LLC started

Here’s a few government links you might want to visit

IRS Website

This site by the IRS is a must-see when beginning your LLC

National Provider Identifier Number

Today all healthcare providers who practice medicine need to have a National Provider Identifier number. This number is required when you apply to Medicaid, Medicare, and insurance companies. Without this number, you cannot get paid. Insurance companies use the NPI to track healthcare providers.

DEA Registration

To prescribe a controlled substance, you will also need to register with the Drug Enforcement Agency and get a DEA number. You can execute the application online, but it may take a few months to get the number. Suppose you have any criminal convictions. In that case, you may have to wait longer or may not be eligible for one, depending on the nature of the crime.

Collaborate With Ancillary Services

Many of your elderly patients may require assistance at home on various matters. Some may have financial difficulties, and others may be depressed. Partnering with specialty nurses, social workers, therapists, and certified nursing assistants is essential to provide the extra care your patients might require. Added care improves your practice and can result in more reimbursements from insurers.

Private Clinic Policy Manual

Creating a policy manual for all your procedures and services is crucial. This manual will ensure that you are in legal compliance with guidelines for practicing medicine. The manual should cover daily clinical operations, staff responsibilities, billing, coding, safety, and confidentiality. Your manual should be periodically updated to keep up with changing healthcare requirements.

Medical Coding And Medical Billing

Most of your income will need to be reimbursed by insurance companies. You’ll need to correctly code for all your services and procedures to get paid. Today, most coding and billing are done electronically. You’ll need to hire a certified biller and coder for proper reimbursement. Using the wrong codes for a procedure can result in under and overpayment. If the errors persist, it can lead to an audit by the insurers, creating a giant headache. There are many outsourcing services if you do not have the money to hire an in-house coder or biller. This process will relieve the workload and confusion among the staff.

Here are a few links to get you started with billing & coding

Funding Your Doctor’s Office

Overall, medical practices go bankrupt very often. Delivering healthcare is recession-proof, so obtaining funding is not that difficult if you are organized. Most lenders are willing to loan out money if you have a good credit score, at least a 20% downpayment, and a business plan. However, you should know that startup costs for a primary care clinic can be very high. Thus, the loan size you require may be substantial; you may have mortgage payments for a decade or sometimes longer.

A 24 Hour Walk-In Clinic Must Be Insured

All insurers will ask about your medical education and residency before accepting your application to see their insured patients. This credentialing process can often take 2-8 months, so it is essential to start the process early. You will also need to sign up with Medicare and Medicaid, no matter where you practice. The more insurers you sign up with, the more high-paying patients you will get.

Here is a list of some standard insurance companies

Malpractice Insurance

Anytime you deliver service to the public, it is wise to have insurance, especially if you provide healthcare services. Lawsuits are common, so you’ll need to have adequate medical malpractice insurance to protect you and your assets. Plus, it would help if you also had liability insurance if a patient trips or falls while in your office. Unlike in the past, medical malpractice cases have dropped significantly, and so have the premiums.

Here are a few medical malpractice insurance companies

Additional Requirements

Suppose you plan to do laboratory research in your clinic. In that case, you will need to be certified by the Clinical Laboratories Improvement Amendments program. The same applies if you perform x-rays in the clinic. You will not get reimbursed if you are not approved or registered with the appropriate agency.

Join The American Medical Association

Join the American Medical Association. You can receive the latest medical, ethical, and legal issues and up-to-date clinical practice management.

Here is a link to the AMA members sign up

Marketing My Healthcare Business

Because there is a tremendous demand for primary care physicians, you may only require short-term marketing in the local community. Some marketing ideas are simple and obvious, distributing fliers and handing out business cards to pharmacists and local hospitals. Many patients have been desperate for a general practitioner to support them for many years.

Since the covid pandemic, telehealth has become very popular in all states. So, it is vital to have a software program like zoom to interview and assess patients. We recommend telehealth care for non-emergencies only.

Check out these links for marketing your medical practice

Hiring Medical Staff

You should start the process of hiring even before you open your doors. You will need to hire certified and licensed nurses, a front office team, and ancillary staff to help patients with ambulation, general cleaning, and transport. To prevent staff turnover, you must hire people who have the same values as you do. However, to retain staff, the onus is on you to communicate with them, be friendly, and reward them for work well done.

Because medical information is considered confidential, anyone you hire must undergo a background check. Penalties for releasing patient information to anyone without consent are associated with heavy monetary penalties. Ensure that all your staff have the appropriate certification and license and have passed a background check.

Here are a few agencies that specialize in medical staffing

Electronic Health Records

An Electronic Health Record (EHR) system is now the status quo. There are many EHR vendors, and you need to shop around for the best system for you. In general, all the presently available EHRs offer the same services. Still, a few tend to have more ‘bells and whistles, ‘ like giving you an alarm when a patient’s blood work is not within normal or if a patient has missed an appointment. The key is ensuring the system has adequate security to protect patient data.

Practice Management System

Today a practice management system is highly recommended when running a medical clinic. This system usually incorporates the EHR and keeps track of all front office information, including coding, billing, and cash inflow. The system reduces paperwork, enhances efficiency, and eliminates duplicate records.

Medical Transcription Software

The days of writing patient data on paper are over. Today, everything is transcribed electronically. Several software programs allow for the transcription of patient data, and your choice of service is strictly personal.

Here are a few software programs for the medical industry

Doctors Office Payment System

Most patients will pay with a credit card, so you should install an appropriate payment system.

Equipment Suppliers

Here are a few medical supply companies

Equipment Needed To Set Up A Primary Care Clinic

Anoscope
Autoclave
AED (automated external defibrillator)
Audiometer/Tympanometer
Basic diagnostic (blood pressure monitor, thermometer, pulse oximeter, etc.)
Blood Draw, Exam Room, Office
Body Weight scales
Breakroom appliances (coffee maker, microwave, toaster, etc.)
Cabinetry and storage shelving
Centrifuge
Cleaning equipment
Clocks
Colposcope
Computers, printers, fax, and accessories
Computer Security system
CPR kit
Disposables- gloves, masks, gauze, bandages
Emergency equipment and supplies (airways, aspirators, bag/resuscitation mask, oxygen, etc.)
ECG unit and accessories
Exam tables (bariatric, pediatric, power controlled)
Eye charts
Fridge to store vaccines, medications
Furniture- Couches, chairs, desks, carpet,
Janitorial equipment
Laboratory diagnostic equipment (centrifuge, urine/chemistry/glucose analyzers, microscope, etc.)
Magazines for patients
Medical records software
Medical wall decorations
Medications
Needles syringes
Otoscope, stethoscope, tongue depressors, alcohol wipes,
Phone
Physical security systems like cameras
Procedure tables
Protective equipment (gloves, aprons, eyewear, facemasks)
Sanitizing equipment
Sharps containers
Sigmoidoscope
Software programs for dictation
Software programs for coding and billing
Software programs to track inventory
Specialized equipment (spirometer, fetal monitoring, etc.)
Specialized lighting
Stainless steel equipment
Step stools
Suturing kit
Televisions
Uniforms
Wheelchairs, ambulatory devices like a cane

Conclusion

Opening a primary care clinic is a rewarding business for most physicians. There is a huge demand for primary care providers in every community, and the profession is recession-proof. While the startup costs are high, the financial rewards are also good. The practice will continue to thrive if one complies with the legal and other healthcare rules.