Medical Business: The Price Of Investment In Private Practice

Starting a private medical practice is no different than starting any other business. Finding a source of funding, setting up the right legal structure for the business, and working with a team of consultants who are familiar with the specific business needs of a medical practice are just some of the things a physician must deal with when setting up a business. Having a private medical practice comes with many obstacles, but with proper planning and flexibility, a physician can have a professionally and financially rewarding business venture.

 

Start-Up Costs

A physician can expect to pay well over $100,000 in start-up cost for a private medical practice. They need to consider renting or buying office space, designing the office, and furnishing the office. Computers, medical records software, office furniture, and medical supplies will need to be purchased. Furnishing an exam room with an exam table, cabinets, glove box holder, padded side chair, a stool, glove box holder, and a waste receptacle can cost up to $2,500. If the doctor plans to offer any sort of specialized procedures, you can add in the cost of surgical chairs and equipment. Consulting with professionals such as small business and health care attorneys, accountants, and medical practice consultants are some of the people a physician will need to hire to help start the medical practice the right way.

Some additional costs a physician will need to take into consideration include sales and marketing materials such as flyers, postcards, radio ads, and TV commercials. These are necessary to help grow the business. Finally, it is vital for the physician to have a website, Facebook page, and Twitter account so that they have an online presence. There are many other things a physician must pay for, so it is helpful for a physician to seek a small business loan.

 

Funding

Getting a small business loan can help get a start-up medical practice up and running. A physician should think about how much money they will need to get started to avoid overspending and having a debt burden that is too much to handle. Banks are one source of small business financing, but it is difficult to get a loan from a bank when a business is in the start-up phase. The Small Business Administration is a good place for a physician to go to look for financing sources. There are local SBA offices around the country, and they can help with finding alternative sources of financing.

 

Legal Structure

Setting up a legal structure for the medical practice is important because this determines how the physician will pay taxes and avoid personal liability in lawsuits. Private medical practices are typically set up as S-corporations where the physician only pays taxes on the personal income from their business. The physician should consult with their small business attorney to determine the best business structure for the medical practice.

 

Credentialing

Credentialing is probably the single most important part of setting up a private medical practice. Most people are unable to pay for medical care out-of-pocket and use insurance to cover the cost. Credentialing is the process that a physician in private practice must go through to accept government or private insurance. The physician also must be licensed by their state medical board to do business, receive a national provider identifier number, register with the Drug Enforcement Administration if they want to prescribe medication, and receive separate registrations for an in-office lab and to use x-ray equipment.

 

Starting a private medical practice has its challenges, but being one’s own boss of a respected and trusted business with unlimited income potential has its attractions. There are many possibilities for a physician to find success with a private medical practice. Having a good business plan and a reliable team of advisors is helpful for a successful start in the business.