Starting Your Own Practice? S.W.A.T.: Start With a Team, Save Headaches and Expense

We frequently assist clients with the startup of new businesses, primarily medical practices. We assist solo practitioners as well as groups. We strive to help our clients go through the startup process as painlessly as possible and, to that end, we recommend starting with a team of the right people to save headaches and expense.

Not everyone is meant to be a business owner. It requires a massive amount of work and entrepreneurial spirit. It also requires business sense, a general understanding of revenue cycle and the desire to manage the challenges of a day-to-day business which just happens to be providing medical services. Again, not for everyone. Most people want to be employed with a predictable paycheck and benefits.

But for those of our readers who wish to take the plunge into an independent practice, we strongly recommend that you have the right team of advisors ON THE FRONT END. Why? Because if you think that you know how to do everything you will be wrong, and it will cost you more to go back and correct mistakes. As an example, an accountant who understands the cash flow of a medical practice can save significant expense by explaining how the revenue cycle of a practice should work and how YOU can be paid. It is very common to find that without the right accounting advice, a business owner is left without being paid because he/she did not understand the revenue cycle and how to budget.

We are not suggesting you employ your advisors. We are, however, strongly suggesting that you have a relationship with them early on and use their services when needed to save yourself time and expense. Not all advisors are paid on an hourly basis. Some work on a contingency and you pay nothing unless a specific agreed-upon outcome is achieved on your behalf.

Following are some recommendations as to who team members should be if you are planning to start a practice:

• Attorney: One who concentrates in health care law and has experience with providers and medical practices. Will be needed to create a legal entity, review contracts, leases, etc.
• Accountant: Someone who understands revenue cycle, expenses and cash flow related to a medical practice. Can help predict your revenue and how you will be paid.
• Insurance Broker: Can canvass the market to obtain best quotes for your malpractice insurance and other coverage. You will not be charged a fee because if an insurance purchase is made on your behalf, the insurance company pays the broker a commission. This is a huge time saver and will get you information you would not otherwise have. Also, the broker will know the lines of insurance that are applicable to your business other than malpractice insurance.
• Biller: One who has experience with billing payors for medical practices. Usually paid a percentage of collections. Frequently billers can also help with completing payer credentialing applications.
• Strategic Planner: A person who has experience in the healthcare industry who can help you visualize your practice and create a “roadmap” for you to follow to develop the business over the first few years.
• Business Plan: If you are looking for a loan to finance your startup practice, the bank will likely want to see your business plan. If you have a strategic planner, he/she can usually help create this.
• Banker: If you are looking for a loan to finance your start-up practice you will need a bank to provide financing. Some banks will finance without taking a loan on your home and use your accounts receivable as collateral.
• Certified Financial Planner: Presuming you are successful and making a profit, you may want to speak with a professional about how to invest your profit. You may say, “I will do that in the future because I do not have any money now.” Now is the best time to talk with the planner while you do not have the money to invest so that you can be informed and can plan for the future.
• Asset Protection Attorney: An attorney who concentrates on estate planning and asset protection (they are not the same). Once you have built your successful practice (or even before) you may wonder whether a plaintiff’s attorney can take your house in a malpractice verdict or settlement. The way to protect your house is through asset protection planning.

We are here to help and can recommend professionals in the above categories. Full disclosure: Our recommendations are based on our positive experiences, client feedback and not on any financial interests.

For further information contact us.