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Posted: 12/17/2012 1:33:38 PM EDT
My dad and one of his friends are tossing around the idea of starting a small doctors office. I think a starting point will be to come up with a rough budget and business plan. I can come up with salaries, utilities, rent, and the other stuff from a normal business. What I don't know is the doctors office expenses. Equipment, software, getting setup with insurance companies and medicare/medicaid. 2 Questions to start with...

1) Any advice on where I should start looking?
2) Any experience starting a doctors office?
Link Posted: 12/22/2012 4:41:28 PM EDT
Is anyone involved a doctor or LIP? Are they people who thought, "Doctors are rich, so let's start a doc in the box place." I wouldn't do it. You'll need at least two LIPs if you're going to have useful hours (i.e., want to be open more than 40 hours per week), and if one leaves, you're SOL because the other isn't going to work to cover all that time. How much do you plan on paying a board certified internist or family care doc for 40 hours per week? Will that be W2 or 1099? What about benefits? Malpractice?
Link Posted: 12/23/2012 8:59:52 PM EDT
You probably need to get some of the data from MGMA (Medical Group Management Association). They have all sorts of studies and papers on average physician salaries by specialty, geographic location, practice type, etc. Most urgent cares are staffed by family physicians. Pediatricians or Internists can do it too, but may struggle in urgent care, since all ages come to urgent care. Just yesterday, I saw a 36 day old infant, and an 87 year old man with severe hypertension. I also saw about 35 other patients.

Have you done a market survey? How many physicians are available in your catchment area? How many urgent cares or primary care offices are in your area? Are you going to do chronic disease management, or just urgent care?

MGMA can probably give you some malpractice insurance data. Are your docs gonna be employees or contractors on a 1099?

Have you talked with a few doctors in the area? Do you have a feel for health insurance penetration in the area? A lot of physicians are really struggling to keep their clinics afloat, especially with the incoming onslaught on patients who will be on Medicaid once ObamaCare is fully enacted.

As a small clinic, you will have ZERO negotiating power with any of the local or regional insurance companies. Let me repeat that. ZERO. They will offer you a shit fee schedule, with payment about 50-60% of the allowed Medicare payment. Medicare doesn't negotiate fees at all. Neither does Medicaid, although some of the managed Medicare and Medicaid companies have different fee schedules. They all suck. You lose money on Medicaid, break even on Medicare, and make money on commercial insurance, IF you have a good contract with them.

You'll need an electronic medical record, and the ability to submit claims and receive payments electronically. There are startup and maintenance costs associated with EMRs, but they're not too bad for a small clinic.

How many medications are you going to stock? Injectable meds can get expensive. If you stock controlled substances, there are significant layers of bureaucracy associated with them, and your theft risk goes up dramatically. If you keep Demerol and Valium injectables in the clinic, you will get robbed. Just keep Toradol and Phenergan shots. They're cheap, and no druggies will break in for them.

If I were opening a standalone clinic, I'd run a light crew, with one receptionist, and one nurse or MA, and one physician. Hire two docs. Each can do three 12 hours shifts per week. That covers Mon-Sat. Do you want to be open Sunday?

Do not contract with Medicare or Medicaid at all. Have a set charge for an acute care visit (ear infection, strep, migraine, flu). You might consider posting your fees for sutures, X-rays (if you're gonna do them), injections of medications, etc. If there aren't many urgent care clinics around, you might be able to get some decent contracts with some of the commercial insurance plans. Tout your clinic's availability for routine and urgent matters, and the opportunity to keep their subscribers out of the ER. However, if you do cash-only, you will significantly lower your business overhead expenses.

Just realize that patients will bitch and moan that they have to pay to be seen. After all, "I've got my Medicaid and you have to see me!" Make sure patients pay the charge BEFORE they are brought back to be seen. You'll never have any luck collecting after the fact.

Finally, a couple of thoughts of salaries/wages. I get several brochures or flyers in the mail every week, advertising available Family Medicine positions all over the country. Most are $200-250K/year, and some have production bonuses or incentives that go even higher. If you pay the docs as 1099 contractors, plan on $125/hr or higher and you pay the malpractice premium.

So, does that help a bit?
Link Posted: 12/28/2012 5:08:22 AM EDT
Thanks for the replies. The MGMA is the starting point I was looking for. I'm not sure how serious we are at this point, we are just in the brain farting stage right now.

Once again, thanks for the direction.
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