Private Practice Next Steps: Office Location, Medical Equipment & Staff

(The first article in this series covered the steps to get financing for a new private practice. This article outlines the steps to take once you have the money to move forward.)

Starting a medical practice is a major career decision. It will change the course of your life, including your finances. Setting up a small business takes more than money. This piece outlines the steps to find a location, source equipment and hire a staff.

A recent Medscape study reports self-employed physicians make more money than salaried doctors. On average it takes most doctors nine months to get a private practice set up and open. We think that’s a bit optimistic. Our suggestion is to plan for 12-18 months. When you build a budget, it’s standard practice to add in a buffer for unexpected events. Do the same with your timeline.

Opening your practice is an exercise in entrepreneurship. Treating patients doesn’t happen until you get the business open. It’s time to put your CEO hat on. If you’re not sure you’re ready for that, you may need to get some outside expertise.

It’s an ongoing issue for doctors – do we do this ourselves or should we hire a consultant? Here’s are the points to consider when making that decision:

  • How much time do you have to handle the process?
  • How comfortable are you with making decisions outside of the exam room?
  • How much do you know about starting a business?

Once you answer those questions, you should be able to make the call. A hybrid model might also be effective. Hire an expert to review your choices before you finalize them. This model allows you to stay in control of the process but still benefit from an advisor.

The first step in the process is to put together a roadmap.

Creating a Roadmap

The business plan you put together to secure financing is a good place to start. A roadmap is a visualization of the milestones between your starting point and your goal. It would begin with the financing process you’ve already completed.

A roadmap is more of a timeline or a mini-project plan. It represents the tasks that need to be completed and their deadlines. It helps you to understand the reliance between tasks. The roadmap sets checkpoints at critical junctures.

For example, if you’re doing remodeling that requires a permit, a lot depends on meeting those dates. But they are notoriously unreliable, so you should set a checkpoint to stay on top of the progress. You don’t need your furniture stacked up in the hallway because the floors aren’t finished.

Start by creating a high-level task list: Location, Equipment, and Staffing. Add a few sub-tasks beneath each. Don’t get too complicated or the map gets hard to follow. Set a time frame for completing each high-level task and add checkpoints to keep the project on track. The sooner you see a task segment is falling behind, the earlier you can adjust.

If you use Microsoft Office, you can download free project templates here.

Find The Perfect Private Practice Location

We’re going to assume the practice will be renting space, but these steps apply if you’re buying. Start by researching areas zoned for commercial real estate. We’d recommend you do some poking around before involving a realtor. When you have a better feel for where you want to look, you can bring in an agent.

Here are some tips for the location hunt:

  • Consider your commute. A location that has you stuck in traffic every day is not optimal.
  • What’s the outside area like? It needs to be safe, well-lit, and have plenty of parking.
  • Explore the surrounding area. Are there pharmacies nearby for patients to pick up prescriptions?
  • An excellent place for a new practice is in office parks that cater to medical practices. Being surrounded by other doctors gives your brand-new office subconscious credibility. Check different locations to find areas with a gap in certain practitioners. For example, how many pediatricians or urologists?

With a little research and a search engine, you can answer all these questions on your own. When you start looking at properties, it will save both you and the real estate agent time.

How to estimate price?

The average cost of office space is between $8 – $23 per square foot. In larger cities, like New York, Miami, or San Diego – you’ll pay a lot more. Do a search for medical office space in the city where you’ll be renting.

Space in the Resurgens Henry County Medical Center in McDonough, GA goes for $17.30 per square foot. McDonough is 25 miles from Atlanta. In San Francisco, medical office space in the Union Street Plaza goes from $61 t0 $68 per square foot. The lowest rate we found was $30 in an older building and around $45-49 for other locations.

How much space?

Here are the logistics you need to contemplate:

  • 2 exam rooms (minimum)
  • Waiting area to comfortably hold 8 patients and a reception desk
  • Restroom for patients (must serve disabled clients.)
  • Office for staff (3)
  • Office space for doctors (2)

These are generic requirements. A pediatrician might want to add a play area. An orthopedist may need a room for X-rays. The best way to estimate how much space you need is to ask a practicing doctor. Call one of your colleagues, preferably with the same specialty. Ask about the size of the office. Do they have too little or too much space? You don’t have to ask about price – only the square footage.

Start viewing properties

By this time, you should have a good estimate of neighborhood, cost, and space requirements. When you meet with your realtor, run your research by him or her. Adjust your plan as needed based on their market knowledge.  But hold true to your financial parameters. The quickest way to fail in business is to start with a lease that’s more than you can afford to pay. For the first nine months the office is open, you’re not going to see much income. Much less a salary.

You may want to look at spaces that have already been used for a medical practice. You won’t have to do much renovation or construction. The thing to find out is why the previous tenants left the space. If they grew out of the location that’s one thing. But if there were problems with the space, you need to know.

See what services and amenities the building offers. You’ll be receiving a lot of deliveries and doing staff interviews. See if there are limitations on when and how. Also, how does building security work?

Take your time. Look around. This pick is the foundation for your financial future.

Get Equipment

treatment room for private practice

The equipment for a private practice doesn’t come cheap. There are two types of equipment you need for your practice:

  • Medical equipment for diagnosis, exams and treatment
  • Office equipment for record-keeping, accounting, billing, and office communications

You have the option to own or lease or to buy new and used equipment. Leasing furniture for offices and waiting rooms can practical, depending on the terms. Buy used equipment from vendors like DotMed or new from companies like Venture Medical.

Medical Equipment

  • Exam tables and procedure chairs
  • Scales
  • Autoclaves /Sterilizers
  • Emergency equipment: Automated external defibrillator, carts, aspirators, resuscitation equipment
  • Basic diagnostic: thermometer, audiometer, blood pressure monitor, stethoscopes, otoscopes, pulse oximeter, etc.
  • Gynecological instruments
  • Specialized equipment (spirometer, fetal monitoring, ultrasound, etc.)
  • ECG/ EKG units
  • Anesthesia and oxygen
  • Eye charts
  • Sharps containers

This is a very basic list. Depending on your practice, you may need equipment specific to your specialty. Supplies like PPE, gloves, disinfectants, syringes and scalpels aren’t included.

Office Equipment

This includes the waiting area and back-office setup. The waiting room and reception desk are the first impression clients have of your office. For a new practice, this is important.

  • Chairs and end tables
  • Artwork
  • Reception desk
  • Credit card swipers
  • Phones
  • Tablets
  • Office desks, chairs, and cabinets
  • Computers
  • Printers
  • Fax Machine

Also, you’ll need general supplies, like paper, name tags, and postage. If you have a break room, you’ll need a microwave, a table and a refrigerator if one isn’t included.

Supplemental Services

The phone service network will need to be set up. Secure Wi-Fi and placement of routers. Have a professional cleaning service clean and disinfect the space before opening. You will need IT support. We’d also recommend you find a CPA for tax purposes.

Hiring Staff

It’s a competitive market these days for experienced healthcare professionals. Not just doctors, but nurse practitioners and physician assistants (PA) too. Proper office management, billing, and experience with insurance providers can make or break a new private practice.

Start by making a list:

  • Nurses
  • Front Desk reception
  • Office manager
  • Billing specialist
  • Data Entry staffer

If you are a solo practitioner, add a nurse practitioner or PA to better serve patients. Think about how many nurses you need to triage patients. Also, make sure you have enough staff to handle the phone traffic. Think about your clientele – do you need a phlebotomist? A surgical nurse?

Here’s a great article on how to hire the best medical office staff.

Salary and Benefits

The money and benefits you offer have to be within market value. You can search on Salary.com or Indeed.com to see what staff are getting paid in your area. When computing your staff costs, don’t forget to include payroll taxes and benefits. Benefits can be a challenge for small businesses.

While you may not be required to provide healthcare, can you attract employees without it? You can offer a SEP IRA, which allows your staff to have a retirement plan. What about paid time off? Take a look at these employee benefit resources. Get your package on paper before you interview anyone.

Soft Skills

Every doctor is concerned with quality of care. More should be concerned with customer experience. Healthcare is becoming patient-centric. As consumers of services, patients are demanding a better quality of service. When you’re starting your practice, your office staff affects patient perception.

Soft skills for customer-facing staff include patience and a positive, helpful approach. A calm demeanor, problem solving skills and ablility multi-task (with a smile.) Think of the last time you stood at a counter with no acknowledgement from the employee behind it. Customer-facing employees need to look up – even if it’s just to ask a patient for another minute.

Security Check

Everyone should undergo a thorough background check. Do not skimp on cost – anyone with access to patient records should be included. Medical records and patient data bring a high price on the black market.  Data breaches in healthcare are on the rise. Do not put your practice at risk because of fraudulent employees.

Interview and Hire

Before you start recruiting, write out job descriptions for every position. Include any certifications, degrees, and years of experience you’re looking for. It will help you go through the responses you get and weed out ineligible candidates.

The most interesting information comes from situational responses:

  1. Tell me about a stressful situation you faced at work and how you handled it?
  2.  How do you handle working on your own? Tell me about the pros and cons.
  3.  Give me an example of a time you made a mistake at work and what you did about it?
  4. Have you ever had someone violate your privacy? What happened?
  5. Can you tell us about a time when constructive criticism helped you do a better job?

These types of questions offer more insights about a person than a resume. You need to check the references from past jobs – no exceptions. If the person is going to work remotely, make sure they have a private home office. If they are coming into work, discuss the length of the commute.

We respect candidates who ask questions about the job and the business. It shows they want to find a good fit, not just a decent paycheck. A person who is qualified for the job and a good fit with the rest of your team is the best hire you can make.

What About Software?

Medical software and systems need to be a standalone section. There’s too much information to cover. Software, systems and platforms will be the 3rd article in this series.

Setting Up Your Medical Practice

These are the next steps once you have the financing to set up your practice. Location, equipment, people – you’re getting closer to opening your doors.

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