Issues unique to
starting an IMP right out of residency
Please see “Independent practice may not be viable in all markets”
Major failure modes in practice include:
Inability to attract patients
Inability to generate revenue
Inability to keep up with paperwork/billing/documentation
Attracting new patients
A new doc in town or fresh out of residency has no
name in the community, so your practice will build slowly unless you can get
some marketing. [link
to marketing page]
Generating revenue
If you bill insurance, you will avoid one of the things that limit new patients (people with health insurance hate having to pay extra or get involved in their own billing. See “You can take insurance and manage the billing beast.”) Be aware that to bill insurance you must be “credentialed” by each insurance company, and this can take months. You may not bill any patient work prior to being credentialed. This means that you could have months of no patients and no income.
So what is a fresh-out resident to do?
Some ideas that have worked for others:
Get a side job that will allow you to slowly build your own practice – moonlight in your old residency, in the hospital, work in urgent care or an ED.
I do not recommend taking a job in another practice for a while. Why put off the inevitable of setting up right? Why work in a dysfunctional practice and learn bad habits?
Independent practice
may not be viable in all markets in the
As in any start-up practice it is important to do your
homework first. We’ve discovered through
trial and error that there are microclimates across the
The factors going into the financial analysis:
Income needs
Cost of practice
Average reimbursement
You will need to gather a bunch of data and do some serious calculations to find out if it is even possible to pull this off. Once you have gathered the data, think about what your typical “visits per day” etc will be. Don’t be overly optimistic for patient volume, and think about doubling your typical costs (unless you’re really good at the micro thing). Once you have gathered the data below, get the excel spreadsheet rentaroommodel and plug in the numbers.
Income needs
You own this issue. It may be that you have to give up some of your income target to achieve a sustainable practice (sustainable as in enjoyable over time).
Cost of practice
This is the big overhead issue. IMPs succeed by cutting typical overhead down to extremely low levels. This is possible if you give up all preconceptions of what a medical practice looks like and how they operate. An example of a good survival technique – as you contemplate a nice physical space, think about how you can pull it off with only one quarter of the square feet you envisioned.
From: adam schwarz <adamschwrz@yahoo.com>
…honestly last night talking with some of the IMPs I was bothered by
something....it came at me slowly and then this morning was confirmed...my
business plan was wrong, to a little to lofty on both collections and to heavy
on overhead....the balance of which grounds the flight - for some re
tooling.
I'm committed to the IMP'ing, so clearly the kind of medicine I want to
practice...talking with the group and hearing some of their issues - a wide
variety of them, solidified the model as my own...now the trick is to retool
the business plan....I am humbly grateful I came and saw and heard.....and ran
through that preflight check list.
The caution was in my
business plan that assumed I could afford the HUGE space I am preparing to sign
on to....Gordon - in his failure mode warnings suggest ~<1200 square feet of
real estate...my space, though cheap is 2700 s f, and necessitates a subleaser...that element is the one that makes me
flinch....on the other hand I am quite hopeful all will fly on schedule.
Adam Schwarz MD
Please be very cautious about taking on debt, buying stuff, and especially hiring staff. When you just open a practice, why in the world would you want to may payroll from month one when you phone may not ring for hours at a time? Build staff when the patient flow demands, not before.
Be reluctant to take space that you have to fix up or “build out” into medical space. This typically comes at very high cost and will be like an anchor around your neck as you desperately try to stay afloat in the first year. One of the successful ways around this is to rent a room or two from an existing practice.
Once you’ve done all you can to pare down the tools, toys, space, etc, the big drivers of overhead are malpractice costs, typical rental cost per square foot. If you plan to work part time (usually defined as less than 20 hours per week), you might be eligible for a discount from your malpractice carrier.
Average reimbursement
You must do a lot of homework here as well. What insurers will you work with? What do they reimburse for 99213, 99214, 99202, 99203? You can often find this out by asking an office manager in a similar practice or by contacting the insurer directly.