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Article of the week: Tips for starting a private practice

Rehab Regs, March 14, 2008

Therapists looking to break out on their own have many things to consider before starting their own practice. The most important aspect to look at is whether such a move is worth it.

"The benefit to running your own practice is that you are your own boss," says Bubba Klosterman, OT, CVE, CEAS, CEO of Work & Rehab in Abilene, TX. "You're in control of your situation and don't have to put up with a lot of the politics, but on the downside, you're all alone, will have to worry about issues you've never dealt with, and are taking on a lot of risk."

After you've decided it's worth it to work the extra hours on taxes, billing systems, insurance plans, and other areas that don't involve patient care, here's a list of 10 essential lessons Klosterman learned while starting up two practices of his own:

1. Become educated. Know the market you're entering, the discounts you have to take from Medicare and Medicaid, and the networks to join to get your name out there.

"There are a lot of different variables you need to consider before you jump right in," Klosterman says. "You have to be versed in the legislative component and be able to access new information regarding worker's compensation, state regulations, and ever-changing fees."

Conduct as much research about the business end as possible and expect to work long hours balancing patients, finances, and research until you're well-established.

2. Find a niche. The list of niches is never-ending, from hand specialists, to cardiac rehab, to listening therapy, but it's much easier to thrive if you have a niche of your own.

"You don't want to rely solely on referrals, so find out what services are not being met," Klosterman says. "A generic private practice is almost impossible to start now because there's so much competition."

"Looking into employer services is a good place to start, whether it's drug screens, injury management, or ergonomics," he adds.

3. Hire a good accountant and attorney. Most likely, you spent your years in school learning therapy practice, not tax and law issues. Although you still need to be versed in those areas, have experts to do the intensive labor.

Hire consultants to set up bylaws and corporate records, says Klosterman. These consultants, whether lawyers or financial advisors, should be familiar with medical practices and the vast array of regulations. Also develop trust with your consultants so you know they'll be there when new issues arise down the line.

When you're starting out, franchise taxes can be a burden, and you will need to know the details of other legal fees. Find out which consultants medical practices in your area use so you hire someone you can count on to inform you of these assorted fees.

4. Do your research about insurance. This is another area where consultants can help you out, but in the end, you'll have to make most of the decisions about insuring your facility, yourself, and your employees.

If you're used to having your employer foot most of the insurance bill, you could be in for a shock when you suddenly have to shell out thousands of dollars for employee benefits and malpractice insurance.

5. Devise a marketing plan. You're going to be the new guy in town, which means you have to find patients and employees. Figuring out a budget for advertising will go a long way in determining how you advertise.

Smaller practices typically can't spend as much money on advertising as larger, more established ones, but focusing on a specific group to recruit will help any practice find the correct medium for its goals, Klosterman says.

"TV and radio will reach a lot of people, but they're expensive and aren't very targeted. Sending out letters to physicians and employers will focus your campaign, while direct mail to local residents will let them know who you are," he says.

Market your practice to find employees (e.g., other therapists, a receptionist, or assistants). Because you're opening a new facility, focus employment ads on growing and starting in on a new venture.

6. Start small. Unless you have so much money that failure won't bother you, limit your risks as much as possible. Before you hire 15 therapists, for example make sure you'll be able to attract a corresponding number of clients.

You might think that having all state-of-the-art equipment would be nice, but if you don't have anyone to use it on or any employees to operate it, you might just be throwing money away.

Be cautious hiring and buying early on by learning ways to be efficient with limited staff. Software exists to help with billing and scheduling. By keeping records and billing electronically, you can cut down on a lot of extra paperwork and filing.

7. Find a good location. This doesn't mean it has to be in downtown New York, but put your facility in a visible, central location where your clients will be, whether it's in a strip mall or an office building complex, and in an area of need.

"If you know that you'll have certain specialists referring to you a lot, you may want to be close to them," says Klosterman. "But what I've found is that ease of access and parking space can be just as crucial. If it's a pain to find you or get to you, it's less likely a patient will return to you."

Research the market before deciding on your locale to make sure there aren't 10 other therapists in the same area or that the area can support your practice financially.

Also consider leasing a building instead of buying. Office space doesn't always have the same resale value as housing, and by leasing, you have the opportunity to move if your needs or clients' locations change.

8. Consider a partnership. Whether it's with a hospital, another therapist, or a physician's office, it's possible to share expertise for the common good. "[A partnership] can help reduce some of the risk, but if you don't weigh everyone's goals, it can also cause more problems," Klosterman says.

Hospital partnerships can help you form a client base, but the hospital might also want things done its way, and then you're back to not having full control.

9. Focus on customer service. In the end, the difference between a successful private practice and a failing one is how it treats its patients. Even in suburban and rural areas, patients can choose to go elsewhere. By treating patients properly, you can create loyal patients who can be your best advertising through word of mouth.

"Work hard to get good outcomes and get people in and out quickly," says Klosterman. "Try to stay on schedule with your appointments, but take the time to know your patients. The most important goal is to get good results, but if you can do that by treating people with respect, you're much more likely to be successful."

For more on this article go to http://www.hcmarketplace.com/prod-61.html