Book Recommendations for Starting Private Practice

[Kevinhen16]

I'm currently in first year of residency and intend on starting a cash-only/fee-for-service private practice after graduating. I was wondering if anyone had any particular recommendations on reading material for starting a private practice. I've already read The Medical Entrepreneur, Suddenly Solo Enhanced, and The Doctors Guide to Starting Your Practice Right. These resources were not without valuable information; however, I was hoping for something more detailed.

Thoughts? Thanks!

[jfoxcpacfp]

Kevinhen16 wrote:

I’m currently in first year of residency and intend on starting a cash-only/fee-for-service private practice after graduating. I was wondering if anyone had any particular recommendations on reading material for starting a private practice. I’ve already read The Medical Entrepreneur, Suddenly Solo Enhanced, and The Doctors Guide to Starting Your Practice Right. These resources were not without valuable information; however, I was hoping for something more detailed.

Thoughts? Thanks!

Click to expand...

You've already read my recommendation (SSE) but the best way to learn what not to do (other than making the mistakes yourself via the school of hard knocks) will be to work for such a practice for a year or 2 and absorb everything you can. I'm sure you're really anxious to get started, as would be anyone, but there are so many things that you can't learn from a book...

Possible to do any moonlighting in such a practice while you're in training? As an IC or p.t. employee, shouldn't have to sign a NCO. And it wouldn't matter, anyway, if you're not planning to practice in the vicinity of 30 - 50 mile radius.

Of course, I'm a business consultant, not a doctor, so take that with a grain of salt.

[LBKCLU]

What is your medical specialty?

[Kevinhen16]

Thanks for the responses. I do have a few attendings that have done the same at my program, so I'll certainly be picking their brains over time.

My specialty is Neuromuscular medicine/OMM. We're few and far between, which makes finding similar practices to rotate through a challenge, unfortunately.

[Docbeans]

I do not have a book recommendation- haven't read any in this subject- but I can understand why these books seemed not to delve deep. Its probably because it's very very varied from one practice to another depending on a number of factors: specialty, size of grp, geographic location, practice philosophy, relationship w local hospitals etc. Without taking these differences into account, there are a few basics, which I think is information you will find easily. And accounting for these differences will be too much to put into a book.  And the devil is in these details.

However, I suspect someone with financial awareness enough to be on the forum of WCI and posting about it will do well enough from the business aspect of running a practice. Most physician practices that run into trouble do not belong to this kind of physician. They may not have time/interest to look into the day-to-day handling of money and may get swindled; or they may not be savvy enough to rein in costs/run a lean machine because... it didnt occur to them?! Or because local politics/economics involving other practices and hospitals drive things up and down and there's only some much one can control...

Focus on learning all the medicine you can now in training- take an initiative to learn about billing, coding, etc, and remember the 3 A's of pvt practice: Affability, Availability and Ability (in that order!). I commend you on thinking about this so early on and wish you good luck!

[Hatton]

I also see a lot of practices struggle because they pay too much rent in hospital owned buildings.  Overhead is very important.  If your overhead is too high you either work yourself to death or make no money.  Rent and payroll costs are important considerations

[Kamban]

My thoughts are

1. You need to know your competition. Who are you competing with and how will you attract patients. Can you retain patients.

2. You say cash only - what will happen when the clients have insurance and already are overloaded with deductibles, copays and coninsurances. They will balk at paying additional cash, especially in a recession. How are you going to address it?

3. You need a detailed budget. The big ones are rent / mortgage and payroll, but a lot of small things add up - telephones, internet, utilities, office products, various insurances, licenses and professional fees, computers, copiers etc etc. You need a detailed breakdown of costs. Try and get that from people who are running a practice.

4. For the frst few months or even years you might find your expenses being more than collections as you build your practice. How are you going to survive that. Line of credit? Can you go without salary for some time ? Do you have a spouse who is employed and has medical benefits so that you can afford to be more adventurous.

It always costs more than you think and the collections are not as rosy as you dream.

As Johanna suggested, I concur that you have to do a apprenticeship for a couple of years before you jump in, however difficult it might be. Residency does not prepare you for the business of medicine, which is what you need in order to put food on the table.  Otherwise you can fail miserably and rack up a huge debt.

[WealthyDoc]

It may be a little dated now but it may still be worth a look: Julie Silver's Business of Medicine.  She is a physiatrist.

https://www.amazon.com/Business-Medicine-1e-Julie-Silver/dp/1560532548

[Docbeans]

hatton1 wrote:

I also see a lot of practices struggle because they pay too much rent in hospital owned buildings.  Overhead is very important.  If your overhead is too high you either work yourself to death or make no money.  Rent and payroll costs are important considerations

Click to expand...

Very true! Overhead is everything. Just like with a personal budget, in the practice too fixed expenses should be kept down as much as possible so that you can still take home a paycheck in the lean months.

With reimbursement changes, there are likely to be changes in smaller practices acquiring expensive diagnostic tools- nuclear machines et al- crunch the numbers to see how long it will take you to break even and turn a profit. It may not be worth it any more. That said, it is extremely hard to predict changes in the long run... reimbursements could go up, down or sideways.

[YSH]

Not to hijack this topic, but along the lines of running any for- profit entity, what percentage of overhead would be consider too much? What do you consider as the ideal percentage for various types of practices?  Should it differ based on specialty?

[Kamban]

YSH wrote:

Not to hijack this topic, but along the lines of running any for- profit entity, what percentage of overhead would be consider too much? What do you consider as the ideal percentage for various types of practices?  Should it differ based on specialty?

Click to expand...

As you have said, it is based on specialty. A psychiatrist with no procedures will have low percentage overhead vs a FP doing some office based procedures that requires supplies and injections. An oncologist might have 85 % overhead ( $2.5 M out of $3M ) when $2 million is just used in purchasing drugs to be infused, which hardly generates any revenue. Oncology drugs prices have shot through the roof. :evil: