Doctors perform an extremely important service for patients, providing care and treatment that helps keep people healthy and that makes it possible to fight off illness and disease. To be able to do their jobs well, doctors need to have the tools and know-how to make their medical practice a success. Here are some tips on how to run a successful medical practice.
Tips for Running a Successful Medical Practice
Doctors of all specialties and fields can benefit from making smart business and financial choices. Here are some tips for running a successful practice:
- Make sure your organization is structural correctly and is the appropriate business type.
Medical doctors could operate as sole proprietors or could operate as partnerships, limited liability companies, or corporations. There are different advantages and disadvantages for each of the options. If you run the medical practice as a sole proprietorship, this is the simplest structure but you are personally at risk for liability and for business financial issues. Partnerships also leave all partners personally at risk.
Forming a corporation can not only protect doctors from personal liability but it can also have some tax advantages too. An S-corp allows for pass-through taxation, which means that the individual doctors who are owners of the corporation will be taxed on their personal returns for profits and can deduct losses on their personal returns. Some income can be paid from the practice as distributions, resulting in tax savings. A c-corporation can allow for more deductions and other tax benefits, but can result in double taxation if doctors aren’t careful. It is advisable to talk to an accountant and a lawyer to determine the appropriate business structure.
- Keep careful records for patients
A major part of running a successful medical practice is to make sure that you keep careful and detailed medical records for the patients that you are providing treatments for. These records may be requested by insurance companies who will need to see that you provided the promised services in order for you to get paid. They will also help you to track patient health over time.
Today, many doctors are switching over to Electronic Health Records (EHR). There are incentives from both Medicare and Medicaid to switch to electronic records and these incentives can be worth thousands of dollars. There are free EHR programs that qualify for electronic health records incentives that you can consider making use of.
- Accept insurance payments smartly
Many doctors find that they can attract a lot of new patients by becoming a part of an insurance network. While you can get many new patients through doing this and becoming listed as a provider, you need to make sure that the reimbursement rates are reasonable for in-network physicians. Most doctors do participate with at least some insurance companies since few patients actually want to pay out-of-pocket for their health care costs. However, you don’t have to participate with every insurer and you should research carefully which insurers have a history of paying doctors on time and without a lot of hassle.
- Try creative tactics to find new patients
Many doctors who are starting a practice for the first time will not have a big base of clients who come to see them. It is important that you get your name out there in the community so that you can find people who come to your office and get care. Some doctors will attend health and wellness fairs or will give lectures on health subjects to senior and community groups in order to attract patients who may be interested in getting care.
- Make sure you are properly insured
The first thing you need to do when you first open up your practice is to get medical malpractice insurance. Medical malpractice insurance is absolutely essential. Otherwise one accusation from a patient could end up bankrupting your practices. People sue for all kinds of different things, from misdiagnosis to delayed diagnosis to botched treatment, and sometimes people sue even when you’ve done everything right because they are unhappy with an outcome or because they simply believe that you didn’t do what you promised (even if you did). Legal bills alone can cost tens of thousands of dollars for a malpractice case and if you are found liable, you could be on the hook for a damage payout that would likely bankrupt your practice.
Have questions about running a successful practice? Ask in the comments!
Jim McKibby is a self proclaimed small business master. He has an uncanny knack for turning small businesses into money making machines. When he’s not giving business advice, you can find him enjoying a Houston Rockets game.