Everything you need to know to establish, and run, a thriving medical practice. Follow this guide to set up a competitive and sustainable setting that meets the demands of your future patients.
Content in this guide
Doctors graduating from medical school would typically open their own practice in the past. However, young physicians graduating today are more likely to work for a large healthcare service provider or hospital. The American Medical Association (AMA) reports that 17% of medical practitioners now have a solo practice, which is significantly down from 40% in the 1980’s.
The business acumen that’s required to run a solo practice is deterring most doctors from starting their own practice. However, millennial graduates are making a move towards smaller private businesses; businesses with a more personal touch when it comes to both commerce and medicine.
Related: Starting a construction business
If you’re interested in establishing your own medical practice, here’s what you need to know before you get started:
Pros and Cons of starting your own practice
Going into business for yourself is a significant step and you’ll need to weigh the advantages and disadvantages before investing time and capital. Here are some pros and cons of opening your own private practice:
Many doctors choose the path of private practice because they feel limited by where they are working or what they currently do. If you’re looking to experience, and do, more as a physician then this is a step in the right direction.
2. Jack of all trades
Being the head of your own practice means you can fulfil numerous positions and see where your other talents lie. You’ll start off having to do everything, until you can afford to employ professionals in specific positions, and you’ll have an active role in everything from marketing to HR to IT.
Even if you aren’t fantastic at all of these positions at least you’ll learn a lot and know what it is your staff should be doing when growth time comes around.
3. Lead from the front
An overarching advantage of being in charge of your own practice is you’re the head of the practice. You’ll be able to manage your business in your own style and enjoy more creative freedom. Many larger institutions have many restrictions and constrictive policies, which you don’t have to entrench in your business.
4. That personal touch
Going private offers the advantage of being more intimate with your patients, allowing you to develop long-term relationships with them. This will allow you to accumulate vital knowledge about your patients’ and help you to diagnose them faster, in the long term.
5. Quick reflexes
Being in charge of your own practice can be very demanding but, with a small scale operation, you can strategise and course-correct faster. Larger institutions have legal hoops and systems of process implementation, which can serve as obstacles in the event of having to change strategy quickly.
1. Climbing that corporate ladder
A disadvantage of running a private medical practice is that you will no longer have access to the immediate, internal career structure a larger medical organisation has.
2. Fluctuating finances
Another disadvantage of running your own private medical practice is the unstable finances. This occurs whenever you purchase new equipment or hire a new person in a position that doesn’t bring in revenue. As a result, you will experience a large slump in your finances. Combine this with any loan repayments and slow business, and you could have a stressful cash flow situation on your hands.
3. The fish rots from the head
Although having your own business and being in charge is an advantage it can also be a drawback. You will have to liaise with stakeholders, market your practice and deal with all the complex tax implications. Every major decision falls on your shoulders and, if you slip-up, it could mean the end of your private medical practice.
4. Are you right for the job?
When you first start out, until you can afford to hire more staff, you might have to sit up all night working on finances and marketing strategies. Additionally, you’ll have to be up early listening to that patient who likes to complain about everything, or that hypochondriac who knows they have something and will make you look for it.
Being a doctor in itself is challenging, running your own practice is even more challenging. You’ll need to keep your determination level high and have a keen business sense to make your practice a success.
5. Staggered salary
When starting your own private medical practice you need to be aware that your salary will depend on what profit is left over after everything is paid for. You’ll be leaving a stable income environment and entering a fluctuating income environment. Your personal finances may take a knock no matter how well you’ve prepared and saved for this move.
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Registrations and legislation
There are many pieces of legislation that medical professionals have to adhere to, most of which you have already come across or have already been complying with in your previous position as a physician at a larger business.
Here are two of the main items you’ll need to register and apply for if you want to become a private medical professional:
Health Professions Council of South Africa (HPCSA)
There are several requirements you’ll need to meet to qualify for membership to the HPCSA, such as:
- You will need to provide proof of at least two years post-registration experience in the category that you’re registering in.
- Send in all relevant documentation including:
- The application form (Form 133)
- An original letter from your previous employer, confirming you have at least two years post-registration experience in medical technology in your particular field.
- The amount of R314.00 for a Certified Extract certificate for the register, which will enable you to register your practice and receive a practice number at the Board of Healthcare Funders of South Africa.
- Proof of payment of annual fee.
- Proof of compliance with the Continuing Professional Development programme.
For the HPCSA application form and more information click here.
Board of Healthcare Funders of South Africa
To expedite payments of accounts from Medial Schemes and the Road Accident Fund, you’ll need to obtain a PCNS number from the Board of Healthcare Funders of South Africa (BHFSA) as a practitioner, practice or agency.
The board will require you to pay a registration fee and complete its registration form. After you’ve completed this you will be given a practice number, which you’ll need to attach to all your communications.
For more information:
The BHF address is:
P O Box 2324, Parklands, 2121
Application for a practice number is available on the BHFSA website or contact its Client Services on 0861-302010 or e-mail: [email protected]
For the various application forms and requirements per application form click here.
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5 Traits of highly successful healthcare business leaders
Specific personality traits are important for working within the medical field, but are even more important indicators of who has a better chance of succeeding with a private medical practice. As an example, medical professionals tend to spend a large portion of their day with people; doctors who are extroverted will fare better than introverts.
Having a flexible personality is also a must, because medical professionals need to be able to adjust to rapidly changing situations.
If you fall within these categories of successful healthcare leaders, you will notice many of your own personality traits. If you’re aspiring to join this elite club, consider this as your checklist to achieving greater success for your future:
1. Business savvy
Successful healthcare leaders have learnt that the private practice of healthcare is more than just a calling; it’s a business and a serious one at that.
Many healthcare providers get little to no business education in their professional curriculum, which has left them to seek out the knowledge and information they need. These leaders are usually voracious readers.
These industry mavericks read books, articles and magazines on business strategy. They take businesses-related courses and constantly strive to learn more. Many of these leading healthcare providers learn more than is expected of them and then apply what they’ve learnt to create a more successful practice.
Your attitude needs to be progressive and proactive, to become a success.
2. Aim for the stars
Successful leaders have vision. They see beyond the business’ current situation and plan for the future they want. These healthcare leaders tend to have big goals and dream big, and are focused enough to achieve both.
Renaissance artist, Michelangelo said: “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”
3. Live on the sunny side of the street
All people are one of two groups, in terms of their view point on life; either they view life as a challenge or an opportunity. It’s interesting to note how life’s opportunities seem to find the ‘glass half full’ group and life’s obstacles find the ‘glass half empty’ crowd.
A positive attitude isn’t something you can fake to convince others. It is how you look at the world, and whether you focus on what is possible instead of what you think isn’t. A person with a negative attitude tends to find themselves as a victim who is not in control of their lives or what happens to them. People with positive attitudes tend to seize control of their lives and the situation they find themselves in.
Many people are born with a sunny disposition, while others have to retrain their brains. If you don’t have a positive attitude, the good news is, it is something you can cultivate.
4. The energy of the mind is the essence of life – Aristotle
Have you ever noticed the correlation between highly successful individuals and their seemingly endless supply of energy? They always seem to be on the go, moving, thinking faster than everyone else. This character trait is not coincidental, but a much needed requirement.
A leader’s energy is fuelled by exhilarating goals and desires, by passion, by a positive attitude as well as good physical and mental health. Lethargy and exhaustion are commonly associated with disappointment, depression, frustration, anxiety, anger, low self-esteem and the lack of meaningful, attainable goals.
Energy is a requirement for you to be a successful healthcare leader, but it should also be an inherent part of your makeup.
5. The colours of the mind
Personality is essential. Everyone isn’t blessed with a charismatic personality, but building a network and maintaining relationships are a critical component of building a successful healthcare business. If you’re more introverted or shy compared with your team, you’ll still need to push yourself to put yourself out there, to initiate, cultivate and support important relationships that can be beneficial to your business now or in the future.
Typically, people will refer to, connect with, and offer a lucrative deal to someone they like or trust. The more charismatic a person the more competent they seem and the more successful they appear.
Related: 10 businesses you can start part-time
What you need to pack on your journey
Although starting a private medical practice is considered one of the most challenging endeavours in the healthcare field, it is also seen as one of the most rewarding achievements for a medical professional.
The ability to directly influence your patients’ standard of care is often the coveted career choice for private sector doctors. On the other hand, you inherit numerous obstacles, hardships, costs and mistakes when starting up a private medical practice.
Those physicians, who plan well, secure appropriate funding and remain flexible to the fluctuating climate of the healthcare sector stand a better chance of accomplishing success in their business. Here is an overview of the common concerns and factors associated with becoming an entrepreneurial physician:
The cost of starting up
You’ll need to pay an initial fee to register as a small business. You’ll need to register your business like any other sector, and register your company’s name as well as obtain a practice number from the BHFSA.
Often start-up entrepreneurs make the mistake of trading from their personal bank account. This makes it harder to differentiate between your personal expenses and business expenses. It also doesn’t allow you to build up a credit risk profile for your business, which is an important factor should you ever want to approach a bank for financing. Rather, start trading as a business from the get-go by opening up a Business Current Account.
Have the law in your corner
All medical professionals and practices, without exception, including physiotherapists, homeopaths, nursing homes and elderly care facilities, need to have protection by means medical malpractice insurance. With mandatory insurance, medical professionals can protect themselves against claims and limit their exposure to costs and damage to reputation.
Here are the various types of legal protection healthcare professionals can apply for:
- Medical malpractice insurance: This legal option indemnifies you from bodily or mental injury, illness, disease or death of any of your patients or person caused or alleged by your malpractice.
- Products liability insurance: This indemnifies you against the injury and/or damages to any of your patients or third-parties arising from the nature or condition of any product.
- Public liability insurance: This covers you from bodily injury and/or damages as a result of, or allegedly caused by you. This cover also includes an extension for wrongful arrest.
- Professional indemnity insurance: This covers you for breaching professional duty, any breach of warranty of authority or of trust committed in good faith, defamation, infringement of copyright, and the destruction of, damage to, or loss of any documents entrusted.
The age old question: To rent or to buy?
The cost of renting or leasing a space varies from area to area and from metre to metre. Renting space for your new private medical practice is generally a multi-year financial commitment. According to Prodigy MD, the ideal size for a private practice facility is 400 to 500 square meters.
Keep in mind that you will need to convert the space into a doctor’s office. Renovations can be an unexpected cost you haven’t planned for. Do you have enough space to store the equipment you might need? You’ll also need to fill the office space with furniture, appliances and smaller pieces of equipment to make it useable as a business.
Can people find you?
Your marketing campaign needs to be comprehensive enough that people using multiple platforms can find your practice, but then again you don’t want to spend your entire budget on marketing. You’ll have to market to build up your patient roster, possible options are newspaper ads, flyers, postcard mailers, radio spots, TV commercials, and phone book ads, depending on how much you want to spend.
Phone book ads will give you a good return on investment because for the older generation this is still the first place they look if they need something. On the other hand, younger generations are going to be looking online, so you will need an online presence of some kind to attract these customers. Having a website is actually quite cost-effective and you can pay someone a reasonable fee to keep it up-to-date.
You will need quality personnel to help you build up your private medical practice. You are looking for team members, dedicated to providing care. Your goals will need to be aligned and everyone needs to be on the same page, with the same values and vision for the company. Your employees are an investment, hiring a wrong fit can be a costly mistake.
Time marches on
The most important thing to keep in mind, when starting out on this venture, is that establishing a private medical practice has similar, if not the same, demands as launching a small business. A shortage of planning is the downfall of any new start-up.
It can take on average ten to twelve months to setup a solo practice and be ready to accept patients. The time you spend on planning and organising your business plan will be one of the most important investments you make towards the success of your private medical practice.
Generally, a private medical practice doesn’t become successful overnight. The process is a long and strategic one, involving financial risk taking and cost-effective decision making in the beginning stages of your practice’s growth. It can often take, on average, two years before your fully formed private medical practice starts to see increasing profits. It isn’t uncommon for some healthcare professionals to lose money until a client base and steady referral network are established.