5 Cost-saving tips when starting a medical practice
Starting your own medical practice can be exciting, but for a practice to have healthy cash flow, and to scale and grow, you need to identify and plan for all your start-up costs – so you can avoid as many surprises as possible.
In MedicalDirector’s latest ebook, ‘Calculating the cost of starting your medical practice,’ we reveal how to calculate the costs of starting your practice, as well as some simple ways to cut costs from the start.
1. One-time versus ongoing costs
Make sure you identify which costs will be one-off, which are monthly, quarterly, and annually. This will help you better manage and set up your budget, and organise your cash flow from the outset. It is important to identify and budget for this from the beginning, so you don’t get caught out in the future.
“You will also need to factor in which costs are capital investments, and which may be variable expenses for your practice,” Professor (Dr) Martin Samy, founder of the Samy Medical Group in Western Australia, said.
2. No one-size-fits-all financial plan
Your exact start-up costs will depend on the type of medical practice you are starting, and the region in which you are operating. The amount of costs in the different categories can also vary across industries and regions.
For example, a specialist practice may need to invest in specialist clinical management software, while a larger general practice would need to invest in a larger IT platform that is tailored to suit a larger team of doctors and staff.
3. Set realistic expectations
There are many costs to consider when starting a medical practice, and it might seem daunting at first when you’re trying to plan for every contingency.
If you get the timing wrong, costs, fees, charges and even penalties can escalate quickly – and you can find yourself under pressure to comply without enough income stream. Meanwhile any unforeseen delays for your practice to open and generate revenue can have an impact on your cash flow and costs. All of this can have a significant impact on your practice as a business, and your professional reputation in the industry.
The simple solution is to keep it real and generous when overestimating both the time and money it takes to start a medical practice. Some experts recommend adding at least 10% on top of your total costs to cover any miscellaneous expenses or unforeseen charges and fees.
4. Cut costs with the cloud
According to Prof Samy, starting your practice with the cloud can be the ultimate cost-saving measure when starting a practice. It eliminates the cost of servers, expensive hardware and IT support staff, and also cuts down on significant operational costs while driving efficiencies.
With a paperless cloud software solution, like Helix by MedicalDirector, Prof Samy could also cut down costs associated with printing, the use of a fax machine and manual, time consuming paper-based processes.
“I had quotes of $70,000 – $80,000 for my IT and phone systems alone, but with a cloud practice management software like Helix, all I need is one network cable with the Internet,” Dr Samy said. “Helix is so brilliant, it makes setting up a practice so simple and so cost effective. I could get up and running with minimal costs, and enjoy many more operational efficiencies from the outset than if I had started with a traditional server- based system.”
5. Reduce staff and administrative costs
A major cost for any practice is staffing. These increase each year, and if you have mixed billing, then you need to ‘double handle’ the patient, which risks doubling your administrative costs.
Automating and streamlining repetitive tasks can significantly boost efficiency and reduce time and money wasted on manual or administrative tasks. eReferrals, automated patient booking recalls and reminders, integrating EFTPOS payments, are just some of the many ways to keep processes within your practice simple, efficient and fuss-free.
For Prof Samy, a more streamlined and automated reception system significantly reduced his reception and staffing costs, while improving the patient experience.
“Because Helix has seamless integration and automates so much of our workflow, it cuts down a lot of our admin and staffing costs, which means we only need one support staff for four doctors,” Prof Samy said.
To find out more, download our free ebook: ‘Calculating the cost of starting your medical practice’