The smart guide to starting a medical practice

Starting your own medical practice can be enriching, offering greater autonomy and the potential for significant financial and professional growth. However, it also presents unique challenges that require careful planning and consideration.

Whether you’re a GP ready to shift from patient care to business management or looking to scale an existing practice, this guide will help you navigate the complexities of setting up and running a successful medical practice.

We will explore key motivations, practical business planning, hiring strategies, and the importance of leveraging technology to future-proof your practice.

1. Are you ready to run your own practice?

What is motivating you?

Starting out on your own and launching a new practice can be a major personal and financial investment, and needs serious consideration and forward planning. So ask yourself first, what is really motivating you?

While it’s important to be optimistic and passionate about your vision for healthcare, you also need to be realistic about the work and dedication involved. This means taking the time to evaluate what the real reasons are for starting your own practice.

You need to weigh the pros and cons and understand your vision and the risks. Consider the potential benefits of higher income, asset building and a more empowered professional lifestyle, and weigh them against factors such as business risk mitigation, staff management and the daily challenges of running a business.

Start with the end in mind

To discover what is motivating you, you need to start with the end in mind, says Steven Macarounas, Founder of The Private Practice, which runs regular workshops for practitioners who want to set up their own medical practice. “From the beginning, you need to set your goals and stepping stones, and start with the end in mind,” Macarounas says.

“Structure your business to suit your lifestyle, not the other way around. Otherwise you run the risk of your work taking over your life. So the secret here is to set up smart, so you set yourself up for success.” “Even when you do it and do it well, there will be difficulties and challenges. But if you get it right, the rewards will be enormous – for you, your family and the wider community.” Macarounas added.

For GPs looking to start their practice, it’s important to acknowledge that this will invariably mean spending less time with patients and more time on business operations. Many GPs will be ready to take this next step into business ownership and management, and those who still love facetime with patients should plan with that in mind to put the right management team in place.

Support is critical from the start

Your practice may start small, but you need to have enough foresight in your business plan to factor in growth and scale your business over time. According to Macarounas, this means seeking the right people and systems you can trust from the beginning to help support you as you embark on your new and exciting journey.

“Support is absolutely critical when starting out – from having the right doctors, business partners and practice managers, to the right referral systems,” Macarounas says.

As part of this support structure, you’ll need to structure your business and invest in the right clinical management systems that offer scalable solutions and are agile enough to adapt to a growing medical practice. Conversely, you’ll also need to have an exit strategy in place in the event of your practice shutting down, or decisions to sell, have a career change – or retire.

“It’s all about having the foresight to see what makes your practice valuable from now and into the future, at the same time, you need to consider the right support systems that make you work smarter, not harder as your practice grows and becomes busier.”

Understanding the ‘business’ of running a practice

You’re a highly qualified health practitioner, but are you qualified to own and operate a business? It’s time to start thinking like an entrepreneur and a CEO. This means there are some core skills you need to learn and conquer to manage the fundamental business aspects of running your practice.

First, take the time to evaluate your own business skills. You need to be able to answer some fundamental questions about how comfortable you are about ‘running a business’ and the financial responsibility and risks associated with it.

Welcome to the new regulatory landscape

Running a practice means you are responsible for ensuring your patients receive the best possible health outcomes, but that your practice structure is agile and can adapt to legal, regulatory and technological change.

If you’re serious about starting your own practice, you must be familiar with legislation, tax regulation, strict data privacy laws, medical compliance, and public administrative requirements. You’ll also need to understand and embrace the latest in technological innovation and digital transformation, if you want to maintain a competitive edge over securely protecting your patient records, as well as uphold your professional reputation as an innovative leader in your field of practice.

For guidance on getting started on the right foot, the Royal Australian College of General Practitioners (RACGP) offers a range of resources on running a practice, including practice standards, health standards, and accreditation processes.

Listen to the ‘medical marketplace’

For any business owner, a good mentorship and professional advisory support group are vital to researching and understanding the wider market demands of your medical practice – and how your practice fits within the wider health ecosystem.

“Whether you’re considering running a specialist practice, a general practice, or have a vision to scale, grow and sell medical practices, you’ll need to connect with people who have had the experience and foresight to guide your journey,” Macarounas says.

Obtain as much professional advice as you can across the appropriate medical networks and associations in the beginning, to ensure your plan is well-defined, transparent, and aligned with your ultimate vision for your new practice.

“You want to have a clear picture of what works and what to avoid, and how to develop a practice that not only offers a transformative level of healthcare to your patients, but also meets the wider vision you have for your balanced work and life goals and career aspirations,” Macarounas adds.

Some great sources of advice include:

• Industry associations – Like the RACGP, which offers valuable advice for practitioners ready to start their own practice.
• Industry solution providers – Like MedicalDirector, who can offer you support and advice on how much you will need to implement the right IT infrastructure that will scale and grow with your practice.
• Business educators – Like The Private Practice, who run workshops around Australia on the business of setting up, running and marketing a practice.
• Government bodies – Often offer tax and other incentives to help new businesses.
• Financial institutions – Can offer tailored financial advice and guidance on how to best structure any loans.

2. Your business plan

Get the basics right

A successful medical practice starts with a forward-thinking, flexible business plan that evaluates each aspect of the ‘business’ of your new practice. A good business plan is simple and agile and must communicate fundamental business information to business partners, staff, or any stakeholders such as financial institutions.

Get the basics right When you’re starting a practice, you need to understand basic business structure, and weigh up all the pros and cons. Is it going to be an associateship, a virtual practice or a traditional practice? Do your research thoroughly and obtain sound business advice before you decide which option is best for you.

A SWOT (strengths, weaknesses, opportunities and threats) analysis can also help evaluate each aspect of your business, identify any gaps, strengths, weaknesses and tackle potential pain points or risks. It also helps create a solid, foundational blueprint from which you can build upon.

Ultimately, the more strategic your approach to your business plan, the more equipped your practice will be to set up and run smoothly and achieve great outcomes for your patients, while giving you satisfaction that you are reaching your business vision.

Define agile processes and systems

Why can fast food chains run so seamlessly and scale so fast? Because they start with extremely efficient, agile and simple systems, and processes that even a teenager could understand. Applying this principle to a medical practice, a successful set up needs to be built on systems and processes that are streamlined, agile and scalable. A system that is easy to understand, train and use will not only make the entire set up process more efficient, but make growing your practice, training more staff and scaling that much smoother.

Start with cloud software, the rest will follow

According to Professor (Dr) Martin Samy, founder of the Samy Medical Group in Western Australia, an agile, cost-effective and future-proofed business plan starts with cloud software. This is because the efficiencies of cloud technology impact so many aspects of your medical practice from set up, to support, to growth. According to Prof Samy, so many professionals fail to realise how critical a good IT system from the start is to the entire business planning process.

Understand your unique selling position

One of the key parts of the business plan is understanding the current marketplace, Prof Samy stressed.

For instance, Samy Medical Group offers unique ‘selling’ provisions to the patients that is proven to be attractive and sets up to be different in the marketplace. “Know your competitors and what they do differently and you feel can be done better or offer a service that can be attractive to the patients,” Prof Samy says. “Recently, one of my skin specialists mentioned that he needs to be aware of the needs of the patients and that he believes that as a service provider, he has to be relevant and move with the times. I fully embraced his views.”

When I started the Samy Medical Group, the first thing I did was look for cloud-software I could trust, you might be thinking, why didn’t you start with your business plan, why did you start with finding the right cloud system? Well it’s because cloud impacts everything, from staff resources, capital resources to wider strategic planning.

“With cloud, I eliminated server costs, IT support costs, staff support costs from the start, and I could buy simple computer hardware and laptops – because all you need is the Internet. Such a huge cost saving from the outset makes a huge difference to my business plan and operational costs.

It also influenced how many patients we could forecast to see a day and helped us see clearly from the outset how we could make money. It even impacted whether we wanted to go bulk billing or not. In fact, we wouldn’t go for bulk billing if it wasn’t for cloud. That’s how much of an influence cloud has on your business plan.” Prof Samy says.

Setting up the ideal environment

From the get-go, you need to understand the importance of the right environment to set up a successful practice. This means considering where your practice will be located, how it will look and the kinds of services it will offer. Is your practice located in a high-density area? Are you planning to set up in a regional area? How will your new practice differentiate itself in the area you’re located in?

The ultimate location of your new practice will be determined by a variety of factors:

• Can you lease or buy a property?
• How easy is it for your patients to access your practice?
• Are there any high-quality services like nearby hospitals and referral services to connect to?
• How much competition is there in the area?
• Is there a need for a new practice in that particular area?

3. Common mistakes to avoid

Avoid these common pitfalls to ensure your practice gets off to a strong start.

An Ill-Determined Business Structure
Your business structure needs to account for staffing, local and regional competitors, and your practice’s short-term, mid-term, and long-term goals. Without a clear structure, communicating your plan to staff or stakeholders, including banks and investors, can be challenging, which could impede your ability to secure necessary financing.

Over-Complicating Your Business
Plan Keep your business plan simple, agile, and scalable. Over-complicating your plan may confuse potential business partners and stakeholders, delay finance approval, and frustrate future investors who prefer a clear and straightforward business model.

Underestimating the Business Skills Required
Excelling in clinical practice doesn’t necessarily translate to business acumen. Effective practice management requires financial, accounting, and administrative skills, as well as expertise in marketing, hiring, and staff management. Engaging a trusted team of business advisors and financial planners can help develop a tailored management plan that aligns with your goals and vision.

Failing to Future-Proof Your Practice
Invest wisely in technology and infrastructure to ensure your practice can evolve and adapt to the digital health ecosystem. Conduct a cost-benefit analysis before installing equipment or software to ensure it offers true value, generates efficiencies, and supports long-term growth.

Inadequate Early Planning
Thorough planning is essential, whether you’re starting a new practice or restructuring an existing one. Neglecting detailed planning can lead to missed opportunities and unforeseen challenges. Account for potential delays in administrative processes, such as credentialing and licensing, to avoid setbacks.

4. Calculating the cost of setting up your practice

Understanding the financial requirements of starting a medical practice is crucial for long-term success. To avoid unexpected expenses and ensure a healthy cash flow, it’s important to identify and plan for all startup costs.

For a comprehensive guide on calculating the costs of setting up your medical practice, please refer to our separate guide.

5. Hiring and managing your new team

Building a dedicated and skilled team is vital to delivering patient-centric care and ensuring your practice’s success.

Defining Your Ideal Practice Manager
A competent Practice Manager who is digitally savvy and patient-focused is crucial for efficient practice management. This individual should align with your practice’s vision and values, supporting seamless operations and growth.

Simplify Hiring with the Cloud
Utilising cloud-based systems can streamline the hiring process, making it easier to onboard and manage staff. For instance, Prof. Samy leveraged cloud technology to simplify staff management at the Samy Medical Group, reducing the need for highly experienced administrative personnel by automating many tasks through Helix’s cloud software.

Allow Workplace Flexibility
To combat practitioner burnout and promote work-life balance, consider adopting a cloud-based practice management solution. Such systems offer flexibility, enabling practitioners to work remotely and manage their schedules more effectively.

6. Minimising the risk

Effective risk management is essential to safeguarding your practice, staff, and patients.

Clinical Risk Management
Implement comprehensive risk management strategies that cover all aspects of patient care. This includes identifying potential risks, learning from past adverse events, and establishing proactive measures to mitigate future risks.

RACGP Standards
Familiarise yourself with the RACGP Standards for General Practices, which provide guidelines for improving the quality and safety of health services. These standards help identify and address gaps in your practice’s systems and processes.

Privacy, Security, and Data Management
Patient data management and privacy are paramount. Ensure compliance with the Notifiable Data Breaches (NDB) scheme and stay updated on patient privacy laws as outlined by the Office of the Australian Information Commissioner (OAIC). Use robust security measures to protect sensitive patient information.

Legal, Insurances, and Policies
Seek legal advice and secure appropriate insurance coverage to manage the risks associated with running a medical practice. Shop around for tailored solutions that meet your specific needs.

Technology that Supports Risk Management
Invest in secure and compliant software solutions that support data protection and risk management. For example, MedicalDirector’s Helix, built on the secure Microsoft Azure platform, ensures that patient data remains protected during data migration and software updates.

6. Empower your practice with cloud

Future-proof your practice with innovative cloud solutions like Helix, which supports seamless integration with various healthcare technologies, enhancing patient engagement and practice management.

Get Up and Running Quickly
Helix’s user-friendly interface simplifies setup and training, allowing your practice to be operational swiftly.

A Scalable Solution
As your practice grows, Helix scales to meet increased patient demand, ensuring continuous operational efficiency.

An Integrated Solution
Helix integrates with a wide range of health technology partners, offering advanced tools for patient engagement, referral management, and financial processing.

Security is a Priority
Built on the Microsoft Azure platform, Helix ensures stringent data security, with backups across Australian data centres, meeting local privacy standards.

Work Your Way, Where and When You Want
Helix’s cloud-based system allows you to manage patient interactions and practice operations from anywhere, providing flexibility and convenience.

World-Class Support
MedicalDirector offers comprehensive support from implementation to ongoing operation, helping you plan and execute your practice strategy effectively. For more information on Helix, visit MedicalDirector Helix.

7. Starting a medical practice checklist

To assist you in the process of starting a new practice, here’s a detailed checklist:

• Financial Planning: Secure funding, establish billing processes, and budget for ongoing expenses.
• Legal Compliance: Obtain necessary licenses, comply with healthcare regulations, and implement privacy policies.
• Infrastructure Setup: Select a location, equip your practice, and install essential IT systems.
• Staff Recruitment: Hire qualified healthcare and administrative personnel who align with your practice’s values.
• Marketing Strategy: Develop a strong brand identity, create an online presence, and engage with your community.
• Patient Care Protocols: Define clinical workflows, implement electronic health records (EHR), and ensure patient safety.

For a more comprehensive checklist, download our ‘Starting a New Practice’ eBook.

Takeaway

Starting and running your medical practice is a significant undertaking that requires careful planning, dedication, and a strategic approach. By understanding your motivations, developing a comprehensive business plan, hiring the right team, and embracing technology, you can set the foundation for a successful practice that not only meets the healthcare needs of your patients but also aligns with your personal and professional goals.

In addition, with the rise of digital healthcare, ensuring robust cybersecurity measures to protect against different types of cyber attacks is paramount. With the right support, a commitment to continuous improvement, and a focus on cybersecurity, your medical practice can thrive, secure sensitive patient information, and make a positive impact on the community it serves.