Assessing competition for a new start-up

[Greywater653]

Hi all,

Long time lurker, first time poster here. I’m a soon-to-be graduating fellow with plans to start a practice within the next year. I realize there have been several great discussions in other threads on this topic, so I’ll do my best not to retread tired ground here.

Briefly, I’ll be starting a solo practice in an upper-middle class suburb in the south. I have an advantage in that my clinic space will be rent free, but will take a little bit of remodeling to allow for a procedure suite. I anticipate 10-15k for the remodel. Beyond that, I’ll have the same basic overhead costs (staff, marketing, malpractice, C-arm, EMR, etc..) I already have a part-time anesthesia job lined up and have no problem working 2-4 days/week doing gas for as long as necessary. Per much of the conventional wisdom echoed on this forum, I’ll be starting very lean and going slow.

The region is a well populated, “suburban-sprawl” type area in a state with favorable medical economics, but there are also about 3 other pain practices within a 5 mile radius. One of these I interviewed with prior to deciding to go solo, and was offered the job based on their need for expansion. My questions, that I hope will spark an interesting discussion, are related to competition and understanding your market…

What is the best way to determine if a given market is already saturated? Does the fact that at least one other group is expanding in an area indicate that there’s still room for more pain docs?

Is there any reliable way to determine ahead of time if one might have trouble getting credentialed with insurance panels due to regional competition?

How extensive and formalized should the market research be prior to starting? Could one do it themselves via city-data, phone, surveys, social media, word of mouth? Would it be overkill to consider hiring a firm to conduct a formal analysis of the market?

I’m grateful for any and all responses, thanks.

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[promethius]

Congratulations on taking the plunge. If you manage your practice well, you will thank yourself 5 years from now for going out on your own.

Regarding market saturation, if you see a pain practice every other block, then that may be a good indication the market you are in may be saturated. In all seriousness though, the most telling sign that a market may be saturated is your difficulty getting on insurance panels. I heard back from an insurance company just the other week that it is not accepting any more new physicians in its network for the foreseeable future because it already has enough in-network physicians in my area. 2 of the insurance companies I am credentialing with actually asked me what my specialty is before deciding to allow me to credential with them. Other than calling up the insurance companies and talking to them directly, I do not know of any other way that you will know if you may have difficulty getting credentialed with them.

Other than commercial insurances, you can consider building up your practice with Medicare, Medicaid, and/or workers' compensation patients. You can also consider going the personal injury route, which is quite lucrative, but with the caveat that you will only get paid if and when the case settles.

Other than how many pain clinics are in the area where you want to practice, you may also want to research the referral patterns in your market. Primary care physicians may already have set referral relationships in place that may be hard to crack. Also, orthopedic and neurosurgical groups may have their own in-house pain physicians who they refer to.

In the end though, my advice is to build your practice where you want you to live and not worry too much about how saturated the market is. The beauty of pain is that you can be truly independent and set up shop anywhere. True, you may be able to grow faster in a less saturated market, but if you offer quality care, word will get out and quality patients will gravitate towards you.

 

[hyperalgesia]

Is there any reliable way to determine ahead of time if one might have trouble getting credentialed with insurance panels due to regional competition?

You will be ahead of the game if you apply to get on insurance panels in advance. Having an office address already will allow you to do this. Even if you can claim a future office address, you can do it. Your correspondence address can be different. I know people that signed up for one of those businesses that provide an "instant professional address" and got on all his panels including Medicare, before taking the plunge.

 

[pmrmd]

A simple and cheap way to assess your competition is to call and ask how soon a new patient visit can be scheduled. If same day or tomorrow, then you have to find out if they suck or not. If multiple practices have a several week wait, then you're good to go.

But do what hyperalgesia recommended. It's what I did as well.

 

[promethius]

You will be ahead of the game if you apply to get on insurance panels in advance. Having an office address already will allow you to do this. Even if you can claim a future office address, you can do it. Your correspondence address can be different. I know people that signed up for one of those businesses that provide an "instant professional address" and got on all his panels including Medicare, before taking the plunge.

Never knew you can sign up for an "instant professional address." You cannot do anything without a business address, including applying for a business license, EIN, bank account, let alone insurance credentialing. How does getting an "instant professional address" work? Won't you have to change your "instant professional address" to your actual address once you have one? I am assuming the process for changing an address is easier than applying initially, but it still takes time and requires contacting each entity individually and doing it manually.

On another note, what is the policy with Medicare regarding seeing patients once you submit the enrollment application online? I heard you can see Medicare patients the day you submit your Medicare application online, but you cannot bill those patients until your application gets approved, which may take up to 3 months. If that is correct, what do you do with copays and deductibles during the meantime? Are you able to collect those at least at the time of appointment, even if your application is not yet approved? Do you have to keep track of the billing information for all of the Medicare patients you have seen while your application is getting processed, and then submit them all at once when your application is finally approved? I heard you can only do this retroactive billing with Medicare, but not with any other insurances.

 

[Biohazard685]

I'm in a similar situation since finishing fellowship. Got sick of the how other practices just wanted to use me as cheap labor. Took the plunge and tried to start my own thing. If you want more info feel free to drop me a PM. I'm in South Florida btw.

 

[deleted185747]

Regus.com for professional address and mail handeling.

Intermedia.com thru costco for internet based phone which you can forward to your Cel or your office or complex voicemail system.

Most important feature of a business owner is ability to sell oneself and motivate others. Some are great at marketing themselves and self promotion, most MDs are not. Businessmen learn how to win friends quickly and work to become useful and popular and are genuinely liked. MDs don’t have to learn this to get thru training, just the clinical/procedure stuff. To truly assess your competition you have to figure out why referring physicians will send patients to you.