Solo Practice

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DiveMD

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Do any of you have good insight regarding opening a solo practice these days given the economic environment and the uncertainty Affordable Care Act? Is a glaucoma solo practice (with general stuff) a possibility? Do you recommend any resources (i.e.: consulting firms)? Thanks in advance for any advice. :thumbup:

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It depends on your location, but there is a big need for glaucoma in many parts of the US. The glaucoma specialists here are scheduling out 2-3 months. One of the nice things about glaucoma is that you see the patient back on a regular basis, so you can build up a practice much quicker than a comprehensive guy.

The first step is to develop/write a business plan (look for templates at sba.gov) and a projected pro-forma in order to obtain a loan. Loans can be difficult to obtain, even for physicians. It helps if you have a part-time or contract job with another practice or have an income producing spouse.

After that, it is important to establish an office location so you can begin the credentialing process (some can take months) for insurances/hospitals. If you have not done so already, obtain a full medical license and set up a business entity. Then, start your Medicare application (PECOS online).

Check out this website: http://iballdoc.blogspot.com/
Read it from the beginning. He has a lot of helpful tips.

I did it without a consultant. Make sure you get references from consultants because, from talking to my colleagues, consultants can be hit or miss.

If you have any specific questions, ask away here (or with a PM).
 
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Thanks a bunch. I've been reading the iballdoc blog and it's addicting. I'm hoping to make the move to solo practice in 12 to 18 months. I'll probably PM you at some point on the near future. Thanks again for your willingness to help.

Dive MD
 
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Definitely doable. iballdoc has done a good job in his blog of documenting each step of his launch and his progress over the first couple of years of his practice.

I launched a solo subspecialty practice in 2008, and my own experiences were similar to his.

If you don't mind getting deeply involved in the most mundane parts of a small business and have a little taste for risk and hard work, the payoff is worthwhile. If you keep your expenses in line and start small, you can be comfortably topside on operating costs in a few months. Mine took about five months. I think iballdoc took about the same.
 
Something to keep in mind is that as a solo doc, your practice will probably be worth next to nothing when you retire (unless you own a building or something). There are a few docs in my area that have been trying to unload their practices for years, but there simply aren't any takers. Equipment sells for pennies on the dollar, and no one is interested in paying goodwill for the patient base. Of course, if you play your cards right with what you make over your career, you may not need to get anything out of the practice, when the time comes. You can just close it down and hand your charts over to another practice (someone has to be caretaker for the charts, for legal purposes). If you're looking at solo practice as an investment, you're going to be disappointed. Just something to think about.
 
For the most part, the days of goodwill sales are gone. Equipment sells for whatever the market will bear. Ebay is a good indicator of value. If you have a group with a joint ownership structure that allows buy-in and buy-out, that is about as good a deal as you will get. Even those valuations will rely on asset and AR assessments in arriving at a figure. Above all, payments determine how much a person can pay for a practice share. A practice has to earn well to be worth anything.
 
The idea that there is not "goodwill value" in practices is somewhat of wrong. In today's sales market, there is goodwill involved in most every practice. Granted, not the amounts that were there 10 or 15 years ago, but it does still exist.

The easiest way to describe goodwill is to look at a practice and determine how hard it would be to duplicate that same practice across the street. If you have someone who is 75, seeing 5 patients per day, obviously there is not going to be any value. However, a good practice seeing 40+ per day with a good reputation and referral system will have goodwill.

In the end, the value of a practice is what someone is willing to pay for it. That is the bottom line.
 
How many lanes and square footage did you all start with? Did you have a tech and/or a secretary right away? Did you spend a lot of time visiting other docs and optoms? Which equipment did you get? Any mistakes you want to share? Thanks again.
 
Consulting firm is not necessary. Expensive advice to point out the obvious.

You can research the area you are interested in: numbers of specialists, population, hospitals, surgery centers, referring optometrists, dominant insurers and employers, ages of ophthalmologists, incursion by academic center satellites, etc.

You can prepare a simple business plan.

You can find and hire a lawyer to draft your corporation charter and get your EIN.

You can shop commercial loans and lines of credit. Stick to local banks.

You can prepare a budget for launch and for the first two years of operations.

You can shop your own equipment.

You can scout for available office space.

You can apply for the necessary licenses, hospital and surgery center privileges, and Medicare and insurance carrier participation agreements.

It is all tedious, but very much do-able.

If you want to spend some money on advisers, leave it for architects to help you with office layout if you are going to build out a space. If you do that, make sure they understand very well you expect them to stay in budget, no excuses.

I launched a new solo practice in the worst part of this last downturn and was topside in five months. If you are willing to do a lot of work yourself and don't go overboard on expenses (BTW, I hired a tech and a front desk person and a part-time biller when I started, I recommend you do the same and do your own billing in house.)
 
Which company or service did you use to generate your website, logo, etc? Would you consider incorporating using one of those online services? Legazoom.com, etc...

OrbitsurgMD,

Which overhead expenses would you consider overboard? Thanks for the input.
 
1500 to 2000 sf is a reasonable figure to start with.
 
Your biggest overhead category is staff salaries and benefits. I can't emphasize enough how important it is to choose the right staff. Also, nip staff problems in the bud, document deficiencies and if those warnings are not heeded, replace people who are not working well for you. I have a very small staff that I pay well and treat well, and they know it.

Space is your second biggest expense. You need enough to get you off the ground but you shouldn't over-rent. Every square foot costs, and especially if you are building out, every square foot should add something of value. Plan on having two exam rooms within a year and if possible a third within the first five years. You need space for diagnostic devices--camera, perimeter and OCT.

Your own draw for personal expenses needs to be considered in your startup budget. Minimizing that figure is essential. Don't forget health insurance and other important expenses.

Utilities add up: you will need electric and possibly gas service. Phone service can be done different ways, including through your cable provider, you need internet. You will need to have your office cleaned, so budget a few hundred a month for that. You will need basic office supplies and an inventory of medical supplies. That will come to $3-4K in a startup. You will need some kind of copier, although if you start out with digital charts, then an all-in one laser with fax might be enough. You can always upgrade that stuff later. You might want a couple of trays of instruments for small procedures, maybe a couple of smaller trays for irrigations and foreign body removals, a steam sterilizer is key (I like Ritter, but there are other good ones, too.) instrument wrap, sterilizer pouches, steam indicator strips and tape, instrument cleaning supplies (little toothbrush, soap, distilled water, instrument milk). An ultrasound cleaner is very useful for processing instruments.

An equipment budget should include what you need in lane equipment as well as the small but pricy items like a Hertel, etc., office furniture and appliances, computers, software and network installation along with some IT support.


Lasers are an individual decision. I have day-rented SLTs, and that was OK, and now I own a diode laser, and that is OK. I would have saved money doing the leasing, but I am less tied down to scheduling laser procedures now that I own the laser and can move it relatively easily between my offices. One of my surgery centers has a nice Ellex YAG, but when I came across an opportunity to buy a nice used current model YAG, I bought one. Has it paid for itself? No. But I like the convenience. I did not start out with a laser, though. Unless you have none available to you or there is some feature of your practice that requires you have one from the start, then I suggest waiting a little before buying a laser.
 
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Your biggest overhead category is staff salaries and benefits. I can't emphasize enough how important it is to choose the right staff. Also, nip staff problems in the bud, document deficiencies and if those warnings are not heeded, replace people who are not working well for you. I have a very small staff that I pay well and treat well, and they know it.

Space is you second biggest expense. You need enough to get you off the ground but you shouldn't over-rent. Every square foot costs, and especially if you are building out, every square foot should add something of value. Plan on having two exam rooms within a year and if possible a third within the first five years. You need space for diagnostic devices--camera, perimeter and OCT.

Your own draw for personal expenses needs to be considered in your startup budget. Minimizing that figure is essential. Don't forget health insurance and other important expenses.

Utilities add up: you will need electric and possibly gas service. Phone service can be done different ways, including through your cable provider, you need internet. You will need to have your office cleaned, so budget a few hundred a month for that. You will need basic office supplies and an inventory of medical supplies. That will come to $3-4K in a startup. You will need some kind of copier, although if you start out with digital charts, then an all-in one laser with fax might be enough. You can always upgrade that stuff later. You might want a couple of trays of instruments for small procedures, maybe a couple of smaller trays for irrigations and foreign body removals, a steam sterilizer is key (I like Ritter, but there are other good ones, too.) instrument wrap, sterilizer pouches, steam indicator strips and tape, instrument cleaning supplies (little toothbrush, soap, distilled water, instrument milk).
An ultrasound cleaner is very useful for processing instruments.

An equipment budget should include what you need in lane equipment as well as the small but pricy items like a Hertel, etc., office furniture and appliances, computers, software and network installation along with some IT support.


Lasers are an individual decision. I have day-rented SLTs, and that was OK, and now I own a diode laser, and that is OK. I would have saved money doing the leasing, but I am less tied down to scheduling laser procedures now that I own the laser and can move it relatively easily between my offices. One of my surgery centers has a nice Ellex YAG, but when I came across an opportunity to buy a nice used current model YAG, I bought one. Has it paid for itself? No. But I like the convenience. I did not start out with a laser, though. Unless you have none available to you or there is some feature of your practice that requires you have one from the start, then I suggest waiting a little before buying a laser.

Thanks man. I'm a glaucoma doc so I'll probably need an SLT/HVF/camera/OCT from the beginning. I'll defer the Yag/Argon cost since local hospitals have them. I guess my biggest weakness is generating the business plan and will probably use some help for that. I can find a local broker and probably someone to design my office space. It's a lot of work and risk but I can’t wait to have some independence.
 
I wrote my own business plan. You do not need to hire anyone to do that for you. It is really easy. The purpose is only to show some expected structure to your operations for the first 12-24 months so that your lenders have an understanding of what your practice is going to be about, why you think it will be successful in your planned location, and what your expected costs and revenues will be during that time. You do not have to be accurate to the penny, but a good estimate of how much you plan to spend is all that is needed. The bank loan department is likely going to be experienced in looking at your numbers and will have a sense based on other clients in your area whether you are on target with your estimates. Showing a gradual income rise after the first three months and a realistic target is all you need. Specifying what you expect your patient payer mix will be (glaucoma 70+% medicare) and a general plan for billing and collections is all that is necessary. You do not have to get into excessive detail as to estimated income from your various procedures and studies; you don't need that kind of detail.

For a single office, in glaucoma, you need two lanes, a perimeter (good ol' Zeiss or, for a little more, the Haag-Streit Octopus 900 Pro, which is the bomb) , a non-myd retina camera that will do stereo pairs (Nidek's is nice) a Yag (Nidek or Ellex, or if you want to go spendy, Zeiss or Meridian) and some solution for laser trabeculoplasty. All the 1064 NdYAG manufacturers have piggyback 532nm frequency-doubled units that mate with the YAG slit lamp which make the cost lower than a stand-alone unit. Lumenis' SLTs are nice, but hideously overpriced for a one-trick pony. Iridex's 810nm multipulse diode gives you some options both for trabeculoplasty and for TSCPC if you want to do that; it can also cut stitch. For a scanner, for glaucoma, you really don't have much choice besides Zeiss Cirrus 5000.

For lane stuff, you might as well get what you like. You will live with it for awhile. I am partial to Reliance chairs and stands. For slit lamps, I bought used current models and am comfortable with most anything made. Haag-Streit 900 BMs are made now with only the LED lamps (very nice, but almost $13K) but you can do fine with Topcon, Marco (made by Tagaki of Japan, very nice) Zeiss (fantastic optics in the current line; I just wish the lamp part was a little nicer) and apparently Keeler is launching a very slick new slit lamp that appears to be targeted at Haag's 900 BQ but much less expensive. I recommend used reconditioned phoropters.
 
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I agree. I would not hire a consultant to write a business plan. You can find a template on sba.gov. The banks are most interested in your pro-forma (mostly) and marketing plan. My local bank turned me down and I ended up obtaining a practice loan from a national bank. It is easier to obtain a loan if you have a part-time job (or a stable income source). The key is choosing a convenient location.

Remember, it can take a long time to obtain a full medical license and obtain a Medicare number. The commercial plans usually have a quick turnaround, but it still may take a few months. You want to be on all the insurance panels before opening, although you can hold Medicare and Medicaid claims until you obtain a number. Always negotiate your commercial fee schedules. Your Medicare number does not transfer with you, and you need to apply for a new number if you have a new tax ID number. I would go ahead and form an LLC with a federal tax ID. You will need this before credentialing.

2000 sq ft is reasonable to start, but remember to build for the future. I started up with more space but had my build-out covered by the landlord. You'll definitely need an OCT and VF. I highly recommend Haag-streit Octopus and the Heidelberg Spectralis. Lumenis' SLT patent runs out this summer, so expect other companies to sell SLT lasers (with a price drop). You can probably start with one lane, but two lanes would be nice. You can build your own vision charting system - I used sharpVA along with small lenovo computers. It is much cheaper than the all-in-one options. If I had to do it over again, I would have taken more time to review EMR choices. Some programs have an all in one screen with all of the info on one page. Other programs split the info into separate tabs. Find the choice that works better for you. Also, carefully review PM (practice management/scheduling) programs.

You need to hire a front desk person from the beginning (it is impossible to run a clinic while answering the phones). You need to trust this person 100%. This person will be the face of your practice and can make or break your practice. He/she will also be responsible for collecting monies. I would consider paying a little more for the ideal candidate. Remember that you can train skills, but you cannot change personalities.

I would definitely learn about billing and keep billing in-house the first couple of years (no one is going to care more about being paid than you). It will drive you insane the first couple (or plus) of months, but learning about billing is absolutely necessary to your practice's well being.
 
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I am trying to gather which equipment to get:

1)Octopus 900 (sounds like the way to go)
2)Fundus camera, which one Nidek vs. Zeiss.
3)Lasers: Probably don't need them right away but I cut my flap sutures with argon laser. Any good options?
4)OCT SD: Zeiss 5000 vs. Spectralis (super expensive?)
5)Any good Laser combos you guys recommend in specific?
 
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I am trying to gather which equipment to get:

1)Octopus 900 (sounds like the way to go)
2)Fundus camera, which one Nidek vs. Zeiss.
3)Lasers: Probably don't need them right away but I cut my flap sutures with argon laser. Any good options?
4)OCT SD: Zeiss 5000 vs. Spectralis (super expensive?)
5)Any good Laser combos you guys recommend in specific?

2. not sure, but you may get a discount if you buy multiple Zeiss products.

3. Iridex or Ellex

4. Love the Spectralis. If you don't need autofluorescence, pricing may be very similar. You are probably more familiar with the Cirrus because Zeiss has a bigger footprint in academics. I almost bought the Zeiss, but the salesperson turned me off (pushy and not knowledgeable about the products). I have heard that Zeiss products are more difficult to network and I also do not like the all-in-one design. They have a reputation for not supporting their older products. Ergonomically, I prefer the Heidelberg. That being said, the Cirrus may be easier to use (almost one click). I hope you get some input from Cirrus users.

5. Ellex.
 
What can you all comment on EMR programs? NextGen, nextech, etc? Also, Lenstar vs. IOL master? I'm familiar with IOL master...
 
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The iballdoc blog went private. iballdoc and I are restarting it at www.solobuildingblogs.com.

We will be publishing all the old posts from thr previous iballdoc blog, with updates from a 2017 perspective. We will also discuss content he wanted to cover in the past, but never got around to, including detailed steps on how to start a practice, as well as practice management topics such as billing, coding, practice finance and accounting, hiring and managing employees, marketing, contract negotiations, etc.

We plan to publish at least 2 posts a week from now on. We look forward to everyone's interest and readership. Thanks.
 
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