PRACTICE MANAGEMENT

First-year Do's and Don'ts

DO start your practice with self-knowledge and a tight belt.

By Larry E. Patterson, M.D.

► Imagine starting your own practice. The images already have formed in your mind, and the pictures get clearer every day.

I started my practice right after my residency, and I've enjoyed the hard work and the rewards. But I've seen other new practices fail. To ensure your success, remember the following: DO be thoughtful. DON'T rush. And DO read these do's and don'ts.

DO Know Yourself

Many young doctors who feel drawn to private practice never ask themselves one very important question, "Do I want to own a practice, or do I want to be an employee?" Or perhaps they ask the question but don't answer with knowledge of the realities that are involved.

I've met many younger associates who say they want to become a partner in a practice or break out on their own. The autonomy appeals to them. They want to create the practice they envision, and they want to have the benefits and income that come with being an owner or partner.

However, sometimes associates only want the responsibilities of an employee. That is, they don't want to work evenings or weekends or put in the time and effort it takes to grow a practice. They want to instantly achieve the status of doctors who've been in practice for decades. They want the thriving business, where they perform a large number of surgeries and make a great deal of money. But it takes many years to accomplish such a goal.

I tell these associates that they need to take an honest look at their needs and desires, as well as the realities of starting a practice. You can't have the privileges and income of ownership, while enjoying the more carefree lifestyle of an employee.

Don't get me wrong, this isn't a choice between laziness and hard work. Both jobs are challenging. This is a choice between the long hours, business planning and responsibility of practice ownership and the family time and freedom of being an employee. More and more doctors are choosing to become employees and I applaud them, just as I applaud new practice owners, for knowing themselves well enough to make the choice that's right for them.

DON'T Go It Alone

If you've chosen to start a practice, congratulations. You're probably a bit nervous about the process, and that's understandable. This is a huge professional and financial step, and in all likelihood, you've never done anything like this before. Thankfully, many other people have done it. So don't go it alone. Take advantage of all of the resources that are available to you.

Your best resources are your colleagues. Midway through my residency, I talked to doctors who'd been in practice 1 to 4 years. Most doctors were very open and willing to talk to me, and since they'd just started their practices, the information was current. Your alumni association may be another resource that can connect you with new practice owners. The American Academy of Ophthalmology and other organizations also provide resources for new doctors.

Perhaps you're assessing a market need for your practice, creating a business plan or seeking a bank loan for diagnostic equipment and computer systems. One source of feedback is the bank itself. Loan officers might point to weaknesses in your business plan that you need to refine.

There are consultants who can help with business planning, too. If you use a consultant, I suggest getting a recommendation from another ophthalmologist to ensure that the person has had experience and success as a consultant for a medical practice.

DO Start Small

This "do" is packed with "don'ts." Don't spend more than you have to on rent, equipment and staff. Don't get too deeply into debt. Don't buy brand new equipment — excellent used equipment is always available.

Don't choose the most expensive location, either. In fact, don't buy office space right away. Owning is better than leasing eventually, but not in your first year. You don't know how large your practice will be or how fast it will grow, so lease space now and build or buy to suit your long-term needs later.

Don't hire a large staff. Hiring a full and qualified staff is expensive. When you start out, you only need one person at the front desk to greet patients and handle billing. You can do the rest. You don't need a technician. You might see only a handful of patients each day in the beginning. When the workload increases, then hire one more person. I started this way, and now I have 60 employees. Even today, when doctors join my practice, they don't get extra help until they're seeing 15 to 20 patients a day.

DON'T Go Hollywood

You've had some lean years in school, and now you're making "real money." But don't go overboard and buy a $100,000 sports car or a $2 million home. Aside from the fact your purchases may not send the best message to your patients, it makes zero financial sense to take on added — and unnecessary — debt when you're just starting out.

I drove an old Mazda with vinyl seats and bad air conditioning until my practice was established. I wasn't looking for the ultimate driving experience. I was looking to start a business. I quickly paid off my capital startup costs and college loans — something I never could've done if I'd been racking up expenses and debts elsewhere. Live modestly, establish yourself and pay off debts. It's good for your peace of mind as well as your financial health.

Preparation is Key

Starting your own practice is an ambitious undertaking — but one that can pay big dividends and reap great rewards. Make sure you're up to the task of being your own boss. Do your research, network with colleagues and make careful plans. If you do, you'll be more prepared than most new ophthalmologists — and you'll be on the road to success. nMD