In the fifth episode of Practice Matters, Payal Kohli, MD, founder of Cherry Creek Heart in Denver and the medical expert for 9News/Daily Blast Live, discusses three mistakes she made while starting her private practice and advises new practice owners on how to avoid these pitfalls.
The following is a transcript of her remarks:
Hello, I’m Dr. Payal Kohli, founder and medical director of Cherry Creek Heart in Denver, Colorado. On today’s episode, we’re going to talk about what you should not do when you’re starting a private practice. And boy, do I wish I had seen this episode before I started my private practice.
Now, trust me, you’ll still make some stumbles, but it’s a really great way to get a sense of what you should be thinking about before you head into your practice. So let’s dig in.
Three things that I would do differently if I had to start my practice all over. Actually, I would say there might be a dozen things that I would do differently, but I’ll limit my answer to three.
The first: contract negotiations and credentialing with insurance companies. Now, I cannot emphasize this enough, I am somebody who’s very cost conscious. I wanted to keep the overhead down. So I said to myself, “Well, what’s the big deal? I’ll just reach out to the insurance companies, fill out all the paperwork, and just get myself credentialed. I don’t necessarily need to pay a contract negotiation and credentialing company.”
Big mistake. Because what I realized is that if you just put yourself out there and fill out the paperwork, they’re going to give you the leanest, the most inexpensive contract that they can, and you’re just negotiating with them as a single individual.
Instead, what I ought to have done is perhaps gone and talked to some IPAs, which are independent practice organizations, which is a whole host of doctors that have come together and they’re negotiating as a unit with the insurance companies.
Now, of course, I’ve joined an IPA now, but it’s almost too little, too late because that’s 3 years into my practice. Really, what I wish I had done is started with one of those companies from the very beginning, so that perhaps my contracts could have been a little bit more lucrative. Because, remember, this is how you make your money, how much the insurance company pays you for every work RVU [relative value unit]. So if you have a very, very low rate with the insurance company, the amount of revenue you’re going to get is going to be really limited.
So make sure you reach out to those IPAs, talk to them, try to find one that has a good contract and work with them.
Number two: leverage your resources. What I did when I was starting a private practice is I went all by myself, I found a location, I put my flag down in the ground, and I started my office.
Instead, what I should have done is gone to all the hospitals in the area, because many of the hospitals, as you know, have medical office buildings attached to them. These hospitals will offer what’s called a “welcome wagon,” which is a little welcome financial package to help physicians relocate to their geographical areas.
Now, it works out for the hospital because you get a chance to bring business there and send them business, your imaging, your procedures, and what have you, and it works out for you because that can really be a nice little nest egg that they provide for you to get your practice off the ground.
This is something I wasn’t even aware of that hospitals provided, but it’s a great way to not necessarily be working for the hospital — you may not even have to be affiliated with the hospital — but as long as you’re in their geographical area, this could be something that you could take advantage of.
The third: I left a hospital-employed model and I moved with zero patients to start my practice. If you’re one of those who’s starting from the ground up and you don’t already have an established patient base that’s going to follow you, it is really important to start to market before day one, because what you really want to keep your practice profitable is to start seeing patients right away.
So make sure that people know you’re opening and build up that excitement. It’s just like a preview to a movie, right? You build up the excitement; you’re more likely to go to see that movie. In the same way, build up the excitement that you’re going to be there so that you start seeing patients on day one of your practice.
If you have additional things that you might have come across in starting your practice, please write in to us, please share your thoughts and comments as well, because our collective knowledge is what’s going to help all of us avoid these roadblocks moving forward.
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