Establishing Your Own NP Practice - Storehouse€¦ · •As you grow your business, it becomes...
Transcript of Establishing Your Own NP Practice - Storehouse€¦ · •As you grow your business, it becomes...
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EstablishingYourOwnNPPractice
David Stull, CRNA, CFP®, CRPS®
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• How we are different…
• Fee‐Only – NO Commissions• We are Fiduciaries – CFP and CPA
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• What we do…
• A Personal Financial Plan• Monthly Investment Management• 401(k) and Other Retirement Plans
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FiveStepstoEstablishingYourOwnNPPractice
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•What is the best way I can increase the probability of establishing a successful independent practice?
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•What is the best way I can increase the probability of establishing a successful independent practice?
•Prepare a written business plan!
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Step1WrittenBusinessPlan• A business plan is a document that encapsulates the practice strategy, future directions of the practice and an action plan to achieve your objectives.
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WrittenBusinessPlan• Question to answer ‐ How does my education, training, skills, interests and personality translate into a profitable business?
• Education – Highly educated• Training – Highly trained• Skills – Highly skilled• Interests – Specialty• Personality – ?
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WrittenBusinessPlan• Personality – Hard work, perseverance, management skills
• Advice – “It is a tough job to get started and handle the healthcare and the office”
• Advice for new grads – Get experience first
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WrittenBusinessPlan•What are the elements of a business plan?
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision• Business description‐What you will do
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision• Business description‐What you will do• Marketing – How they will know
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision• Business description‐What you will do• Marketing – How they will know• Competition – Who else is doing it
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision• Business description‐What you will do• Marketing – How they will know• Competition – Who else is doing it• Operations – How will it work
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WrittenBusinessPlan•What are the elements of a business plan?
• Executive summary – Vision• Business description‐What you will do• Marketing – How they will know• Competition – Who else is doing it• Operations – How it will work• Financial – How it will make a profit
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WrittenBusinessPlan
• Demographics
• Do the demographics match my specialty and interests?
• Texas State Department of Health Services
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WrittenBusinessPlan
• Should I go solo or have a partner or partners?
• Share the cost• Share the work• Share the profits• Share the risk• Share the blame
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WrittenBusinessPlan• Resources for help with Business Plan:
• Center for Economic Development• SCORE – Service Corps of Retired Executives www.fortworth.score.org• NP business owners
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WrittenBusinessPlan• Do the Research!
• Community needs• Demographics• Insurance Contracts• MD Collaboration• Hospital Privileges• Competition
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Step2Financing
•How much do I need to start my own practice?
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Financing
• Start‐up capital ‐ $30,000 to $100,000
• The more the better
•50% of small businesses fail in first five years (SBA)
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Financing• Personal funds• Friends and relatives• Small Business Association and affiliated agencies• Commercial or community banks•Work while establishing your practice
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Let’sDoIt!
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Step3FormaBusinessEntityWhat is a “business entity” and why do I need to form a one?A corporation treated as a person
Liability purposes
Tax advantages
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FormingaBusinessEntity
• Entity options – Sole proprietor, partnership, corporation or limited liability company (LLC)• I prefer LLC for both liability protection and tax advantages
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FormingaBusinessEntity
• How do I form and LLC?• Texas Secretary of State Form 205• SOSDirect• $300 fee• Operating agreement• Employer identification number (EIN) from IRS
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FormingaBusinessEntity
• Keep business and personal expenses separate
• Business Checking Account
• You are both an employee and employer of the LLC
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BusinessEntityCashFlow
Patient and Insurance PaymentsPatient and Insurance Payments
LLCLLC
Owner’s SalaryOwner’s Salary
Owner’s DistributionsOwner’s
Distributions
ExpensesExpenses
Owner’s Profit (K1)Owner’s Profit (K1)
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BusinessEntity‐ Deductions• Expenses associated with your business are deductible and reduce your taxable income
• The IRS says expenses are deductible if they are “ordinary and necessary”
• Some expenses are deductible as business expenses that are not as personal expenses
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BusinessEntity‐ Deductions
• Start up costs can be amortized – deducted over a period of time
• Keep good records and enlist the help of a CPA
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BusinessEntity– TaxesPaid• Federal• Social Security• Employee 6.2%• Employer 6.2%
•Medicare• Employee 1.45%• Employer 1.45%
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BusinessEntityCashFlow
Patient and Insurance PaymentsPatient and Insurance Payments
LLCLLC
Owner’s SalaryOwner’s Salary
Owner’s DistributionsOwner’s
Distributions
ExpensesExpenses
Owner’s Profit (K1)Owner’s Profit (K1)
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WhatisthemostimportantthingIneedtoestablishmyownNPpractice?
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WhatisthemostimportantthingIneedtoestablishmyownNPpractice?
Paying Patients!
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Step4Marketing
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Marketing• Determine the image you want to present. Image considerations are part of all your practice decisions.
• Nurture professional relationships as these are sources of referral for your practice.
• Most start‐ups don’t budget enough for marketing
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Marketing• Webpage ‐ Necessity• Social Media• Postcards• Phonebook• Newspaper• Home Health Agencies• Hospital healthcare providers directory• Networking• Community involvement
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Marketing• Start marketing now
• Focus on a specific market
• Evaluate the effectiveness of your marketing
• What is the return on investment (ROI) of your marketing efforts?
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Step5EstablishandManageYourPractice
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Management‐ LicensingandCertification• State nursing license and advanced practice license/certification
• National provider identifier (NPI): a unique identification number given to each healthcare provider (https://nppes.cms.hhs.gov)
• Medicaid provider number (www.tmhp.com)• Medicare provider number (www.cms.gov)• Clinical laboratory license: CMS regulates all laboratory testing performed through the Clinical Laboratory Improvement Amendments (CLIA).
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Management– OfficeandEquipment
• Office Space• Utilities• Medical Equipment ‐ Buy basic, lease high‐tech• Computers• Credit Card• Furniture• Kitchen• Office Supplies
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Management‐ Software
• AdvancedMD• Athenahealth• Cloud‐based
• Scheduling• Medical recordkeeping• Billing
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Management‐ Insurance
• Liability (Malpractice)• Health • Disability• Commercial insurance:• Equipment insurance • Equipment malpractice insurance• General liability coverage• Worker's compensation insurance.
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Management‐ Staffing• Job Descriptions and Policy and Procedure Manual
• Staffing • Med Assistants• Receptionist• Biller ‐ Outsource?• Office Manager
• Payroll – Outsource?
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Management‐ Billing• Healthcare billing is complex and requires someone with experience
• Billing can be accomplished through medical management software
• Challenge ‐monitoring of claims submitted, tracking payments received, and resubmitting denied claims.
• Consider a billing service
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Management‐ Taxes• As the owner, you must make sure that tax payments are made monthly and quarterly and necessary tax returns filed.
• Federal • Social Security – Both employee and employer• Medicare• Franchise
• Employ a CPA or payroll service (Quickbooks)
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Money
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Money
•Start up can be stressful
•Your first goal
•Break‐even
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APositiveNote
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Money– ExamplePractice• 1 NP with 5 employees• Established practice
• 9,500 patient visits per year• Gross Billing $1.3 million• Gross Revenues $775,000• Expenses $540,000• $235,000 income to NP
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Money– ExamplePractice• Advice from this NP – “Rule of thumb – 1 employee for every exam room and 10 patients per employee per day”
• 10 patients per exam room per day
• 4 exam rooms
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Money– EquityOwnership
• As you grow your business, it becomes more valuable and can be sold when you retire.
• Succession or exit plan – You sell your business over time to another NP and help your patients transition to the new NP.
• Sale can be a flat fee or tied to the number of patients who transition.
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Money– RetirementPlanning
• Business owners have the opportunity to defer more from taxation than W‐2 employees
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Money– RetirementPlanning
• SIMPLE IRA $12,500/yr• Solo 401(k) $53,000/yr• New Comparability Plan $70,000/yr• Defined Benefit Plan $100,000+/yr
• Must also contribute to employees retirement accounts, but owner can receive the lion’s share
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Summary
•Begin with the Big Picture – Business Plan•Obtain enough business capital• Form an entity such as LLC•Market and build relationships•Consult and outsource as needed• Enjoy success!
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