How Much Can I Expect To Make?
One of the main concerns I had prior to opening my own clinic was: How much money can I expect to make? Prior to going into solo practice, I worked at an urgent care center in Utah and made a pretty decent wage. It was comfortable to know that just by showing up to work, I would make my same hourly wage whether any patients came in or not.
When you are in solo practice, if there are no patients, you don't get paid. When I opened my clinic I new how much money I wanted to make, but had no idea how to take in that amount. I have come to realize that I need to see more patients than I initially figured to match my previous wages. To figure your expected income, try answering these basic questions:
- What are my market demographics?
- What is my patient population?
- How much reimbursement should I expect from each patient.
- What are my costs?
Market Demographics
Determine where you want your clinic. Figure out how many potential patients live in the area (city census), then find out how many providers already are practicing in the area. This will give you an idea if the market is saturated with providers or if there is enough of a patient base for your clinic.
Patient Population
Will your clinic be in an area where most patients are insured or uninsured? If insured, how many have state or Medicaid insurance? Do other providers in the area accept these insurances? In my area many providers are well established and no longer accept these types of insurances. This is good business for me; however reimbursement is typically not as good.
Reimbursement
What codes will you be billing most often, to what insurances, and how much do you expect to be reimbursed? For example, assume you bill $100 for an established patient visit. A private insurance may reimburse you $70, Medicare $50, and Medicaid $30. If you see 10 patients it would be nice to be paid $1000, but that is generally not the case. If you expect to average 50% private insurance, 25% Medicare, and 25% Medicaid, then for 10 patients you can expect approximately $550 or about $55 per patient. The reimbursement amounts will be different depending on your contract with each insurance.
Costs
Finally, figure out how much you will spend on advertising, supplies, licensing, billing, rent, utilities, staff, etc. I have a very small clinic, so I will use some average numbers to give an idea of general costs. I will base it on 40 hours per week with an expected monthly gross income of $10,000. For a small clinic you might expect rent and utilities $2,500/month, advertising $300/month, one staff member $1,600/month, supplies $1,500/month, and billing or misc. costs $750/month.
Conclusion
If my goal is to make $120,000 per year salary, then the clinic needs to make $832.50 per day (five days a week). This means I need to see 16 to 17 patients every day to make the amount of money I determined would be worth my time. These numbers may vary widely based on your type of clinic, location, etc.
I suggest you do some research in your area to figure your needs prior to opening your clinic. They provide direction for your clinic, a goal to shoot for, and a realistic view of what you may expect when you open your own practice. Good Luck! If you have any questions about your own practice, feel free to post them on the blog.