Dermatology is one of the best medical specialties suited for private practice. This field is constantly growing and at a quick pace. It is actually projected to maintain a steady growth rate over the next several years. The rise in demand for a dermatologist has been fueled by the increasing occurrence of skin cancer coupled in addition to an aging population that is looking for cosmetic interventions. Because of these trends, the market is expected to reach well over $13.1 million.
Due to their rising popularity and necessity, dermatology practices have the potential to be highly profitable. However, this requires careful planning in order to ensure success. As a physician owner you must make sure that you are taking into account the overhead costs that are associated with operating the business. You will then need to off-set those costs with organized, deliberate action in order to generate a sustainable revenue. The days of just opening the doors to your new practice are gone.
If you are considering going into private practice, then the following tips are an important part of the process:
1. Decide what range of services you want to offer:
Focusing on general Dermatology will be your bread and butter when it comes to private practice. This will be a key factor when it comes to building your patient base, however procedures will generate the most revenue. Having a practice that offers a range of dermatology services is your best way to ensure financial viability. Procedures tend have the highest reimbursement rates. You will also want to make sure that your referral base can generate opportunities to perform future procedures. You also might want to consider aesthetics services as they can be a big draw in certain markets. Aesthetics services are performed on a cash or concierge basis. This prevents your practice from being wholly dependent on reimbursements from insurance companies.
2. Evaluate the local market:
It is very important to have an understanding of your future market. This is not just important when you start a new business but especially in private medical practice. You will need to know about the population/ area you are planning to serve as well as the competitive landscape. You will want to find out the population demographics in this area. Is there a local multi-specialty group? Look into other practices and find out if there are other dermatologists providing a full range of general and surgical procedures? It is a good idea to have a healthcare consultant to assist you by performing a market analysis of your area. This should include a detailed competitor and referral analysis.
3. Consider the Benefits of bringing on a Physician Extender:
While deciding to bring on a Physician Assistant or Nurse Practitioner (as well as the additional staff required to support another provider) will increase staffing costs, it will also increase revenue. If you are considering adding on a physician extender to your practice, then it will be important to draw up a detailed cash-flow analysis. This will be an important decision-making tool for you and your practice. Hiring a consultant can also be an asset to you as they will help you analyze the financial implications of adding additional providers to your practice. They will also help you develop a plan to maximize your revenue and minimize costs.
4. Be realistic on the Growth Plan:
Day 1 might not me the time to add on another provider to the practice especially when you are still ramping up your patient population and drawing off of working capital. However it might make more sense for you to plan on adding a PA or NP in 6-12 months. Something else to consider is what equipment and services to offer at the beginning. While you might be planning on incorporating a full range of aesthetic services to your practice, this might not be the best decision to purchase an array of lasers and light boxes before you see your very first patient.
These are just a few factors and suggestions that you should consider when opening your private dermatology practice. Even though this specialty can yield high profit margins for physician owners, it still takes careful planning and consideration in order to grow your business successfully and to its full revenue potential. If you’re ready to learn more about how to position your new or existing dermatology practice for success, Practice Advisors can help.
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Now that you have read some basic tips and things to consider you are ready to purchase a practice. After you have found a place that meets your needs you will still need to make on offer, secure financing, sign the practice sale agreement and lease, and complete the purchase. As you can see a lot of important factors go into this decision. Make sure you are being properly advised. Practice Advisors 360 is the nation’s leading dental advisory company. Contact us today at (844) 360-8360 or visit us online at practiceadvisors360.com