How to Start an Outpatient Pain Practice

November 2019 Issue

  1. Nirmala Abraham, MD Pain Management, Kettering Physician Network Author


We have entered an era of medicine where business sense is just as important as anatomy and physiology knowledge. An area in which it is especially needed is starting up an outpatient pain practice. Whether as an independent private group, or part of an employed model at a hospital system, a practice must have a solid business foundation. This article provides a high-level overview for how to build a strong outpatient pain practice.


Whether as an independent private group or part of an employed model at a hospital system, a practice must have a solid business foundation.


Business Plan

Creating a business plan is imperative to making sure all the important aspects of starting a pain practice are being considered. Most doctors struggle with this, whether because of a lack of knowledge, interest, or resources. A business plan establishes your practice’s goals, and outlines your plans to achieve them. It also helps to establish a timeline for growth. Including milestones at the one-, five-, and 10-year marks will help with the long-term vision of the practice.

The first step is to create a mission statement to guide the program’s development. It can be as simple or complex as you would like it to be. You also must define your product, which, for a medical practice, involves determining the starting scope of your clinical practice (e.g. type of patients you want to see, conditions you would like to treat). If you are not familiar with the business side of medicine, seek input from outside resources such as clinic managers, financial analysts, and billing specialists.

Needs Analysis

The initial step in building a practice from an operational standpoint is determining the needs in the area in which you are hoping to start a practice. Find out how many pain practices currently exist within a reasonable driving distance, the top insurance payors in the area, potential referral sources, and other community medical resources and programs. Some physicians prefer going to an area with little competition, whereas others find a way to carve out market share in an area that already has a significant presence. Also, consider whether you will provide alternative treatment options compared to your competition. You may want to consult local medical device representatives to see what treatment options other physicians offer.

An additional early step is determining whether to have a privately owned practice, or build a practice in a healthcare system. The two options have significant differences (see Table 1), so find the best fit for you before choosing a path.

Table 1. Considerations for creating a private practice versus hospital- or system-based practice.

 

Independent Private Practice

Hospital- or System-Based Practice

Location

Self-owned or leased property

Usually a hospital-owned space that is either freestanding or within hospital

Scope of practice

  • Outpatient clinic and interventional only
  • Inpatient consults: If the hospital system desires inpatient consults, a separate plan should be developed.
  • Must have commitments of clinical and financial support from the hospital administration prior to creating a program

Procedure suite

In-office fluoroscopy suite versus ambulatory surgery center licensed space

Ambulatory surgery center versus hospital procedure suite versus operating room

Staffing

  • Office/Clerical: business or practice manager, front desk, in-house billing and coding (or outsourced)
  • Clinical:
    • MA/support
    • Mid-levels
      • State board guidelines for scope of practice: physician assistant versus advanced practice nurse
      • Set clear and specific job roles and expectations.
      • Clarify opportunities for incident-to billing.
    • Nurses and techs if interventional procedures are done in office

Various models are used; have a clear understanding with administrators for how this will be done.

  • Office/Clerical: business or practice manager (may be offsite or cover multiple practices), front desk, centralized billing department
  • Clinical:
    • Medical assistant or other clinical support staff
    • Mid-levels
      • State board guidelines for scope of practice: Physician assistant vs. Advanced practice nurse
      • Set clear and specific job roles and expectations.
      • Clarify opportunities for incident-to billing.

Overhead costs

  • Rent and utilities
  • Salaries and benefits
  • Administrative and clinical supplies

Built into budget for hospital department

  • Rent and utilities
  • Salaries and benefits
  • Administrative and clinical supplies

 

Marketing Strategies

Make a plan to get the word out about your practice to the right audience. Your scope of practice and the needs you are attempting to meet will help you define your audience. Strategies include direct marketing to patients through educational programs at community centers, flyers, and ads, or marketing to physicians by setting up appointments to meet with them and discuss what you have to offer. Pain management practices can offer many variations, so you need a clear plan of what services you will offer your referral base and patients.

Pitfalls

A practice may not perform as expected for many internal and external reasons. The most common cause of struggle is a lack of understanding of business principles and finances.

From a management standpoint, the most overlooked component is not having clearly delineated job descriptions and performance expectations for the clinical and administrative staff; however, this is easier to manage with a privately owned practice. It becomes more difficult with additional layers of hospital administration that control budget and staffing decisions. It can also complicate matters if the practice expectations are not clearly communicated, or the administration changes them without direct involvement of the clinical team. Having regular meetings with the administrative sponsor for your program will help to decrease the impact that changing hospital system expectations and needs have on your practice performance.

Conclusion

Most physicians do not have a background in business, so you may wish to hire a business development advisor to help create the right plan for you when starting an independent practice. Most hospital systems will have a business development department to assist with practice startup.

A strong plan does not guarantee success, but it goes a long way toward ensuring that you are prepared for the inevitable challenges of medical practice.