Growing a healthcare practice

6 actionable tips to grow your medical practice

All small business owners face challenges in creating a business that can not only survive but also thrive and grow. In fact, one in five small businesses fail within the first year, and about half fail within five years, according to the Bureau of Labor Statistics.

Physicians and dentists face the same practical hurdles as any business owner when it comes to tasks: managing financials, operating efficiently, marketing and customer service. Learning how to grow a medical practice means balancing all of that while still focusing on their primary job of delivering quality care to patients.

That’s why it’s important for medical physicians and dentists to create a strong roadmap to navigate challenges and successfully scale their practice.

Once your practice is established and you’re ready to move into a growth stage, you can choose from several paths, such as acquiring another practice, growing organically by expanding your patient base, or adding new services or procedures.

The first important step: Start with a strong vision or a business plan of where you want to be in one year, three years and five years.

“Having a clear vision of what you're trying to achieve is the number one most critical thing,” says Anne Lucas, National PracticeFinance Director at U.S. Bank.

Tips for healthcare practice growth

As your focus shifts from starting to scaling a practice, here are six practical steps to help accomplish your growth goals while maintaining patient satisfaction.

1. Use your business plan as a guide for practice growth.

An important step for any start-up is developing a business plan, and practice owners can lean on that business plan after the start-up stage to guide their growth. Continue to review and update that plan periodically, such as quarterly or annually, to account for growth or market changes.

Ask yourself:

• How are you doing financially and operationally?
• Where are there gaps or shortfalls?
• How are you performing in attracting and retaining patients?
• What areas need improvement to help you reach your growth goals?
• On a deeper annual review, do you need to adjust goals or change your plan?

Learn how to create a business plan.

2. Build a strong practice team.

Business owners wear many hats, but it’s important to build a strong team around you that includes both internal staff and external advisors.

Your internal team can handle day-to-day operations so that you can focus on delivering care and overseeing strategic, visionary planning.

Your external team should include a healthcare banker, a financial advisor, an accountant and an attorney who can help you stay focused on your growth trajectory and offer practical guidance to help achieve your goals.

Be selective in assembling a team of advisors with expertise in healthcare and a strong understanding of the nuances of your industry.

“The theme that we talk about with our clients in the healthcare sector is to surround yourself with the right team, including your bank, that understands you to make sure that you're truly set up for success the right way, whether you buy, start or associate a practice,” says Joe Persichetti, senior vice president, Head of Healthcare Business Banking at U.S. Bank.

3. Look for ways to improve operational efficiency in your practice.

Even small changes can deliver big savings in time, money and resources that can have a positive impact on profitability.

For example, say that a paper mail statement in the U.S. costs an average of $4.64 when accounting for postage, paper products and labor. For a practitioner who sees 500 patients a month, that can add up to more than $27,000 per year. While this operational cost will vary by practice size and mailing method, it’s one that can be eliminated entirely by using a digital processing solution, such as codes and text-to-pay options.

“Offering digital payment solutions not only reduces operating costs but also adds value to patient relationships by offering more convenient and seamless ways to interact with customers for payments, scheduling appointments, filling out forms online and sending automated reminders,” says Natalie Wright, Head of Business Operators and Healthcare for Merchant Payment Services and Consumer and Business Banking, at U.S. Bank.

Find more ideas for increasing your business’s efficiency.

4. Develop a good payment processing system for your practice.

A common mistake many practice owners make is to overlook day-to-day financial operations in favor of the start-up phase and getting their doors open. A practice owner looking to grow needs to have conversations about the revenue cycle: how they’re going to collect payments and the timing of those payments.

Implementing digital payments saves time and money in the long run and will help in growing the medical practice. Ask yourself:

• Are you accepting payments according to patient preference, such as credit cards, touchless payments or cash?
• Do you have advanced payment programs where patients have the option to finance their care?
• If you have a customer base that isreliant on cash, how are you going to handle large cash balances?

5. Practice good financial management of your practice.

Medical and dental practitioners who might already have hundreds of thousands of dollars in student loans, a mortgage and an existing business loan may be hesitant to take on more debt to expand an existing practice or buy an additional practice.

“It’s important to talk with your banker well before you're ready to make the move to expand,” says Lucas, “so they can help you understand what may need to change before you [are] eligible for a loan.”

If you’re a dentist, be sure to also discuss these additional common financial mistakes you could make.

6. Don’t forget about work-life balance.

Physicians and dentists are putting more emphasis on maintaining a healthy work-life balance. “One of the keys to establishing a good work-life balance is self-reflection, because everyone is different and has a unique view of work-life priorities,” says Persichetti.

• Figure out what work-life balance means to you based on your lifestyle, values and personal and professional goals.
• Trust in the team of people around you and be willing to delegate work and responsibilities to help maintain that balance.
• Conduct a health check-in on your work-life balance periodically to make sure you are on track and to make necessary course adjustments.

Search out good advice for healthcare practice growth.

As you embark on the growth stage of practice ownership, it's important to work with a specialized healthcare banker who understands your financial needs throughout your practice’s life cycle – starting it, expanding it and eventually starting the exit strategy for retirement. At U.S. Bank, specialized healthcare bankers know the ins and outs of the industry and can help you navigate and optimize each of those stages in a way that supports both your professional and personal goals.

A final piece of advice: Don’t be scared of change or taking on a new solution or process, adds Wright. “At U.S. Bank, you have a team of healthcare specialists in banking and payments that are here to support you, that see that goal and want that goal for you,” she says. “We work alongside our clients to help them with that implementation process, because we want to see them grow. Their growth is our success as well.”

Connect with a practice financing banker.