Starting a healthcare practice

10 factors to consider before establishing a healthcare practice.

Even if you have student debt, don’t give up on your dream of starting your own medical practice or dental practice.

One of the biggest obstacles that holds physicians and dentists back from starting their own practice is simply because they think it’s out of reach.

General physicians and dentists are coming out of school with extremely high levels of student debt. The average student loan debt for physicians is more than $200,000, and dentists are now averaging close to $300,000.

“Most believe that because of this student loan debt, they’re not able to obtain financing to start a practice,” says John Cotton, senior vice president, Regional Healthcare Executive, East Region, at U.S. Bank. “So, the first step is getting past the misconception that their student loan debt will hold them back.”

Another big hurdle is fear. “Many are afraid to step out of their comfort zone,” adds Gary Dudzik, senior vice president, Regional Healthcare Executive, California Region, at U.S. Bank. “It’s called the comfort zone for a reason. It’s safe, and all your needs are covered. However, the comfort zone is not where personal or professional growth happens.”

Healthcare professionals can realistically start their own practice. In fact, there are more than 330,000 currently active physician group practices across the U.S. as of January 2025, according to data from Definitive Healthcare. Nearly 70% of all dentists have an ownership stake in their practice, according to the American Dental Association.

Steps to starting your own healthcare practice

If you’re thinking of starting a private practice, whether it’s a medical or dental practice, consider these 10 tips for laying the groundwork to start your own practice and set yourself up for success.

1. Develop your clinical skillset

After you graduate and begin practicing or associating, capitalize on the opportunity to fine-tune your clinical skillset and increase efficiency and effectiveness. Use this time to develop mentor relationships with current successful business owners.

2. Set a clear goal for your healthcare practice

Start by identifying the type of healthcare practice that you want to establish, the area of specialization you intend to focus on and the patient population that you aim to serve.

“From a financial aspect, make sure that you're incorporating your short-term or long-term plan of practice ownership into some of the larger financial decisions that you're making,” says Cotton.

As you’re considering buying a car or home, or making other big purchases, keep your goal of practice ownership in mind.

3. Build a strong healthcare practice team

It’s never too early to start building a team of people who can provide guidance and help make your dream of owning your own practice a reality. This team should include professionals such as an accountant, a healthcare banker, a financial advisor and an attorney.

“Have experts around you to make the business more efficient and more effective,” says Joe Persichetti, senior vice president, Head of Healthcare Business Banking at U.S. Bank. “You can save yourself money or make more money by having people [who] know what they're doing to assist you in your practice.”

4. Manage your personal debt

Work with a healthcare banker to review your personal loans and student debt to make sure that you’re on the right financial path. For instance, you may be able to afford a 15-year mortgage, but it may be prudent to choose a 30-year mortgage instead, which will give you more cash flow when it comes time to start a practice.

Make sure you have sufficient flexibility in your loan payments and that cash flow for your practice is adequate to maintain payments for student loans, personal loans and your business loan.

5. Weigh the pros and cons of buying a practice vs. building one

Both buying an existing practice and building your own practice can produce successful results. Some key differences to consider when deciding between buying an existing practice or starting a practice from scratch include weighing the pros and cons of factors including:

• Determining whether the legacy equipment and processes are a good fit versus choosing equipment and systems that align with your goals
• The ability to mesh with an existing staff versus picking your own team

6. Develop a business plan for your healthcare practice

The first step in writing a business plan for your healthcare practice starts with outlining a vision of what you want your practice to be. Then, you should work backwards to identify the steps and processes needed to achieve that vision.

“Think of it as starting from the 30,000-foot view and zooming in until you can no longer zoom in any further,” Dudzik says. “This allows you to be specific about the milestones and goals you need to achieve to attain your vision, as well as to hold yourself accountable along the process.”

A good way to do this is to work with an experienced healthcare consultant. Having someone who can help you develop your vision and who has a proven track record will create a much smoother journey. A good consultant will help identify roadblocks and share lessons learned from others that will increase your odds of success and help alleviate start-up stress.

7. Budget for healthcare practice startup costs

Starting your own healthcare practice comes with a lengthy list of costs, including obvious ones such as real estate, equipment, insurance, staffing and marketing.

Some costs that often get overlooked include items such as IT infrastructure and professional fees. Other often-overlooked costs are merchant services, such as a credit card processor to accept co-pays at the time of service. “When you’re working with someone who has done this multiple times, they can help you make an exhaustive list of everything needed in the process and help identify your blind spots,” says Dudzik.

Ensure you establish a routine of assessing your finances frequently throughout your practice’s lifecycle.

8. Secure funding for your healthcare practice

Work with a healthcare-specific lender who has a good understanding of your practice needs and can offer competitive rates, along with specific programs and services for a healthcare practice, such as digital payment solutions that are HIPAA compliant.

You can never start too early. Having conversations with your lender can help identify potential issues a credit team may have with your profile. The earlier you identify these gaps, the easier it is to take corrective action.

Choose a lender that offers a comprehensive line of services to complement your practice. When you are working with one bank across several product lines, they can ensure the products are integrating and working together properly.

Learn about U.S. Bank’s healthcare lending solutions.

9. Leverage payment and other technology

Technology can streamline the in-practice payment process, allowing payments to be collected faster and create more efficiency for office staff who are spending time and resources trying to collect payments. Understanding the technology and AI opportunities that are available, specifically for healthcare, can improve efficiency and profitability.

Your electronic health record (EHR) software is another huge consideration. If you plan to be the sole physician or dentist, look for a HIPAA-compliant EHR that’s built for small practices but can be scaled as you grow. You will also need to choose between a cloud-based EHR, which is hosted and maintained remotely, and a server-based EHR, which requires you to host the server on your practice premises.

10. Think longer term for your healthcare practice

Sometimes, physicians or dentists are so laser-focused on getting their practice up and running that they don’t consider how the decisions they make today will affect them tomorrow. Setting up efficient processes from the beginning and adapting to new technologies on an ongoing basis can help drive profitability and growth.