Medical Practice Business Plan Workbook

Peter D. Lucash

• Publisher: Productivity Press
• Year: 2011
• eBook ISBN: 9781466506329
• Topic: Business
• Subtopic: Management
• Index: Business

How does a medical practice thrive in a business environment where the margin of management error has all but disappeared? Profit margins are being squeezed by declining reimbursement rates, capitation plans, gamesmanship on the part of the payors, and increasing operating costs. Addressing the specific needs of today's medical practice, Medical Pr

THE WORKBOOK II

Chapter 1

Background of the Practice

Writing Guide

I. Questions to Answer

1. What year was the practice founded and by whom?
2. What is the specialty(ies)?
3. Who were the first physician(s) and staff?
4. Tell about significant milestones in the history.
5. Where were the offices? Why did you move or expand?
6. Are there areas of focus, interest, or specialization?

II. Data Sources and Applications

1. Recollections of physicians and staff
2. Minutes of meetings

III. Issues/Problems to Explore

1. Were there significant investments made or risks taken to grow the practice?
2. What were the successes and why?
3. What were the failures and why?

History is a powerful force in an organization. The stories of where an organization came from— why it was founded, the dreams of the founders, the values they held, the purpose for being—are all vital to the culture of the organization today. For the outsider, be it a new employee or a banker considering a loan application, history tells the character of the organization.

In this chapter, you are asked to tell your story. In doing so, focus on milestones. Milestones are significant accomplishments or signal events in the history. Milestones include the opening of the first office, the addition of physicians, the time when you hit your 1,000th active patient, and so on. As you write a short history, keep in mind that you are writing for others to read and to understand what makes your practice what it is today.

Background of the Practice

(History, where/when founded, growth milestones, etc.):

Chapter 2

Forms of Business Organization

1. Questions to Answer
   1. What is the current form of the business organization?
   2. What are the advantages to maintaining this form? What are the disadvantages?
   3. Have you reviewed with counsel the pros and cons of limited liability corporations or partnerships (LLC or LLP)?
   4. Does the current form allow for adding additional physicians and offering partial ownership?
   5. Discuss with your accountant advantages/disadvantages of Subchapter S election.
2. Data Sources and Applications
   1. Business license
   2. Legal papers
   3. Discuss with attorney.
3. Issues/Problems to Explore
   1. Does the current structure and organization offer the ability and flexibility to pursue new business opportunities?
   2. Does it recruit, retain, and reward physicians and other staff?

Forms of Business Organization

The legal form of an organization is the formal structure, be it a sole proprietorship, partnership, or a corporation. The decision as to the legal form is a critical decision that has to do with three issues:

1. Limitation of liability to protect personal assets
2. Number of owners of the company
3. Tax considerations

A sole proprietorship is the simplest form of a business organization. In a sole proprietorship, the owner of the business and the business are one and the same—that is, the business owner cannot be separated from the business. The assets and liabilities of the individual owner and the business are inseparable. If a sole proprietorship wants to operate using a trade name other than the given name of the owner, then the owner must file what is known as a “fictitious name certificate” with the state government. The reason for this is simply to protect the public by ensuring that there is a way to identify the individual who is doing business with the public using a name other than his or her own. Only one person can “own” a sole proprietorship. In that way, proprietorships are formally known as “John Jones d/b/a Lowcountry Doctor” with DBA standing for “doing business as.” This clearly demarcates that the business known as “Lowcountry Doctor” is actually John Jones, who conducts business under the name “Lowcountry Doctor.”

When two or more people get together, they can form a partnership. For legal purposes, the partnership has standing as an independent entity, and can act as a person and sue and be sued. Typically, partnerships must also register with the state government. Unlike a sole proprietorship, there is a differentiation between the “partnership” and the partners. However, there is no limit on the liability of the individual partners for acts or actions of the partnership. As with a proprietorship, creditors and others can access the personal assets of the partners to satisfy debts and judgments.

The third major category is a corporation. Corporations are, in a legal sense, a “person.” As a “person,” corporations are able to buy and sell assets, enter into contracts, and otherwise act as a person would. Corporations also enjoy limited liability in that only the assets of a corporation can be used to satisfy loans and judgments. The individuals who are the owners—known as “stockholders” or “shareholders”—do not bear personal liability. For these reason...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Acknowledgments
• It wouldn't all fit!
• Section I Introduction
• Section II The Workbook
• Section III The Business and Action Plan
• About: Peter D. Lucash
• Index