4 Common Urgent Care Startup Misconceptions

With the increasing interest in starting a new urgent care center, there seems to be a demand for information on the HOW TO of getting a new business up and running. Unfortunately, finding a byline on a business page or a short article in a medical magazine doesn’t necessarily mean you will always receive the most reliable information to help you get started.

Here are 4 Common Startup MISCONCEPTIONS we have recently come across.

So in an effort to put our ™ on these typical startup fallacies, here are 4 Common Startup Misconceptions Defined.

1. All I need is a business plan to begin my search for funding. The proof is in the numbers! Yes, you a business plan is very much necessary to begin your search for funding, however, many people use the term without clearly understanding what it is. A business plan is a written document that explains your overall goal and how you plan to obtain it. This document will include such details as your demographics, competition factors, services and products offered, marketing plans and much more.

However, what most overlook is the fact that any financial lender or angel investor you speak with isn’t going to invest in your ideas, they’re going to invest in your financial potential. So in addition to your business plan, you will also need a pro forma. A pro forma is a document that dictates all areas of your financial needs and projects. This includes your capital costs, projected patient counts, average reimbursements, staffing models and expected salaries, cash flow, and much more. In addition, the pro forma will generally have your projected financials line-itemed for the first 3-5 years.

A pro forma and a business plan are complimentary documents but they offer very different pieces of information. It is important to know which information is pertinent to which document and approach potential investors with complete knowledge of your overall startup venture. These two documents combined will show your true potential for startup success.

2. I’ll open my clinic as cash-only payment and the insurance companies will follow. Not the case! Not only is this not true on the insurance company side but it can also be a PR nightmare to open your doors in which your patients with insurance are out-of network. In the patients minds’ once out-of-network, always out-of-network’. Your front desk teams will be overwhelmed with patients calling with questions on their EOBs and the clinic will most likely have to write-off a large portion of unpaid bills. Plus, you will lose the positive word-of-mouth marketing that startup urgent cares benefit from.

The important thing with payors is to have a realistic timeline and understand what the process entails. This process begins with contracting and credentialing. These words are not interchangeable as they pertain to very different pieces of the puzzle. Credentialing is the process of verifying your practitioners are licensed in the appropriate manors to the appropriate state, while contracting is the process in which you request to be in-network and negotiate reimbursement with the payors.

In most cases this process as a whole, averages a 6-9 month period and can occasionally exceed even that timeframe. There are many caveats to this process. Knowing the when, how and what of the contracting and credentialing process is vital to the success of your clinic. This step is best left to a professional and is well worth the cost.

3. I plan to have a busy clinic, so I plan on a large clinic. Bigger isn’t better just more expensive to build. In the early stages of the urgent care industry we were seeing clinics opening at an average of 5,000-8,000 square feet. And what we determined is it was mostly wasted space and an unjustified cost. At the time, architects just weren’t familiar enough with the clinical aspect of urgent care needs and the need for efficiency. Clinics today are now seeing a higher patient volume in an average clinic size of only 2,500-3,500 square feet. The key here is in the floor plan design.

Consider these tips during your design phase:

  • Meet all required compliance standards
  • Minimize unused space
  • Follow a realistic service flow
  • Allow for a high volume patient flow by centralizing key pieces of everyday services

And remember, the real key isn’t how large you build your clinic but how effectively you move patients through.

4. I’m not a practitioner so I can’t open in my preferred state. There’s more than one way to skin a cat. In most cases, even the states that exercise Corporate Practice of Medicine, a non physician can own an urgent care center. As a non physician there will be more red tape and the corporate structure will dictate your involvement, but it is attainable with the right planning and legal involvement. The push back for non physician owners we’re seeing right now is not so much at the state level, but more at the payor level. To date, insurance companies are not a governed industry which means they can alter their rules and negotiations at any time for any reason. The current payor trend is insurance companies requiring the clinic to have an active physician trained in emergency medicine. This adds a level of comfort to the payors that the clinic can-in most cases- be prepared for any case that comes through the doors.

This is not true in all areas by all payors but is a common trend at the moment and should be considered in selecting your staffing team.

The thing to remember here is do your own research. Do not read an article and accept it as truth. There are many areas of opportunity to gain accurate industry knowledge. You can attend urgent care conferences, network with industry professionals or engage an urgent care consultant. Research the items you do not fully understand so you can begin your venture with factual information and realistic expectations and to help ensure your urgent care center is successful.