How much does it cost to start a medical practice?

Answer 1

2015 update: PCPs now typically earn more than $200,000 per year. Many specialists can start practices for under $100,000, with 100% bank financing or hospital subsidies available. Expert startup consultants that have started hundreds of practices can be engaged for under $2,500, so beware paying more. It is generally a violation of Federal law, and many state laws, for a consultant to take a percentage of physician earnings as a fee or have fees contingent on profitability ("fee splitting" laws). Check with a specialist medical practice attorney before you pay a "contingency fee".

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This question is extremely difficult to answer without detailed information from the proposed practitioner. That said, there are fixed costs that nearly all practitioners will face. The best way to determine costs is to hire a qualified medical practice consultant. They should charge $3,000 to $8,000 to do a proper survey and financial plan for your practice. Do not skimp on quality advising. Small errors can incur big losses. The average primary care, non-surgical physician earns less than $140,000 per year. Those physicians spent an average of just under $100,000 to start their practice. Some primary care, non-surgical physician earns more than $300,000 per year. The cost to start a practice with that kind of earning potential is between $200,000 and $300,000. It sounds like a lot more but when you consider the greater income; you make up the difference in several months to less than 2 years.

Make sure you find a turnkey consultant. Make sure their main interest is your financial success not their selling you other ongoing services such as billing, coding, management, etc. They should offer a guarantee of performance and much of their fees are obtained only after your practice becomes profitable from meeting goals. All fees up front give them no incentive to make you successful. Finally, the best consulting firms use a minimum of MBA's or better yet PhD's or doctors who had highly profitable practices themselves. Do not be fooled, these consultants are uncommon but they are out there and it is worth the time to find them.