Here's how you can smoothly transition from a hospital setting to a private practice in healthcare.

The first thing is look to see if there is already an existing private practice in your market you could join. They will have everything set up for you. In the absence of an existing practice, you should obtain an understanding of your existing payer mix. The wRVU compensation systems inside hospital employment has physicians ignoring payer mix. You may find out your payer mix is mostly adverse (Medicare, Medicaid, self-pay etc.) and short on the commercial market (United, Anthem, etc.). This will make the start-up challenging. Next, hire a strong CEO and COO to operationalize your start up. Then engage the payers in contract negotiations because you need to understand what your revenue stream will be. This will get you started.

Certainly, you need to devote thinking to the financial aspects of your potential new practice. However, the notion that you need a "business plan" is overblown and potentially dangerous. I challenge you to find a business plan that failed on paper. Although it shows that you thought about how the future might play out, if you're not careful, giving it to a bank can be evidence of bank fraud. I know that everyone who sells business plans or only read about them in school tells you otherwise. So if you're going follow their advice, create the plan but lock it in a drawer. If, later, a banker asks for it, you're free to use my line about business plans never reflecting reality, and tell them that you detest bank fraud. They'll love you.

Some thoughts. 1. Assess your financial resources and your insurance coverages for all partners. 2. Be certain of the patient demographics and payer mix. 3. What payers will you contract with in your new practice? Does your hospital partner mandate and and/or require contracting with any or all of these payers? 4. Who will be your revenue cycle partner? Do they have a compliance program? Are they HITRUST certified? Will they provide you with a financial projection for your start-up? Can they provide you with practice management, i.e. administrative support as you transition or even permanently? 5. How will you be structuring the practice and how many partners? Will you have advanced practice providers, i.e. NPs and/or PAs?

Assuming you have cleared any issues relevant to a non-compete, you will need a strong healthcare attorney with expertise in physician private practices. This is a niche area. They will provide what you need for legal structure (include your CPA in this discussion), all licenses, insurance requirements, federal and state filings, etc. Again, hiring a CEO or Practice Administrator to lead this effort is critical. This person should also have experience inside a private practice. Preferably experience in your specialty.

Understanding the legal landscape doesn't start with those aspects relevant to the new venture. Instead, it starts with understanding your current position. What potential legal landmines already exist pursuant to the agreements in place with your current employer? For example, are there restrictive covenants in your present agreement? Is a component of your compensation, a bonus for example, tied to employment as of some date in the future? Did you neglect to address potential patient abandonment issues when you negotiated your current agreement and how will you handle that? You need to understand your starting point as well as your destination.

My first physician employer “schooled” me about what it takes to build referral relationships. I’ve never forgotten those lessons. Face to face interaction is step one. Be sure your referral sources know you and believe that you are the best choice for their patients. Step two, give them prompt responses with answers to their questions about next steps. They need your advice and counsel, as soon as possible. Don’t forget that hospitalists are compensated on the basis of making timely and appropriate discharge decisions p.

If you are going solo or establishing a small group practice, realize that you do not need to create your own billing and collecting enterprise along with your medical practice. Focus on building the practice and contract with a reputable billing company. Learn or look for outside expertise in Coding. Set-up common-sense protections, i.e. use a bank lockbox for collections, balance the checking account monthly, watch your monthly reports, etc.