5 Critical Steps Before Starting Your Healthcare Company

5 Critical Steps Before Starting Your Healthcare Company

During a recent therapy session, I had an interesting revelation while discussing a new venture.

When I mentioned how healthcare companies can lose substantial money during startup, my therapist’s dramatic reaction confirmed I was not alone in recognizing this issue.

Let me share five crucial things you need to know to avoid the costly mistakes I frequently witness in healthcare startups.

What is the game?

You need two fundamental elements to start a healthcare company:

  • A license to provide care
  • A business model

Who grants your license can vary significantly.

I strongly recommend conducting thorough research before pursuing any particular path.

How to Enter?

There are three main ways to obtain a healthcare license:

  • Buy an existing healthcare business (with license)
  • Buy an existing healthcare license (without business)
  • Start from scratch

Each approach comes with its own advantages and disadvantages.

There is no universal solution that works for everyone.

Deciding

When buying an existing operation, you inherit three key elements:

  • A team
  • A brand
  • Liability

This inheritance can be either beneficial or extremely problematic.

Starting from scratch allows you to build exactly according to your vision.

However, this control comes with significant time and monetary costs.

Liability

Payment recovery through audits is common among most payers, unless you operate on a cash-only basis.

Medicare non-compliance can result in account levies.

Poor documentation or lack of authorization can lead to payment denials.

Investment

Those attractive return models and profitability calculations you have created look promising.

Here is my professional advice: Take your budget and timeline, then double both.

I will share a personal example:

  • Projected time to collections: 180 days
  • Actual time to collections: 301 days

Conclusion

Healthcare can be both rewarding work and an excellent investment opportunity.

However, insufficient understanding can lead to significant challenges.

Investing time and resources in proper planning now will save you considerable heartache in the future.

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