NP Practice Management Basics<br />Daniel James Scott, MS, MBA<br />CTBC, CBA, CRC, CGBP, CMQ/OE, CQPA<br />
Industry Analysis<br />
Tom Peters<br />Author, In Search of Excellence and The Circle of Innovation<br />“We spend over $2 trillion on healthcare...
Sandy Lutz, Woodrin Grossman & John Bigalke<br />From Med Inc.<br />“America has twice as many hospitals and physicians as...
PCP Concentration<br />FL = #4 in US for Population<br />FL = #4 in US for Physicians<br />PCP&apos;s = 36% of doctors in ...
PCP Concentration<br />6.1% of US population located in FL<br />5.6% of US PCP&apos;s are located in FL<br />FL Population...
PCP Concentration<br />Excess specialist physicians in FL?<br />215<br />Real Current PCP Shortage<br />&lt; 1,500<br />Wh...
Dr. Elliott Fisher<br />Center of Evaluative Clinical Sciences<br />Dartmouth Medical School<br />“If we sent 30 percent o...
PCP Concentration<br />1:780<br />US<br />1:1,176<br />5 miles from USF Health South Tampa<br />1:843<br />FL<br />1:749<b...
Don Berwick<br />Harvard Medical School<br />“We’re in the Internet age, and the average patient can’t email their doctor....
NP & Physician Offices<br />Moderate seasonality (possible short-term cash flow shortages)<br />Commonly borrow long-term ...
NP vs. Physician Offices<br />Growth industry vs. mature<br />Smaller offices (revenue and employees)<br />Greater industr...
Recap<br />Opportunities are defined by geographic ‘pockets’ – not US or state averages<br />Getting started is cash inten...
Viability Analysis<br />
Requirements<br />A well-defined concept<br />A reasonable financial goal<br />A localized target market<br />A comparable...
Finding Relevant Information<br />My own experience<br />My peers and mentors<br />My competition<br />My trade associatio...
Measures of Viability<br />Against experience<br />Against reason<br />Against averages<br />Against market data<br />Agai...
Getting Started<br />How do you generate volume?<br />Long-term care?  Single-visit care?  Concierge or corporate services...
Parting Thoughts<br />What is the base level of service vs. competitive advantage?<br />Avoid terms like value, service, q...
Business Plan<br />
Validation Tool<br />Unknown<br />“If you fail to plan, you plan to fail.”<br />
Planning Tool<br />Dwight D. Eisenhower<br />“Plans are nothing; planning is everything.”<br />
Communications Tool<br />George Burns<br />“Define your business goals clearly so that others can see them as you do.”<br />
Motivational Tool<br />Leonard Bernstein<br />“To achieve great things, two things are needed; a plan, and not quite enoug...
Execution Tool<br />Peter Drucker<br />“Plans are only good intentions unless they immediately degenerate into hard work.”...
Ten Q’s – The First Five<br />Who buys and why?<br />Why from you?<br />Roadblocks?<br />Why will Management succeed?<br /...
Ten Q’s – The Final Five<br />Assets and People required?<br />Required return?<br />Exit strategy?<br />Funding requireme...
Starting A Practice<br />Legal Entities,  Agreements and Hiring<br />
Legal Entities<br />Business Names<br />Government Searches<br />Sunbiz.org<br />USPTO.gov<br />Copyright.gov<br />General...
Legal Entities (continued)<br />Sole Proprietorship<br />Partnership<br />Limited Liability Company (LLC)<br />A hybrid fo...
Legal Entities (continued)<br />All legal entities, except sole proprietors operating under their owner&apos;s full legal ...
Legal Entities (continued)<br />It is recommended that all Florida business file for a free EIN number with the IRS. <br /...
Legal Agreements<br />If more than one individual will be involved in the ownership and management of the firm, or if you ...
Legal Hiring<br />To investigate average pay per position, visit http://WhatPeopleAreAsking.com. <br />To learn about curr...
Resources<br />Florida Small Business Development Center Network Healthcare Center of Excellence at the University of Sout...
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Nurse Practitioner Practice Management Basics

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Nurse Practitioner Practice Management Basics presentation to the PhD candidate NPs at USF Health, September 2009.

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Nurse Practitioner Practice Management Basics

  1. 1. NP Practice Management Basics<br />Daniel James Scott, MS, MBA<br />CTBC, CBA, CRC, CGBP, CMQ/OE, CQPA<br />
  2. 2. Industry Analysis<br />
  3. 3. Tom Peters<br />Author, In Search of Excellence and The Circle of Innovation<br />“We spend over $2 trillion on healthcare in America – and it is also our engine of job growth. Increasingly, ‘healthcare economics’ are ‘American economics’. <br />Tinkerer beware!”<br />
  4. 4. Sandy Lutz, Woodrin Grossman & John Bigalke<br />From Med Inc.<br />“America has twice as many hospitals and physicians as it needs.” <br />
  5. 5. PCP Concentration<br />FL = #4 in US for Population<br />FL = #4 in US for Physicians<br />PCP&apos;s = 36% of doctors in US<br />PCP&apos;s = 37% of doctors in FL<br />
  6. 6. PCP Concentration<br />6.1% of US population located in FL<br />5.6% of US PCP&apos;s are located in FL<br />FL Population = 17,922,260<br />FL PCP&apos;s = 21,269<br />Assumed PCP Shortage = 1,708<br />% of Nurse Practitioners in private practice needed to over saturate market?<br />20%<br />
  7. 7. PCP Concentration<br />Excess specialist physicians in FL?<br />215<br />Real Current PCP Shortage<br />&lt; 1,500<br />What are Florida’s population forecasts based primarily on?<br />
  8. 8. Dr. Elliott Fisher<br />Center of Evaluative Clinical Sciences<br />Dartmouth Medical School<br />“If we sent 30 percent of the doctors in this country to Africa, we might raise the level of health on both continents.”<br />
  9. 9. PCP Concentration<br />1:780<br />US<br />1:1,176<br />5 miles from USF Health South Tampa<br />1:843<br />FL<br />1:749<br />5 miles from USF<br />Main Campus<br />
  10. 10. Don Berwick<br />Harvard Medical School<br />“We’re in the Internet age, and the average patient can’t email their doctor.”<br />
  11. 11. NP & Physician Offices<br />Moderate seasonality (possible short-term cash flow shortages)<br />Commonly borrow long-term debt to fund fixed assets <br />Customer acquisition primarily driven by referrals and a convenient location<br />Secondarily by PR, speaking engagements, websites, advertising and direct mail <br />Although collection and coding issues, the common level of receivables and bad debts is low when compared against all US firms<br />
  12. 12. NP vs. Physician Offices<br />Growth industry vs. mature<br />Smaller offices (revenue and employees)<br />Greater industry concentration<br />Less direct competition, larger ad budgets<br />Less sales supported per employee, creating additional payroll burden, leading to higher overhead<br />Less operating profit, less net profit before taxes and less owner compensation forcing a smaller market valuation<br />
  13. 13. Recap<br />Opportunities are defined by geographic ‘pockets’ – not US or state averages<br />Getting started is cash intensive – especially in assets and location<br />Working capital is always a concern in healthcare, but no bigger or worse than most other industries<br />Growth potential exists for small, flexible and innovative NP offices<br />
  14. 14. Viability Analysis<br />
  15. 15. Requirements<br />A well-defined concept<br />A reasonable financial goal<br />A localized target market<br />A comparable measure <br />A strategic market position<br />
  16. 16. Finding Relevant Information<br />My own experience<br />My peers and mentors<br />My competition<br />My trade association<br />My SBDC<br />
  17. 17. Measures of Viability<br />Against experience<br />Against reason<br />Against averages<br />Against market data<br />Against comparables<br />
  18. 18. Getting Started<br />How do you generate volume?<br />Long-term care? Single-visit care? Concierge or corporate services?<br />Financial Goal?<br />Target Sales = Overhead + Target Income<br />Target Volume = Target Sales / Average Billables<br />Target Market?<br />3-mile radius? 5-mile radius? County?<br />Market Position? <br />Specialist? Concierge? Preventative? Immediate Care? Technology?<br />Non-hospital advertising expenditures: ~$4.5B US, ~$250MM FL<br />
  19. 19. Parting Thoughts<br />What is the base level of service vs. competitive advantage?<br />Avoid terms like value, service, quality, etc.<br />Instead, define how you do it vs. everyone else<br />What is your philosophy on insurance?<br />It is tempting to believe you will not accept it<br />BUT, you are not an MD and will not be viewed as a top-tier provider – can you afford not to?<br />
  20. 20. Business Plan<br />
  21. 21. Validation Tool<br />Unknown<br />“If you fail to plan, you plan to fail.”<br />
  22. 22. Planning Tool<br />Dwight D. Eisenhower<br />“Plans are nothing; planning is everything.”<br />
  23. 23. Communications Tool<br />George Burns<br />“Define your business goals clearly so that others can see them as you do.”<br />
  24. 24. Motivational Tool<br />Leonard Bernstein<br />“To achieve great things, two things are needed; a plan, and not quite enough time.”<br />
  25. 25. Execution Tool<br />Peter Drucker<br />“Plans are only good intentions unless they immediately degenerate into hard work.”<br />
  26. 26. Ten Q’s – The First Five<br />Who buys and why?<br />Why from you?<br />Roadblocks?<br />Why will Management succeed?<br />Owner contribution ($, time, assets, IP)?<br />
  27. 27. Ten Q’s – The Final Five<br />Assets and People required?<br />Required return?<br />Exit strategy?<br />Funding requirement?<br />Clear tie between financial, operational, and marketing plans?<br />
  28. 28. Starting A Practice<br />Legal Entities, Agreements and Hiring<br />
  29. 29. Legal Entities<br />Business Names<br />Government Searches<br />Sunbiz.org<br />USPTO.gov<br />Copyright.gov<br />General Searches<br />DnB.com, Thomasnet.com<br />Google.com, Reuters.com<br />SuperPages.com, YellowPages.com<br />Domain Searches<br />
  30. 30. Legal Entities (continued)<br />Sole Proprietorship<br />Partnership<br />Limited Liability Company (LLC)<br />A hybrid form that combines elements of partnerships and corporations. In Florida, LLCs may elect whether to be taxed as partnerships or corporations. On the federal level, LLCs with more than one member file a partnership return on IRS Form 1065 unless they elect to be classified as a corporation.<br />Corporation<br />The two types of corporations are the C-Corporation and the S-Corporation. With a C-Corp, the corporation rather than individuals pays taxes and assumes liabilities. Florida’s corporate tax is 5.5%. An S-Corp allows up to 75 shareholders to share income and expenses and to report them on their individual income tax returns.<br />
  31. 31. Legal Entities (continued)<br />All legal entities, except sole proprietors operating under their owner&apos;s full legal names, must file with the State of Florida at http://www.sunbiz.org. <br />A Fictitious Name Registration is also required of individuals who do business under any name other than either their full, legal personal name or a properly registered corporate name, partnership, trademark, service mark or limited liability company. <br />
  32. 32. Legal Entities (continued)<br />It is recommended that all Florida business file for a free EIN number with the IRS. <br />If your corporation or LLC will be electing to be taxed as a S-Corporation, you will make this election with the IRS as well, using Form 8832 and Form 2553. <br />Most Florida Counties and Cities mandate an Occupational Tax for the privilege of locating your business within their limits. To find if your county requires an Occupational Tax, visit http://www.FloridaTaxCollectors.com. To learn if your city requires the tax, visit http://www.MyFlorida.com/cities/. <br />
  33. 33. Legal Agreements<br />If more than one individual will be involved in the ownership and management of the firm, or if you are developing a corporation, it is recommended that you seek legal advice in the development of internal agreements. For samples, visit http://www.publiclegalforms.com. <br />
  34. 34. Legal Hiring<br />To investigate average pay per position, visit http://WhatPeopleAreAsking.com. <br />To learn about current Worker&apos;s Compensation requirements, visit http://www.FLDFS.com/WC/. <br />To report a new employee to the State of Florida, visit http://www.FL-NewHire.com.<br />
  35. 35. Resources<br />Florida Small Business Development Center Network Healthcare Center of Excellence at the University of South Florida<br />Mario Iezzoni, CPA, MBA (Director)<br />(813) 905-5800, miezzoni@coba.usf.edu<br />USF Library System<br />JardHoppenfeld (Business Librarian)<br />(813) 974-6266, jhoppenf@lib.usf.edu<br />

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