This document discusses the potential for starting a new physician practice in Florida. It notes that while Florida has a high number of physicians, there may still be a shortage of primary care physicians. The document provides statistics on physician concentrations in Florida and the United States. It also discusses factors to consider for a new practice such as location selection, developing marketing strategies, financial projections, obtaining financing, and creating business plans and operations. Overall, the document analyzes the opportunities and challenges for launching a new physician practice in Florida.

1. Does the world need another start-up physician practice? Daniel James Scott, MS, MBA CTBC, CBA, CRC, CGBP, CMQ/OE, CQPA

3. Sandy Lutz, Woodrin Grossman & John Bigalke From Med Inc. “America has twice as many physicians as it needs.”

4. Dr. Elliott Fisher Center of Evaluative Clinical Sciences Dartmouth Medical School “If we sent 30 percent of the doctors in this country to Africa, we might raise the level of health on both continents.”

6. PCP Concentration FL = #4 in US for Population FL = #4 in US for Physicians PCP's = 36% of doctors in US PCP's = 37% of doctors in FL

7. PCP Concentration 6.1% of US population located in FL 5.6% of US PCP's are located in FL FL Population = 17,922,260 FL PCP's = 21,269 Assumed PCP Shortage = 1,708

8. PCP Concentration Excess specialist physicians in FL? 215 Real Current PCP Shortage < 1,500 What are Florida’s population forecasts based primarily on?

9. PCP Concentration 1:780 US 1:1,176 5 miles from USF Health South Tampa 1:843 FL 1:749 5 miles from USF Main Campus

10. Market Focus Find potential locations Analyze competitive practices (within a three-to-five-mile radius) Survey demographic (especially income) information on the area to be served Note population projections for the area Include any other factors pertinent to the location

11. Wilfred Peterson Author, The Art of Living “Big thinking precedes great achievement.”

12. Warren G. Bennis Founding Chairman, The Leadership Institute at USC “Leadership is the capacity to translate vision into reality.”

14. Russell Robertson, M.D., Chair Council on Graduate Medical Education Lori Heim, M.D., President American Academy of Family Physicians “When you look at other nations with comprehensive policies with regard to universal access to health, the ratio of generalists to (sub)specialists is about 50/50. But the U.S. physician profile is only 31% primary care and 69% (sub)specialty care.”

15. Don Berwick Harvard Medical School “We’re in the Internet age, and the average patient can’t email their doctor.”

17. How Will I… Compete to harness specific word of mouth or internal marketing strategies Maximize the benefit of my location Build referral sources (schools, local merchants, other health care providers) Reach potential new patients (including leveraging PR, joining and speaking to community organizations, etc.) Plan for advertising and direct mail

19. Specialist? Concierge? Corporate Services? Preventative? Immediate Care? Technology? Breadth of Practice or Payer Base? Quality Assurance? Alternative Medicine? Customer Service? Green/Carbon-Neutral Policies?

22. Unknown “If you fail to plan, you plan to fail.”

23. George Van Horn Senior Analyst, IBISWorld “Healthcare practices who thrive and prosper will be noteworthy for their heightened focus on competitive marketplace positioning and for superior cost containment.”

25. Quick Analysis Target Sales = Overhead + Target Income Specialty? Third-party payer mix? Collections via each payer? Average Collections per source?

26. Quick Analysis (cont’d) Divide Target Sales by average collections to determine rough # of patient volume Divide Target Sales by $162,000 to determine rough # of employees Divide Target Sales by 2.3 to determine rough $ of payroll

27. Trending Some Upside Higher spending levels! Larger profits! Bigger cash reserves! Still a fragmented industry! Demographic shifts! Some Issues Greater competition! Larger offices! Increased effectiveness! Concentrated payers! Internal concerns!

28. Financial Benchmarks 100% sales 45.23% payroll 23.8% owner compensation 4.54% rent 0.93% advertising 12.1% operating profit 9.5% net profit Simple Valuation Techniques 0.45 x Net Sales (0.45 x $1.6MM = $720,000) 5.04 x Operating Profit (5.04 x $193,600 = $975,744) 5.28 x Net Profit (5.28 x $152,000 = $802,560)

29. Cash Flow Collection rate – current collections divided by current charges (60-120 days) Realization rate – current collections divided by the sum of current collections plus current write-offs Presence of “outside income” – any income not from direct patient care, such as stipends from hospitals, nursing homes, etc. Staff salaries as a percent of collections Occupancy costs as a percent of collections Collection of patient co-pays (should be in the vicinity of 95% or better)

31. Peter Drucker Author & Management Guru “Plans are only good intentions unless they immediately degenerate into hard work.”

33. A (non-exhaustive) To Do List Conduct a feasibility analysis Retain advisors Prepare a business plan Obtain financing Identify a location Negotiate the lease Choose and order furniture, equipment, billing system Hire employees Develop employment policies Develop a filing system Develop marketing materials Advertise for patients Prepare patient charts Develop coding and compliance policies Develop an encounter form Develop a general ledger system Develop a compensation system in a group practice Establish professional relationships Recruit patients Register patients in the billing system (database)

34. Recap Opportunities are defined by geographic ‘pockets’ – not US or state averages Know what you want, and build structure around those goals Growth potential exists for well-run, flexible and innovative physician practices Working capital is always a concern in healthcare, but no bigger or worse than most other industries – focus on success

35. Resources FSBDC Healthcare Center of Excellence @ USF Mario Iezzoni, CPA, MBA (Director) (813) 905-5800, miezzoni@coba.usf.edu USF Center for Entrepreneurship Michael Fountain (Director) (813) 974-7900, fountain@coba.usf.edu USF Library System JardHoppenfeld (Business Librarian) (813) 974-6266, jhoppenf@lib.usf.edu Medical Group Management Association (877) ASK-MGMA, http://www.mgma.com Primary Research (done by you!)