So I recently left my associate position in Massachusetts to join a practice in Northeast Ohio. I am very happy in this gorgeous practice. The owner has an 8 room practice to which we are only using 3-4 rooms. So he has 4 fully functioning exam rooms going unused. I am thinking of suggesting to him that we offer to rent those rooms to residents coming out of residency for them to start their practice. And was hoping you could help me with my pitch and numbers as I am not familiar with some things.
1. We could build a multispecialty practice through this rental which would create a great synergy.
2. We could offer for first and last month rent up to four rooms to some doctors of varying specialties that can create a great network.
My goal was to suggest to him that we offer residents the option to rent 2 rooms for as 3k a month or 1 for 2k. This would get them use of our EMR, onsite x-ray machine, Biller, and front desk staff. As well as no CAM charge, utilities cost or building taxes. We have onsite maintenance and cleaning so that would be covered too. So basically all they would need is an MA if they want one and malpractice insurance. After the lease term they can choose to move on with their patients to their own place or stay with us.
Note: my plan is to have a tiered cost structure based on rooms needed, length of lease, and split of collections (this is where I may be way off). It is my understanding that doctors coming out of residency get 40-60% of collected so I was thinking of 20% sounding right that gives them an extra 20% over private practice. Then they can build their practice for 5 years and walk off with their patients if it makes financial sense else sign another lease.
Here is the numbers behind my thought as to why it makes sense (please correct any assumed numbers so my presentation goes well):
Cost for doctors coming out who want to start a practice
Rent for Place : ??? (we will assume free)
Utilities I am going easy and round : 100 / month
front desk, billing and staff (assuming 2 people at 10$): (2 people * 10$ an hour * 40 hrs a week * 52 weeks = 41600 / 12 months = 3466.67 a month on average)
so already without equipping the rooms and such you have less of an outlay per month just taking staffing into consideration.
Do you think my offer is too much, too little, or just right for rent for 5 years? if not right, what would you change? Do you think anyone coming out of residency would be interested in such an opportunity? Do you think I should propose this to my boss and at what cut should I ask for to coordinate this (i.e. 50% of the collections piece)? How would you pose it to him? Where would you go to look for people who are interested in this?
Thanks for the advice I have trolled these forums a lot and there is a ton of good advice and I appreciate any more that you can provide.
1. We could build a multispecialty practice through this rental which would create a great synergy.
2. We could offer for first and last month rent up to four rooms to some doctors of varying specialties that can create a great network.
My goal was to suggest to him that we offer residents the option to rent 2 rooms for as 3k a month or 1 for 2k. This would get them use of our EMR, onsite x-ray machine, Biller, and front desk staff. As well as no CAM charge, utilities cost or building taxes. We have onsite maintenance and cleaning so that would be covered too. So basically all they would need is an MA if they want one and malpractice insurance. After the lease term they can choose to move on with their patients to their own place or stay with us.
Note: my plan is to have a tiered cost structure based on rooms needed, length of lease, and split of collections (this is where I may be way off). It is my understanding that doctors coming out of residency get 40-60% of collected so I was thinking of 20% sounding right that gives them an extra 20% over private practice. Then they can build their practice for 5 years and walk off with their patients if it makes financial sense else sign another lease.
Here is the numbers behind my thought as to why it makes sense (please correct any assumed numbers so my presentation goes well):
Cost for doctors coming out who want to start a practice
Rent for Place : ??? (we will assume free)
Utilities I am going easy and round : 100 / month
front desk, billing and staff (assuming 2 people at 10$): (2 people * 10$ an hour * 40 hrs a week * 52 weeks = 41600 / 12 months = 3466.67 a month on average)
so already without equipping the rooms and such you have less of an outlay per month just taking staffing into consideration.
Do you think my offer is too much, too little, or just right for rent for 5 years? if not right, what would you change? Do you think anyone coming out of residency would be interested in such an opportunity? Do you think I should propose this to my boss and at what cut should I ask for to coordinate this (i.e. 50% of the collections piece)? How would you pose it to him? Where would you go to look for people who are interested in this?
Thanks for the advice I have trolled these forums a lot and there is a ton of good advice and I appreciate any more that you can provide.