One of the benefits of working as a nurse practitioner is that in many states, NPs can own their own practices. Independent practice laws may mean that the nurse practitioner can own a clinic and work autonomously. Or, an NP owned practice may be operated under a supervisory agreement with a physician. In my earlier years as a nurse practitioner, like many new NPs, I thought this might be the path I would take with my own nurse practitioner career. Owning your own practice, however, may not be as ideal as it sounds.
Owning and operating a clinic is a lot of work. While it seems glamorous to set your own hours and have the autonomy to treat your patients in the way you think is best, there is a lot that goes along with running a business that isn’t quite so idyllic. This morning, I chatted with one nurse practitioner practice owner who expressed some of the struggles she has faced owning her own practice. Here are some of the issues she deals with day-to-day that make life as an NP practice owner pretty tough.
1. Big Brother
The government has an ever increasing stake in healthcare. The way clinics must operate and the way providers must practice are highly regulated. So, while you may envision freedom as a nurse practitioner practice owner, there are higher powers at play that will, in some ways, limit how you operate your practice. The clinic owner I talked with, for example, was among a number of NP practice owners in her state that faced an audit scrutinizing the way NPs performed well child physicals on Medicaid patients. While no error was found in her methods, the ordeal cost five days of she and her staff’s time, not to mention a week of lost revenue and cost of running the audit. Complying with government policies, regulations, and intervention eats up valuable time you could be seeing patients and can cost tens of thousands of dollars taking away from your bottom line.
2. Choosing Your Team
Depending on where your practice is located, filling provider and support staff positions can be difficult. Finding the right person who fits the culture of your practice, and has the appropriate experience and credentials you’re looking for can be a huge hang-up as a practice owner. Then, when you do find these individuals, you must work to retain them. The nurse practitioner practice owner I spoke with lamented that while she was able to find great NPs to join her team, location along with other factors led to high turnover. Nurse practitioners left the practice related to long commutes from a neighboring city, and personal circumstances like growing families. Provider turnover is costly. Not to mention, when an employee leaves your practice, as the one in charge, you’re temporarily responsible for picking up the slack.
3. Practice Setup
There are a number of systems, processes, and resources that must be implemented to make your practice operate day-to-day. Depending on your setting and specialty, you may need to coordinate with lab and imaging companies. You’ll need an electronic medical records system. The NP practice owner I talked with expressed that in a smaller practice, getting these systems functioning properly can be a major stressor. After a number of years for example, the EMR company she worked with went out of business leaving her with a costly software transition on her hands. The EMR switch-up was so involved she even had to hire an additional full-time employee to help facilitate the move. The new employee’s salary detracted form her own pay. If you envision opening your own practice, plan to spend plenty of time and financial resources on practice setup.
4. Billing Struggles
In most cases, patients don’t pay directly for medical care. Rather, private insurance companies and government entities like Medicare and Medicaid are involved. Going through these organizations to get paid can be a complicated mess. For example, the nurse practitioner practice owner I spoke with, must get credentialed with five different Medicaid programs in her state. Each of these applications may take up to seven months to complete, leaving her with a never ending pile of paperwork and billing complications.
5. Financial Setbacks
Since large companies and government entities are typically the ones paying for patient’s care, this also means that as a practice owner, you are subject to the reimbursement whims of much larger organizations. The NP clinic owner I spoke with related continual frustration with this process. Medicaid programs in her state, for example, had recently cut reimbursement rates affecting her practice’s bottom line. Being that nurse practitioners typically earn a fraction of the rates paid to physicians, low reimbursement rates were squeezing her practice. And, when the practice takes a financial hit, as a practice owner, she is the first to take a pay cut.
Many nurse practitioners out there run highly profitable practices. Others, even though highly capable, experience significant hurdles in their practice ownership journeys. Doing due diligence and planning ahead is essential if you aspire to own your own clinic as an NP. Understand how the laws and payers in your state will affect your business model. Plan to spend plenty of time on administrative responsibilities, or allot financial resources to outsource these, so you maintain time to see patients. While owning one’s own nurse practitioner practice sounds like it leads to a life of career freedom and a fat paycheck, for many, this isn’t the reality. Keep a balanced view and set realistic expectations as you open your own practice.
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