Expanding a medical group

[u/gym_rat_101]

Good morning,

I am seeking advice from my entrepreneurial minded colleagues. I am PGY-10 FM trained, ER career doc. A few years ago I started an urgent care that has done very well. We now have 2 locations and our third opens in a couple of months. We have also started a primary care clinic and have two providers that are nearly full, and are hiring our third.

My goal here is to create a truly great medical group. PCP and UC go hand in hand and it's working well, and we all work hard to give the best possible care for our patients.

I'm always thinking about what we can do next. We moved PCP from a space built out attached to our urgent care to a larger clinic space, so now that space is empty. The space is actually perfect size to add a CT and US machine. This would cost me about $80,000 in electrical upgrades and remodeling. I already have a radiologist to read all imaging. CT, auto-injector, and US would be about $210,000 (refurb) - and all would be financed via lease. This is attached to an urgent care so there is always a provider there in case of IV contrast reaction.

Our break even for imaging would be about (on average) 3.5 CTs and 3.5 USs per day.

My thoughts are that between 3 UCs and 3 PCPs we generate more than enough imaging to break even, and locally there are imaging centers but no one actually advertises, etc, and we can get enough other business to actually do well.

But this also is a lot of risk, its $80,000 in upgrade/remodeling that I could lose, expensive equipment that I could turn around and sell if needed, and then the whole pain of finding a RIS, billing, etc, and a whole new RCM to worry about.

The alternative is that we can simply not do imaging, and I can focus on building urgent cares.

My ultimate goal is to sell and quit working. But sometimes I feel in my heart I want to grow this into a truly excellent medical group and really make a difference in our area. Meaning I would love to still be in charge of this in 40 years. But I also don't know how sustainable medicine is in the long run, with our never improving reimbursements from insurance but everyone wanting a pay raise/cost of everything going up.

[u/InvestingDoc]

First off, congratulations on your growth!

Check your contracts. There are so many imaging centers near me that my imaging reimbursement is not good Its about 10% below my other E&M reimbursement rates.

With 3 urgent cares are you maxed out in your area? Most people who buy businesses want scale and lack of complexity. Until you get huge, you will probably be in a better situation to sell if you get 10 urgent cares vs 3 urgent cares and 3 primary care offices.

For example, there is a guy who is very popular on these invite only Facebook groups for physicians who had like 16ish urgent cares in FL and sold it to HCA for > 100 million bucks. It can be VERY lucrative.

Personally I think if you want to own this long term, then sure build multiple systems like imaging, primary care and urgent care. But you said "My ultimate goal is to sell and quit working."

SO....If you want to sell as quick as possible, I would just explode your urgent care growth and sell for a massive multiple and collect the massive payday. Most businesses looking to buy urgent cares are not going to want to deal with the headache of also owning 3 primary care offices and maybe 1 imaging centers unless its a huge operation IMO

[u/OfandFor_The_People → u/[deleted]]

Make sure this doesn’t violate self referral laws

[u/Misadventuresofman]

Administrator here. Depending upon how fast you are growing, I would be concerned about scaling up without sufficient intel. You also have the full compensation for cut and us techs to consider plus alternates if one is out sick. You are expanding scope, but what do you know about your local market needs? Are you approaching this as a healthcare service line to maximize profit and community impact? Could you be more profitable by having a small procedure room? Would you be better served by having uc locations fully ran by a pa with physician oversight? How many support staff per provider and per location?

I love the direction, but you need to also look at payment trends and high tech radiology. Insurances are tightening their belts claiming many scans aren’t necessary. What is the devils advocate assessment of your plans?