Your Guide to Starting a Dermatology Practice

Explore Resources and Advice for Dermatologists Entering Private Practice

The good news is, you are not alone. Whether you’re just finishing medical school or residency or making a mid-career move, you’re not the first—and you won’t be the last—doctor wondering how to start a dermatology practice. But not everyone gets it right the first time, so it’s important to know where to turn for guidance.

Over the years, Modernizing Medicine® has gained quite a bit of experience working with both new dermatologists just starting out and those looking to start a new dermatology clinic mid-career. Because we’re so familiar with the challenges involved, we’re well equipped to help you avoid hazards, look for new opportunities and take the right turns on the road to success.

Let’s start with the basics.

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4 Questions to Ask Before Starting Your Practice

Ready to turn your dream of starting your own dermatology practice into reality? Determined to see patients on your own terms and focus on what you love doing most? Then you need to invest in preparation before you start investing in your practice. It’s absolutely critical to answer these questions first. Once you get these down, how you build and customize your new dermatology private practice is entirely up to you.

Consider the following: Where?, Who?, What?, How?

Where?

This is usually the simplest question to answer. Do you want to locate your new practice in a particular state, city or even zip code? Remember that certain regulations differ by geography and can impact your practice’s bottom line. Also, some areas will have more dermatology business competition than others. Generally, there are more practices set up where there are more clients. It makes sense. However, you’ll have to market your practice effectively to stand out.

And don’t forget about the type of building you move into. Do you want to be on the 15th floor of a large office building or do you want your own space? More importantly, what do you think your patients would prefer?

map markers
picute of dermatology office with 2 females skin treatment

Who?

What kind of patients do you want to treat as a dermatologist? Are you thinking of starting a cosmetic dermatology practice, leaning more toward medical dermatology or some combination of the two? Will you provide more invasive procedures, such as Mohs surgery? Figuring out these specifics in advance will help you plan how you configure your practice, which in turn can dictate the kind of people you hire and the physical space requirements you’ll need. As you’re probably starting to notice, the decisions you make are connected in some way.

Who?

What kind of patients do you want to treat as a dermatologist? Are you thinking of starting a cosmetic dermatology practice, leaning more toward medical dermatology or some combination of the two? Will you provide more invasive procedures, such as Mohs surgery? Figuring out these specifics in advance will help you plan how you configure your practice, which in turn can dictate the kind of people you hire and the physical space requirements you’ll need. As you’re probably starting to notice, the decisions you make are connected in some way.

picute of dermatology office with 2 females skin treatment

What?

Determining what resources you’ll need means thinking about more than just dermatology office equipment. Carefully consider the type of technology to help your practice get up and running quickly. This can include an EHR system, practice management system and even a revenue cycle management (RCM) service. Some vendors offer an all-in-one solution that integrates all of these, providing a simpler and cheaper alternative to system bridges.

Remember that you can hire more staff or less staff depending on the kind of technology you choose. For instance, onsite servers require additional time, money and IT staff to set up and manage them, while Cloud-based software typically just needs an Internet-connected computer or iPad.

female doctor holding up ipad with EHR system, practice management and revenue cycle management (RCM) service

How?

You’ll need to figure out your budget and how much money to spend, but the question of how to make it all happen mainly focuses on people, process and technology:

B

People

What kind of staff will you hire? You probably won’t be as successful if you hire Mohs specialists for a clinical practice. Mohs surgery is a low-volume, high-dollar enterprise, whereas clinical practice tends to be a high-volume, low-dollar scenario. Knowing what services your practice is going to offer is critical when you hire your staff. Also, understanding how each staff member will function in the practice will make the hiring process easier.

When hiring, also consider what type of people you’ll enjoy working with, what kind of culture you want and how your organization will be structured. How much do you want to be involved in leadership? What kind of practice manager do you want to hire? Hiring the wrong person can make your work life suffer.

Process

Articulate in advance how you plan for each clinical, surgery or aesthetic patient to move smoothly through your practice. Changing a process isn’t easy, so spend the time in advance and get it as close to dialed-in as possible.

The more changes you make to your technology and your processes after they are in place, the higher the risk of disrupting your practice’s efficiency. Change is not always good, but it’s also not always bad. You always have to weigh the pros and cons when a change is made in your process.

Technology

This is where dermatologists starting out often go wrong. They consider technology a burden that they have to have. However, technology is an investment into your practice, into your patients and into your personal life. Because choosing the wrong technology can lead to big problems, including poor office performance, patient dissatisfaction and staff burnout.

Learn how the right dermatology software can help you optimize your practice.

The type of practice you create will also guide your technology needs. A high-volume aesthetic practice that offers multiple cosmeceutical products could benefit from robust inventory management software. Meanwhile, for a high-volume clinical practice, it’s especially important to have fast, efficient EHR and practice management systems, or even an all-in-one solution that also features an integrated RCM service.

When you are selecting technology for your practice, price should only be one of the metrics used to analyze the technology. Newer technologies can be less expensive, but may lack the support needed for your success. Established technology may be more expensive, but is usually better supported. In short, price is important, but also consider what else you may need from it. You often aren’t comparing apples to apples.

Thorough Planning Can Pay Off

Now that you’ve begun to answer the questions above, let’s talk about timing because it’s essential to setting up a new dermatology practice. You may want to begin with the elements that can take the longest to set up, such as negotiating with insurers. Take a look at the graphic to help you start planning in advance.

Speaking of timing, how long does Dr. Jerome R. Obed say it takes on average to turn a profit at a new practice?

  • 1 year
  • 2 years
  • 3.5 years
  • 5 years

Paving the way to a new
dermatology private practice.

Start Insurance Credentialing

9 – 12 months in advance, so you can bill starting on day one.

Choose Practice Location

6 months ahead of time – you’ll need a physical address to process forms.

Process Licensing and Regulations

3 – 4 months in advance to avoid any last minute surprises.

Hire Your Staff

About 6 weeks before opening day to get everyone ready.

Use this approximate timeline to help you plan in advance.

Minimizing Risks vs. Maximizing Rewards

Of course, almost every dermatologist considering this kind of career move wonders about the cost of starting a dermatology practice. It’s difficult to say, however, because so many variables go in to launching a thriving practice. Location, potential patient population, the proximity of other dermatology practices and the type of equipment you need to treat patients can all contribute to the cost.

So let’s instead focus on an important question. Is starting a dermatology practice worth the risk? It’s a lot of work to go through if you aren’t sure.

As you know, to maximize your rewards, you also increase your risk. If you manage your practice well, there are some great perks. But the buck stops with you when you own your own practice. That means you get to enjoy all of the successes—and failures—by yourself. That’s a big risk. Of course, there are ways that could make this venture less risky, like making the right decisions when it comes to staffing, technology and location, but you won’t completely remove risk from the scenario.

Be honest with yourself and what your motivations are. It will save you lots of headache down the road.

Avoid these rookie mistakes when starting your private dermatology practice.

young female doctor smiling

Remember, You’re Not Alone

Okay, so you’ve decided to start your dermatology practice. That’s fantastic and we wish you the best of luck. With the right people, processes and technology at your disposal, you should feel confident in your new endeavor.

Remember, when you’re ready to plan for your new practice, reach out to Modernizing Medicine and benefit from our experience in helping dermatologists succeed in private practice nationwide. There’s a reason why our dermatology EHR system, EMA™, is the #1 EHR system for five years running, according Black Book™ Research. We look forward to working with you.

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