Some of the early decisions that practices need to make is the insurance makeup of the practice and the go-to market strategies for patient acquisition. These decisions will not only help facilitate discussions with banks — who will want to know these details — but will help guide your marketing plan. Options may be to:

• Develop a hybrid model via in-/out-of-network insurance participation
• Remain fee-for service, submitting claims on the patient’s behalf via out-of-network participation
• Serve a low-income patient population, accepting joint federal and state programs

“There’s no right or wrong answer,” says Moffat. “Some doctors may have a vision of serving their communities and helping patients in a low-income area, while others may prefer to build a practice in an affluent community. You can also adjust your strategy as you grow. Some practices may start within a health maintenance organization (HMO) network and switch over to a preferred provider organization (PPO) model down the line.”

If you’re in a densely populated, lower income area, doing HMO and Medicaid may be most appropriate, though this will require high volume to be profitable. Alternatively, in an area where real estate is expensive and competition is high, offering fee-for service as a high-end specialty practice would be more appropriate.