How to Start a Walk-In Clinic

Part 1 - How to start a Walk-In Clinic business - Background

A walk-in clinic, also known as urgent care, is where consumers go to seek quick medical treatment. The specifics of what services are offered vary from clinic to clinic, but the concept remains the same: they offer extended hours, treat non-life threatening injuries and illnesses, and accept walk-in patients. Strong customer service is a focal point of all urgent care facilities.

Our guide is in 3 parts:

• Part 1 - How to start a Walk In Clinic business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a walk-in clinic?

As mentioned, this is a capital intensive business venture. Total costs vary, depending upon clinic size, services offered, region, and staff size. Business owners who are starting with a blank slate should plan on a budget of $750,000 to $1 million. This covers all start-up costs, as well as operating expenses for the first three months. Three months is the standard time it takes to receive payments from insurance companies.

Key items to factor into your budget:

• Purchase, build, or lease facility space – It is recommended that you allocate 1,500 square feet for each physician. This should offer enough room for each doctor to have three exam rooms. An additional 1,000 square feet should suffice for a lab, radiology, and patient waiting room.

• Facility improvements – While some improvements will be handled by the landlord, the national average is $100 per square foot. Only $30-$50 of this will be paid for by the building owner.

• Furniture and fixtures

• Clinic equipment and software – Equipment costs range anywhere from $150,000 to $200,000. Whenever possible, consider leasing the equipment.

• Professional fees – There is a great deal of planning and thought that goes into starting this type of business. It is recommended that you seek the advice of an attorney and business consultant to ensure everything is handled efficiently, economically, and legally.

• Insurance – Seek the advice of a licensed professional when determining the type of coverage needed.

If this career move is important to you, but you lack the necessary funding, consider approaching your local hospital. Many busy hospitals are investing in clinics as a way to keep emergency and primary care patients separate.

What are the ongoing expenses for a walk-in clinic?

There are a number of operating expenses that should be considered when constructing your business plan. Proper management and working as lean as possible will help ensure your facility gets out of the red in three to six months.

The following are standard expenses incurred by walk-in clinics:

• Payroll and taxes

• Electronic Medical Records/EMR software – Investing in a cloud-based system could help reduce costs, but does usually come with a monthly fee, based on the number of users.

• Radiology and lab fees – Will this be handled in-house, by a member of your staff, or will you contract this work out?

• Insurance – At the very least, you need property, liability, and malpractice insurance. A professional can assist you in determining the proper coverage for your business.

• Professional fees – It is advised that you remain in contact and seek the advice of professionals, such as a CPA, attorney, and business consultant. These fees will vary, depending upon the scope of their work.

• Maintenance and cleaning – The facility should be kept clean and well maintained.

• Write-offs for nonpayment

Who is the target market?

Due to changes in the healthcare system, many consumers are now turning to walk-in clinics when they require medical treatment and/or advice. This expands your target market to virtually every American, insured and uninsured. The key is to choose a location that lacks this type of facility. Your space should be easily accessible, have ample parking, and stand out to those driving by.

How does a walk-in clinic make money?

Each patient seen by the clinic will help generate revenue for the business. To ensure patients receive the best possible care, many urgent care facilities offer additional services such as lab work and X-rays.

How much can you charge customers?

Fees will vary, depending upon the type of services a patient receives. Since medical coding for this type of facility can be quite complex, it is recommended that clinics do one of three things: invest in an EMR specifically written for this type of medical facility, hire a billing company or coder, or invest in additional education on this subject for billing personnel.

While insurance companies will handle much of the reimbursement, patients are also required to fulfill their deductible and copays. These fees vary depending upon the client’s medical plan.

How much profit can a walk-in clinic make?

Profits are directly tied to the number of patients you see, average fees charged for each client, and operating costs.

If you have one physician on staff, who sees two patients for a nine hour day, 5 days a week, at $150 per patient:

$150 x 2 x 9 x 22 = $59,400 per month. That comes out to approximately $713,000 annually.

To determine profit, you must now subtract out clinic costs, including salaries for the physician and staff.

Successful clinics report break even numbers of between 12 and 23 patients per day, depending upon the specifics of their business and region.

How can you make your business more profitable?

It is critical that your clinic offer appealing hours, including weekends and evenings. Offering services such as laboratory tests, X-rays, and on site casting and suturing will help attract more patients and increase profits. Some have even found success offering assistance to local nursing homes. Weight loss programs and substance abuse treatment could also help expand your customer base.

Day-to-Day and Growth

What happens during a typical day at a walk-in clinic?

There are many moving parts to an operation of this magnitude. The facility must be kept clean and orderly, patients need to be checked in and out, billing and other administrative duties should be managed, and a patients must be seen, diagnosed, and treated. In some instances, someone from the clinic will need to ensure patients receive the follow-up care required. A representative will also need to be in charge of handling the marketing strategy.

What are some skills and experiences that will help you build a successful walk-in clinic?

Depending upon which state you reside in, it may be required that the business owner be an attending physician. This requires a significant amount of education, licenses, and accreditation. Leaders must be organized, confident in decision-making, and skilled at delegating responsibilities to staff members.

Many insurance companies now require urgent care facilities to receive certification and/or accreditation as part of the contracting process. The Urgent Care Association (UCA) can assist you in signing up for the appropriate Certified and Accredited Urgent Care designation program.

As with most small businesses, it would also prove beneficial to gain some experience working in the field. The knowledge and training will prove invaluable as you navigate through those first few uncertain years.

What is the growth potential for a walk-in clinic?

While this is a capital intensive business, there is great potential for growth. More than 150 million patients visit walk-in clinics annually, seeking treatment for everything from the flu to broken bones and school physicals. Due to a shortage of access to primary care physicians and the introduction of the Affordable Health Care act, there has been an increase in demand for walk-in clinics. While the future of the AHC is uncertain, demand is still expected to increase, as consumers face higher deductibles and reduced coverage.

What are some insider tips for jump starting a walk-in clinic?

It’s important remember that one of your business’ primary goals is to deliver fast, quality customer service. While you might be tempted to cut corners on the amenities you offer, industry leaders warn against this. Free Wi-Fi, televisions, coffee stations, and warm, inviting decorations will all enhance the patient experience. Their peace of mind will ensure they remember your clinic the next time they need medical assistance.

The credentialing and contracting process with insurance companies can take several months. Start-ups are urged to begin as soon as possible to ensure everything is in order before opening day. If you plan to accept TRICARE, Medicaid, or Medicare, the process is equally lengthy.

If you plan to expand your business to multiple locations, choose a software that can grow with you. Having a system that each location shares could prove advantageous, as patients may visit different facilities over time.

How and when to build a team

Industry leaders indicate their first mistake was starting out with too large of a staff. They urge startups to think simple until the business starts to realize a profit. You will need front office personnel and a manager. Hiring individuals with experience will help ensure the business runs smoothly, particularly in the lean months. To attract seasoned professionals, be sure to offer attractive benefits packages.

Part 2 - Is a Walk-In Clinic business the right fit for you?

Part 3 - Action plan to launch your Walk-In Clinic business in 90 days