Opening a new ophthalmology practice is an exciting and daunting task. However, ophthalmology, as a surgical subspecialty, is a unique field with a sizable clinical basis.
This affords us the ability to have our outpatient clinics and ambulatory surgical centers (ASC) and allows us to create something truly unique with our brand for our patients. In an era of many medical consolidations, private practice is still surviving and thriving.
As someone who recently opened an ophthalmology and wellness practice, I am here to break down the process, share the most valuable lessons I learned, and provide you with a practice checklist.
First, assess goals and address obstacles.
To start, take the time to consider the “why” you are compelled to open your own practice; do this at length and thoroughly. Write down your reasons for starting a practice.
Potential reasons for starting an ophthalmology practice include the following:
- You crave more freedom over your time.
- You want more control over how you practice.
- You have the desire to bring certain technologies into a clinic.
- You’d like to offer a new line of services.
- There is a niche in your community you’d like to fill.
Tip: When things are getting tough and challenging, use these “whys” to remind yourself why you chose this route.
Download the Opening an Ophthalmology Practice Checklist
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Opening an Ophthalmology Practice Checklist
Use this cheat sheet with checklists and itemized budget/equipment lists to facilitate the process of opening your own ophthalmology practice.
Second, envision your dream practice and patients
For my practice, I knew I wanted to spend more time with my patients, which meant lowering my clinical volume. I also knew, to start, I wanted to be the sole provider and knew I would be low volume as I grew my referral network.
Ask yourself the following six questions when opening a new ophthalmology practice:
- What does my perfect practice look like?
- How many patients do I want to see a day?
- What types of procedures and services am I interested in providing?
- Would I prefer to have optometrists and partners or be solo?
- How many days a week would I like to work?
- Where (considering geography, population, and setting) would I like to work?
Next, think about what kind of patients you want to treat
Here you must consider factors such as:
- Will you be seeing subspecialty patients (glaucoma, pediatrics, retina, etc.), or will you do a combination of general ophthalmology and a subspecialty focus (ex., refractive and cataract)?
- What do your patients need the most?
For example, as a medical retina specialist, my patients need to get in and out of the office for their injections as soon as possible, as they typically have other doctors' appointments or rely on someone to drive them. Lastly, and perhaps most important, answer this question: What do I want as my practice identity and mission?
This is your chance to create your vision for your practice that will carry you, your staff, and your patients forward.
Existing ophthalmology practice or brand new?
One of the biggest decisions you must make is whether you will buy an existing ophthalmology practice or start anew. There are pros and cons to each choice.
Buying into an existing practice
Pros:
- Less initial overhead as much of your equipment and staff is likely in place.
- Built-in referral network, as the primary care doctors and optometrists previously referring to the old practice owner will likely continue to send you patients.
Cons:
- You may have to work on fixing up older equipment and may not have the newest technology on hand.
- There may also be “poor” habits in place regarding how the staff has been trained and the culture of the practice.
- It may take time to re-write the vision you have and implement it in your practice and staff.
Taking these factors into consideration, let’s look at starting fresh, which has its advantages—and disadvantages—as well.
Opening a new practice
Pros:
- Create your office to look and feel exactly how you want.
- Hire staff and train them in the way you envision.
- Typically, buy new or lightly used equipment.
Cons:
- The financial considerations of starting fresh are significant; typical startup costs are between $300K and $500K.
- Clinically and surgically, you will be lower volume for some time while you build up your referral basis.
Tip: If buying a practice, I recommend working with a seasoned ophthalmic consultant to receive an accurate valuation of the practice. Along the lines of starting from scratch, I recommend assembling a strong legal and financial team to help steer you in the right direction as you lay the groundwork financially for your practice.
Next step, assemble your dream team
Before the opening of your practice, you will want to assemble a team that can guide you, advise you, and support you. Everyone’s team will look different, but here are a few key members I found invaluable and you may choose to include.
1. Business consultant(s)
These professionals can help you with payor contract negotiation, billing optimization, operations, and financial setup. In addition, a business consultant can offer advice on regulatory-related issues, make “best practice” recommendations, and help navigate the myriad of practical challenges associated with operating a business.
They can also help with a market analysis to determine if the location you are considering has needs for your services.
2. Attorney
I would highly recommend getting a good attorney. Ask around from friends, family, and colleagues—you want someone with a great reputation. You want to set up your practice the right way from the start. They can help you establish your practice as an LLC, S-Corp, or L-Corp.
They can also help you review real estate contracts or contracts with potential landlords. Moreover, they can advise you on what regulatory items you need to have that might be state-specific and help you draw up your patient contracts.
3. Accountant
Finding a savvy and medical practice-oriented accountant is also key. They can help you in setting up your pro forma, business loan application, tax preparation, and your profit-loss statements once you are up and running.
4. Marketing experts
A marketing team will be key in setting up a good website with good visibility and search engine optimization (SEO). Once you are open, your marketing team can help with running ads, PR pieces, digital marketing strategies, and creating rack cards and business cards.
5. Realtor
Finding your location, which I will discuss in depth later, is one of the most important things you will do in setting up your practice. A realtor can help narrow your search and negotiate items in your lease.
6. Career coach
Yes, a career coach. Starting a practice is a practice in mental health—especially when overcoming your own personal and professional doubts. I worked with a career coach and highly recommend it to anyone who feels they are at a point in their life where they are trying to make decisions but are stuck or wavering.
Through a career coach, I gained help in learning how to master my thoughts—both positive and negative—and it helped me with my indecision regarding whether to start my practice.
Tip: Starting a new medical practice means you are now an entrepreneur, and with that comes a different set of skills and mindset that a career coach can help you adopt.
7. Friends and family
You also want to draw in your friends and family to be your support system. Trust me; you will need cheerleaders during this time to champion positive moments or events, plus folks to vent to and to lift you up when met with unexpected challenges.
6 steps to opening your ophthalmology practice
1. Establish a corporate entity
Typically, your legal and accounting team can advise you on how to set up an LLC vs. S/C Corp. You will need to get an EIN/Tax ID as well.
2. Establish a budget
This can be tricky because we are typically not given the tools to understand pro formas and other accounting reports.
A pro forma is an excel document that anticipates your expected costs and revenue monthly and yearly. It is a great way to project costs, and you will eventually need it to secure a loan.
Some costs you will want to anticipate for your new ophthalmology practice:
- Rent
- Utilities
- Equipment (covered later)
- Office supplies
- Medical supplies
- EMR/technology costs
- Data storage facility cost
- Postage
- Janitorial costs
- Phone
- Fax (key in referral and co-management)
- High-speed internet
- License renewals (medical, state drug and substance, DEA)
- Malpractice insurance
- Business insurance
- Website development and maintenance
- Consulting fees
I recommend speaking with other colleagues who started their practice. I had some wonderful resources who shared their pro forma with me.
3. Find a space
Location is key!
When finding the ideal location for your practice, consider the following:
- Geography
- Patient payer population: What does the payer mix look like in this area? Does it offer a mix of commercial, Medicare, and Medicaid?
- Competition: Are there other ophthalmologists, optometrists, or specialists like yourself in this area? What does the referral landscape look like? Is it already saturated with ophthalmologists? Is there the potential for built-in referrals close by?
- Physical space: For a solo practice, you may only need 1,200 to 2,000 square feet, but for multiple providers, you may need more exam rooms and space. Ideally, you would find a medical space (compared to retail spaces) for the following reasons.
- Medical spaces: Make sure that medical spaces offer built-in sinks in the exam rooms and provide easy patient access (consider elevator/stair access and parking considerations). Oftentimes medical spaces have good visibility, with other medical practices close by.
Tip: If you have current or future aspirations to build more on a particular lot, such as adding another level or expanding the footprint, make sure there is space and proper zoning to do so ahead of time.
4. Secure a loan
The financial considerations when opening a practice are tremendous. Typically, it will take $300K to $500K+ to open a new practice, given how expensive ophthalmic equipment can be.
Finding alternative sources of income for financial stability, such as doing locum tenens or moonlighting, can make the financials seem less daunting.
5. Choose communication carriers
Once you have a location, set up your email, phone, and fax. You will want to find a HIPAA-compliant email platform (ex., Outlook or Google Workspace).
Voiceover internet protocol (VoIP) phone lines are more popular today (ex., Spruce or Ring Central). Doximity offers free faxing capabilities for physicians.
6. Buy equipment
Find refurbished pre-owned equipment when possible. Consider working with local ophthalmic equipment suppliers, such as Premier Ophthalmic Services or Walman Optical.
Prioritizing your equipment needs
Make a wish list, and then prioritize. For example, as a retina specialist, having a solid optical coherence tomography (OCT) machine was important to me. I also wanted to offer in-office laser treatments, so I prioritized my favorite imaging systems and laser equipment. Will you be performing in-office LASIK? Cataract surgery? Minor procedures? Consider the equipment and tools needed for each.
Consider splurging on items that will help with the efficiency of your practice for both you and your patients. I decided to splurge on ultra-widefield (UWF) photography which is one of the most important tools for a retina specialist, as it captures the retina via image capture montages and angiography.
This not only helps me, as the doctor, understand the patient’s disease state but also helps educate the patient with photos and, lastly, also to document.
Here is a list of equipment to get you started at your new ophthalmology practice:
Lane Equipment:
- Slit lamp ($7000 to $15,000)
- Tonometer ($1000 to $1500)
- Chair ($5000 to $10,000)
- Stand ($4000 to $7000)
- Phoropter ($3000+, $8,000 to 10,000 for digital versions)
- Visual acuity chart ($1200+)
- Muscle light ($300)
- Retinoscope ($300)
- Wireless indirect ($3,000 to $4,000)
- Computer/monitor ($1000+)
Testing Equipment:
- Autorefractor ($6,000 to $10,000)
- Autolensometer ($2,000 to $4,000)
- Biometry ($40,000 to $70,000)
- Topography ($8,000 to $12,000)
- Optical coherence tomography ($40,000 to $70,000)
- Visual field ($8,000 to $10,000, consider the virtual field option $200/month)
- Fundus photography ($40,000+)
- Fluorescein angiography ($60 to $120,000, typically includes fundus photography as well)
- Pachymeter ($2,500 to $3,000)
- Tonopen ($2,500 to $5,000)
- B-scan ultrasound ($2,000 to $6,000)
Tips:
- Used equipment is typically as good as new once refurbished, so don’t avoid buying used slit lamp chairs, stands, and scopes.
- When possible, find equipment that might have the ability to “double up” at a reasonable price. For example, there is some UWF equipment with the ability to perform fundus photography, OCT, and fluoresceins/indocyanine green angiography (ICG)/fundus autofluorescence (FAF).
- Always negotiate and try to bundle equipment purchases!
6. Select an electronic medical record (EMR) provider
EMR is a huge consideration as well; when starting, I recommend going as lean as possible and avoiding signing lengthy contracts with expensive EMRs. These programs can help make your day more efficient with charting, uploading photos, and faxing letters to referrals.
The more these bells and whistles an EMR offers, the more expensive it can be. I have used Nextech in the past and loved that it combined functionality with efficiency.
For my new practice, I couldn’t justify the cost of an expensive EMR, nor did I want to sign a 3-year contract. I chose to use Office Ally for now based on recommendations from other ophthalmology colleagues. It is basic, gets the job done regarding charting, and is only $40/month without a contract. I also use Doximity since it is free with a physician profile for faxing chart notes to other ophthalmology providers and my optometric referral network.
Insurance policies to purchase for your new ophthalmology practice
There are two main insurance considerations: the insurance you need as an ophthalmologist to conduct business and deciding if or which insurance you will accept from patients and credentialing accordingly.
There are various types of insurance you will want to consider acquiring before opening the doors of your new practice.
Malpractice insurance coverage
Also known as professional liability insurance and errors and omission insurance, malpractice covers the costs of lawsuits from patients that claim physical, mental, or economic injury due to negligence or improper care on the part of your practice.
If you are leaving a practice, you will also have to consider if your tail coverage is covered by them or if you will have to pick it up. Typically if you are leaving a practice to start your own, you will have to pick up your tail coverage to cover any “prior acts” or previous claims.1
Property insurance coverage
Exactly as it sounds, property coverage insures your property and covers damages to the actual building as well as equipment, furniture, fixtures, and other contents at your office.
Depending on your location, make sure your policy covers all potential perils (i.e., fire, flooding/mudslides, snowstorm/ice, windstorm, hail, and tornado). Also, theft and any damage resulting from a riot or civil unrest should be covered.1
Business interruption insurance
This is an add-on to your property plan that will compensate you for lost revenue, income, and the cost of operating expenses incurred if you are forced to close your doors due to a natural disaster.2
Tip: To save on costs, consider choosing a Business Owners Policy (BOP), which bundles general liability and property insurance.2
General liability insurance policies
This insurance will cover third-party risks such as bodily injury and damaged patient property, as well as advertising injuries (e.g., libel).1
Workers’ compensation insurance
Companies that have a certain number of employees are often required to carry workers' compensation insurance; check your state’s site for details.
Worker’s compensation is designed to protect you and your employees in the occurrence of on-the-job injuries and includes compensation for medical expenses, lawsuits, and disability benefits.2
Cyber liability insurance
With the advent of our increasing reliance on both local practice and remote (i.e., data storage houses), one of the newer forms of insurance you may want to purchase is cyber liability coverage.
This can protect you in the case of cyber crimes or oversights, such as security breaches, ransomware, hackers, and identity theft. It will also potentially reimburse forensic investigation, ransom, credit monitoring services, lawsuits, and website security costs.1
The insurance question: To accept or not to accept?
Aside from insurance that covers you and your practice, you will also want to consider whether you will accept insurance, and, if so, what insurance panels would you like to be on.
Due to red tape/paperwork fatigue and declining reimbursements, doctors across the spectrum are choosing to opt out of insurance and adopting either a direct-pay or concierge business model, where the patient pays out-of-pocket or with a combination of a monthly membership/direct pay.
If you do choose to accept insurance, there are a multitude of panels from which to choose, including Medicare, Medicaid, and commercial providers. In order to choose which payor you want to accept, consider your patient demographic, target market, offerings, reimbursement rates, and service terms.
Tip: The credentialing and contracting process is a time-consuming process and can take up to 6 months. For this reason, many practice owners hire credentialing services to complete the process for them. In addition, you will want to look into hospital privileges and surgical center privileges/credentialing.
Marketing your new ophthalmology practice
Create your brand through your vision and voice. Branding is your way of showing who you are and what you do with a consistent theme and appearance. It serves to give instant recognition of you and your practice.
1. Establish the look of your brand
Work with a marketing team to create a name, mission statement, logo, colors, and fonts for your marketing materials and website. For ideation, my team helped me come up with potential names.
I wanted something that signaled and projected a future with better eye health. Thus, envision Ophthalmology & Wellness was born. Once we settled on a name, the marketing team helped develop my logo, again supporting my theme of a brighter and healthier future vision.
Figure 1 is the logo of the author’s ophthalmology practice.
Figure 1: Courtesy of Shanika Esparaz, MD
2. Launch your website
A website is your landing page on the internet. Many patients will refer to your website for information about you, the services you provide, and your contact information. Think of your website like a live business card.
Websites can run between $800 to $5000+ depending on your desired features. You want to make sure it is well-structured for SEO and gives you good visibility.
Tip: I considered making my website, which some doctors have on Wix.com. I knew I wanted mine to be professional and functional, so I decided to budget for a professional website developer.
3. Order marketing materials
Purchase print materials, such as business cards and rack cards. These should include a little bit about you, what services you provide, and your mission, as well as contact information.
Remember to take these with you on business-to-business visits to pass out to potential patients and leave them with office managers in ophthalmology and optometry settings, along with other subspecialty providers such as endocrinologists, rheumatologists, and primary care.
Building a patient base for your new ophthalmology practice
Creating a good referral basis will be key early on. Once you open your doors, your clinic and surgery schedule will be slow as you develop your referral networks. Use your time wisely in the beginning to create relationships in your community.
Consider the following for building your patient base:
- Take treats and your business cards to optometrists, primary care doctors, endocrinologists, and other ophthalmologists.
- Reach out to local magazines for press coverage; you can propose a guest column or blog on eyecare topics.
- Approach health clubs and offer to give talks about eye health to spread the word about your practice’s offerings.
- Connect with your local Chamber of Commerce and Lions Clubs to access great resources for advertising and help with organizing a ribbon-cutting ceremony.
Clinic policies and procedures for your new ophthalmology practice
Before opening, make certain to put together all of your clinical policies and procedures.
For your new ophthalmology practice, you will need to create the following:
- Patient contracts and new patient paperwork: these include new patient forms detailing their demographic and insurance information, your practice’s privacy policies, and release of information forms.
- Financial policies detailing expectations regarding your practices’ billing and collections procedures.
- Consent forms for various procedures that you perform, including lasers and surgery.
- Employee manual and handbook detailing policies and procedures for employee conduct such as uniform, scheduling, vacations, calling off, professional expectations, etc.
How to hire staff for your new ophthalmology practice
I emphasize staying lean at the start. Consider learning how to do all the aspects of your practice before hiring staff. If something breaks, you will want to know how to troubleshoot. Learn how to use your imaging machines, handle prior authorizations, and order medical supplies.
In the beginning, cross-training will be key to keeping your staff lean. The first staff member you should consider hiring is a practice manager who can manage both your front and back office—bonus if they are a cross-trained technician and can help work up patients or do ancillary ophthalmic testing.
Once you get busier, contemplate adding a billing specialist, receptionist, and ophthalmic technician. In addition, scribes or virtual assistants are incredibly valuable in helping with ancillary patient tasks and charting.
Enjoy the process!
Opening an ophthalmology practice is a journey. Similar to home ownership, the work is never quite done; it’s always a work in progress. Learning how to set up work-life boundaries for yourself will be important as taking time to enjoy and take pride in what you are building.
Pitfalls to avoid when opening a new ophthalmology practice:
- Stay as lean as possible initially: Avoid overspending upfront on expensive and new equipment you may not use. Instead, buy used/refurbished equipment.
- Keep a lean staff: Only hire essential staff at the start. Consider initially learning to do everything yourself- from answering phones to fixing the OCT machine. Once you feel comfortable running your practice, hire an office manager who can be cross-trained as a technician to help.
- Learn how to do your own marketing on social media: Marketing is important when starting a new practice to showcase your brand and attract new patients. It can be expensive, so consider learning how to do digital marketing, such as Facebook and Instagram, on your own.
Closing thoughts
I hope this article provides a helpful checklist for you as you consider opening your own private practice. Know that it is possible, and you are not alone. What you create is something uniquely yours, and you get to deliver patient care in a way you can be proud of.
