Estimated cost to open a physician (dermatolgy) practice including
breakdown in Tampa, FL?

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Request for Question Clarification by websearcher-ga on 16 Jul 2005 20:55 PDT

Hello mitch2904:

Thanks for the interesting - and challenging - question. I would very
much like to help you on this question. I've been doing some research
for you and have found some promising data - but I'm concerned that I
don't adequately understand exactly what it is you are looking for.

Some of my concern lies around what exactly you mean by "cost to
open". I have found data on what are called "start-up costs" or "set
up costs" for dermatology practices. However, even these articles seem
to treat differently what is/isn't included in such figures. Are you
strictly interested in what would need to be spent before a single
patient walks through the door (e.g., equipment, furniture, etc.) or
are you wanting an estimate up to the time when you actually start
collecting receivables for patient visits (say, e.g., 3-6 months into
the practice)?

Perhaps the best way to proceed is for me to share with you what I've
found already and then you can tell me what is/isn't on the mark and
what else, if anything, you want me to focus on.

The information I've been able to find so far points to the start-up
costs for a dermatology practice being in the $70,000 - $125,000
range. Here are the references I've uncovered:

Tips for starting a derm practice
URL: http://www.dermatologytimes.com/dermatologytimes/article/articleDetail.jsp?id=157740
Quote: "Dr. Yag-Howard explains that the financial investment of a
solo practice is significant ? $70,000 to $100,000"

Seed money: Getting the funds to grow a new medical practice
URL: http://64.233.161.104/search?q=cache:y12WCQ1QBWQJ:www.ama%EF%BC%8Dassn.org/amednews/2003/12/15/bisa1215.htm+%22dermatology+practice%22+%22startup+costs%22+&hl=en
Quote: "When Stephanie Mackey, MD, entered a bank and asked whether
she would qualify for a loan to launch a new dermatology
practice,...She secured a loan of $70,000 and line of credit of
$30,000 and was able to start her solo practice in Lancaster, Pa., a
few years later."

Academic Physicians Had Tough Year in?03, Says MGMA; Specialists? Pay Up
URL: http://64.233.161.104/search?q=cache:61Xo4CdblPEJ:aishealth.com/SampleIssues/samplepcr.pdf+%22dermatology+practice%22+%22set-up%22+OR+%22start+up%22+cost+-website&hl=en
Quote: "In several specialties with apparent shortages ofdoctors in
comparison to the patient load in local mar-kets, the ?barriers to
entry? for a physician to start a solo practice are relatively low,
Parshall says. For instance, henotes, the costs to set up a
one-physician dermatology practice are about $125,000 (mainly for
equipment and working capital)."

Going solo: Start-up basics
URL: http://www.memag.com/memag/article/articleDetail.jsp?id=111376
Quote: "The cost of launching a practice depends on your style and
whether you build up overhead slowly or all at once. Consultants'
estimates?which include costs for rent, payroll, insurance, and living
expenses for the first few months?range from $70,000 to more than
$100,000 for a small primary care practice. At the high end, notes
Tuttle, you can spend $50,000 to $65,000 on furniture, equipment,
copiers, computers, and telephones."
Note: These figures are not for dermatologists in particular - but
many of the stated costs would be the same.


Depending on the specifics of what you are looking for, the location
of your potential practice may or may not be relevant to the general
cost estimate. Please let me know what you think about what I've found
thus far and we'll continue from there.

Thanks.

websearcher

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Clarification of Question by mitch2904-ga on 17 Jul 2005 06:14 PDT

Good Morning, 

Thank your well thought presentation and most importantly your request
for specificity.  I appreciate the nature of your question and
definitions are indeed very important.  Your articles are excellent
but for the purpose of this request I am seeking the day-to-day cost
of running a two physician operated dermatology office.  I believe I
have a good handle on leasing costs and the preliminary cost prior to
opening our office but I am seeking additional information regardng
annual operating expenditures such as number of staff, salaries,
billing systems, advertising, insurance, dues, convention expenses,
etc; to better validate the appropriate capital necessary to sustain
the operation once it is up and running.  I hope this helps?

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Request for Question Clarification by websearcher-ga on 17 Jul 2005 06:52 PDT

Hello mitch2904:

Thanks for the clarification. What you want is very different from
what I gleaned from your original question.

I've done some more intense searching for you, but I'm afraid I've
come up almost empty. There don't seem to be any online resources to
estimate the annual costs of operating a two-person dermatology
practice.

However, I did find that the AADA (American Academy of Dermatology
Association) is currently running a survey to find out just this
information.

Derm Coding Consult - Fall 2004
URL: http://www.aad.org/NR/rdonlyres/67BCEC1F-83AE-4DC9-A241-99B649CEA864/0/DermCodingFall04.pdf
Quote: "The Board of the American Academy of Dermatology Association
has authorized and urges dermatologists to participate in a telephone
survey the AADA is conducting to determine the practice expenses
incurred by owning and
operating a dermatology practice....In this survey, the AADA will be
collecting information about you and your practice, including practice
expenses, hours worked, and participation in Medicare. No
information regarding income will be collected."
Note: Article "Academy Authorizes Practice Expense Survey of Members"
starts on page 1 and continues on page 7"

Perhaps you could contact this organization and see how/when they plan
to publish the survey results to the dermatology public.

Contact Us
URL: http://www.aad.org/aad/contactus.html

I hope this helps. Perhaps another researcher can find more specific
information where I have failed.

websearcher