As clinicians, nurse practitioners (NPs) evaluate patients, order and interpret diagnostic tests, diagnose and treat conditions, and prescribe medicines — independently or with varying degrees of physician oversight, depending on state laws. About 20 states and the District of Columbia authorize NPs to operate independently, in what is called a full practice environment.
As more states consider whether to give full practice authority to NPs, more NPs will consider the benefits of launching their own healthcare businesses. The requirements include not only clinical preparation but also business savvy — understanding the financial, technological, and administrative aspects of starting and running a business. To learn more about how to start a healthcare business, nurses would do well to seek advanced education from programs such as an online Doctor of Nursing Practice.
Developing the Skills to Start a Healthcare Business
To become NPs, nurses complete advanced degrees and acquire expertise in clinical and evidence-based practice. Their education includes conducting research and developing treatment strategies. NPs must also meet national standards in clinical education and pass a national NP board certification exam, according to the American Association of Nurse Practitioners (AANP).
To run a business in a state that grants NPs full practice authority, NPs must be prepared as both clinicians and managers. Full practice authority means that NPs can “evaluate patients, diagnose, order and interpret diagnostic tests, and initiate and manage treatments — including prescribe medications — under the exclusive licensure authority of the state board of nursing,” according to the AANP. NPs investigating how to start a healthcare business should understand their states’ licensing requirements.
Advanced practice nurses looking to launch their practices should be strong leaders and compassionate communicators; they should also be detail oriented. Enrolling in a Doctor of Nursing Practice (DNP) program can help them to acquire these essential skills.
Entering the Business of Healthcare
Starting and running a successful healthcare practice requires several strategic steps.
Before starting a business, an NP must consider how to finance the costs of acquiring medical equipment and renovating an office. Other business expenses include payroll, supplies, professional services (such as accounting and marketing), and taxes. Insurance reimbursements for healthcare services are often delayed, so the practice may also need financing for cash flow requirements. A solid business plan can help NPs to show the promise of their medical practices to lenders. Loans may also be available for practices looking to expand their service offerings, like including a diagnostic lab in the practice. The following are examples of lenders NPs can turn to for help with funding:
- Traditional lenders. Banks and similar institutions can offer long-term loans for significant investments, such as acquiring another practice or purchasing a building. Loan application processes can be lengthy: Banks typically require a clear business plan and documentation of income.
- Small Business Administration loans. Government guarantees for Small Business Administration (SBA) loans encourage banks to lend and make it easier for businesses to qualify. Proof of income is required.
- Alternative lenders. If the practice needs less money but needs it quickly, alternative lenders may be an option. A borrower may only need to show three months of bank statements and verifiable income to qualify. These loans may have a higher interest than traditional loans.
Building the Practice
A quality practice needs proper administrative staff to ensure accurate scheduling of appointments and effective management of paperwork. When hiring clinical staff, NPs must assess how patients would respond to a candidate. Providing real-life scenarios to a candidate during a face-to-face interview may help to determine if the candidate is a good fit for the practice. For more insight, an NP can ask a job candidate to spend a paid day on-site.
Building a practice requires modern equipment and tools, such as an electronic health record (EHR) system. Other considerations include third-party medical billing services and credit card processors.
A necessary step to take before opening the practice includes incorporation and obtaining an employer tax ID number. Incorporation helps to protect an NP’s nonbusiness assets.
NPs must also go through a credentialing process with payers. This can take several months and involves a review of work history, proof of malpractice insurance, and verification of hospital privileges.
To efficiently run an office from the beginning, NPs must have in place policies and procedures for all staff involved in crucial elements of the practice, such as interacting with patients and getting paid for services rendered. NPs also need to ensure that documentation of regulatory compliance is up to date.
After the Practice Is Open
By refining processes and procedures and ensuring accountability at all levels, an NP can improve the way a practice operates. Hiring an experienced, trustworthy office manager can go a long way toward helping the NP achieve this aim.
As clinicians and business owners, NPs must remain current on regulations, payer rules, and government healthcare policies, all of which are evolving. The practice must also market its services to potential customers, through methods such as referrals and social media campaigns.
The Future of Nurse Entrepreneurship
NPs are critical thinkers and resourceful with delegation and leadership competencies: These traits can help them in their entrepreneurial pursuits. Potential healthcare-related opportunities include serving as consultants. In healthcare consulting, they help to interpret medical information for patients. They can also consult other nurses and help to guide them on complicated diagnoses and treatment.
Nurses seeking to grow their business networks can do so through organizations such as the National Nurses in Business Association (NNBA), which hosts conferences, workshops, and events throughout the year.
Nurse entrepreneurs in the states that require advanced practice nurses to have a consulting relationship with physicians can leverage that experience to transition to entrepreneurship. As more states grant advanced practice nurses independent practice authority, nurses with an entrepreneurial mindset can be ready to launch their own practices.
Own a Healthcare Business
Amid the transformative changes in healthcare, NPs are asked to take on an increasingly important role. Advanced education can help students to build the clinical and business acumen they need to practice independently. DNP studies can provide graduates with expertise in evidence-based practice, organizational behavior, quality improvement, and relevant technology. Explore how Maryville University’s online Doctor of Nursing Practice program can prepare you to lead an independent practice and optimize patient outcomes.