Medical economics today are tough and finding areas to reduce fixed overhead can stabilize an existing struggling or new independent practice, keeping both sustainable during tough times. Doctors used to rely on insurance payments for the majority of their cash flow. However, in today's environment, many insurance reimbursements are being reduced or cut, neither keeping pace with inflation. Add to this that more and more patients are bearing a higher percent of financial obligation for their medical bills. To survive, doctors must become very efficient.
A large chunk of money is spent on rent. Are you maximizing your space's footprint and resources? If you have another clinic or rotation at another location, this means that your office, when not in use, is not producing revenue. By inviting others to share your space and resources, your fixed overhead expenses can be significantly reduced. What if you shared your medical space with a complimentary specialty? You could have an influx of new patients, establish a secondary referral system, and create more cash flow. This is in addition to subsidizing your rent! How about targeting doctors who are ready to set up shop but want to minimize the heavy front end investment and commitment? Depending on the personalities involved and the extent of the arrangement, this could also encompass the bonus of a mentor-protege relationship.
Legally setting this arrangement can be as simple or as complex as you feel necessary. Some doctors are under the impression that if they are sharing space then they are in a partnership. Absolutely not. The only "partnership" is the agreement to share space and in some cases resources. Recognize, however, that you will want to protect yourself by adding his or her name as an "additional insured" on your liability insurance. Having a written agreement signed by all parties as to what you will and will not provide in addition to rent fees and due dates is also very important. As with any arrangement, it is far better to spell out all items rather than leave it up to interpretation. If you plan on referring to one another, you may want a lawyer to give you some advice so you don't run afoul of Stark laws. For about $1,500.00 you can hire a lawyer with expertise in this area who can review your contract and give advice.
One way to figure out a fair and reasonable rent charge is to analyze your practice's expenses by category and as a percentage of revenue. When evaluating the potential doctor's share, keep in mind his or her practice size and specialty, as expenses will vary. Do not include your private overhead expenses such as car payments, mobile service, malpractice insurance, etc. Once you have your figures, divide by 30. This will give you a baseline for your daily overhead and the projected daily overhead.
Finding a doctor to share space (or locating medical space available) can be relatively painless with several online resources including medical journals, Craigslist, and word-of-mouth. Sites such as http://www.ShareMedicalSpace.com are exclusive to the healthcare industry and provide an efficient means to locate available opportunities. With powerful tools at your disposal, you are just a click away to reducing your overhead.