When making a decision to establish a new private practice, there are some key questions one needs to ask in order to make the best business decisions.
Health Insurance Plans/Payer Mix Questions You Need to Ask and Answer
What payer mix might you expect in the community? If the area has a high percentage of children on Medicaid, are the state’s rates reasonable and profitable? Similarly, are the State Children’s Health Insurance Program (SCHIP) payments acceptable? What are the major private insurers, and how well do they pay? Ask other pediatricians if they have had particular difficulties dealing with certain programs or insurers. The AAP Section on Administration and Practice Management (SOAPM) can be superb sources for information and feedback. If considering a cash-only or concierge practice, are there enough families to support this venture? Are there many military families in the community, and will there be any issues contracting with Tricare? (Tricare will usually not allow private pediatricians to be primary care physicians if there is a military base nearby.) Contact the state medical society for information on payer mix and the business climate within the area.