PRACTICE MANAGEMENT

Goodbye group, hello solo -- with little or no help from your (former) friends

What it takes to set up a new office.
The joyous freedom to make your own mistakes

Totting up the costs Leaving the comfort of a group to strike out on your own can be jarring financially. Here's a checklist of expenses you're likely to incur before you're fully up and running. Remodelling -- If you're starting from scratch you probably should get some professional planning help. Be generous and allow for expansion. Cramped facilities can be counter-productive. Budget about $5,000 for a professional planner. Computers, printer, scanner -- Plan on a minimun of three machines. Budget about $1500 each and allow another $1500 for software. Tip: Purchase them though a consultant who will get you the right equipment at a fair price and charge you by the hour to set up and troubleshoot. Electronic patient record system -- Again, get advice but do go electronic. Allow $2,000-3,000. Bookkeeping system -- Let the same adviser help here. $1000 should do it. Telephone system, Fax machine -- Spend up to $1,500-2,500 on a good multi-line system with electronic answering and forward. Use an office phone supplier. Office furniture, lighting -- An interior designer will make the place look spiffy but expect to pay $200 to $500 an hour, plus whatever they buy on your behalf. The sky's the limit. Medical equipment -- You know what you need and what it will cost -- $2,000 up. There will doubtless be other expenses, but that should get you started.

A year ago, in late fall, an Ottawa-area rheumatologist decided to leave group practice. It was an acrimonious separation. His partners brought suit. The case is still wending its way through the courts and may not be heard for a year or even two. Given the circumstances, you'd think Roger Leblanc (not his real name) would be a bitter man and you'd be wrong. "The situation had become intolerable. I'll never forget the relief I felt the day I knew in my heart it was over, that I was going to leave. To tell the truth, I've been too busy to think much about it," adds the affable 47-year-old, with a raised eyebrow.

What's kept Dr Leblanc burning the midnight oil is the ins and outs of setting up his own solo practice. "It's been quite remarkable," he says, "So many details and such great fun. Everything old is new again, like they say in song. Really, I feel the way I did when I first graduated. Fresh, you know."

Part of the reason he feels so positive is that he found a new office before he pulled out. "We were on the second floor of a suburban mall and I found it sterile right from the start -- but groups make decisions by consensus. When I became a consensus of one I was able to purchase a small Victorian house near where I live, and had it converted into the perfect office for one. The day I left, I literally packed up at the group and an hour later was unpacking in my new spot."

Helping with that unpacking was his nurse receptionist who decided to leave with him. "She's been a huge help," the doctor enthuses. "Really, I couldn't have done it without her."

Others who've gone solo concur. A GP who left group practice in Vancouver to set up shop in Burnaby, BC says, "Had my office assistant made the move with me it would have made all the difference. I can't tell you what a mess I got myself into. I knew nothing about how the group was actually run. For the first four months I just stuck records into a filing cabinet and tried to forget about them. Don't even ask about my billing records." In the end he hired an out-of-town management consultant who charged almost $12,000 in fees over the next six months to sort out the mess and organize the practice properly.

Even with careful planning, Dr Leblanc found setting up expensive. "When you're in group practice, you take a lot of things for granted. Take, for example, a copier. You need a really good one. An acquaintance in business suggested I purchase one of those new units that hook up to a computer and combine a fax, a copier and a scanner. I took his advice and regretted it. Even a computer technician my friend sent over couldn't get it to work. I spent almost $15,000 just in electronics. The copier alone came to over $3,500 and I needed three computers."

In all, the doctor puts his start-up costs at about $40,000 excluding renovations to the building.

Practice consultants suggest that setup costs can run as high as $70,000 or even $80,000. Other items the experts tick off is business owner's insurance, $2,000-3,000 a year and a policy that will pay operating expenses if you're unable to work. The cost will, again, come in at around $2,000. That does not include personal disability, which you'll also need if you don't already have it. The annual premium will depend on your age and your income.

On the employee side, you'll need an outside bookkeeper to keep track of practice revenue and expenses and to file the various tax and payroll deductions forms. Consider offering employees extra health insurance and, possibly, dental insurance. Although these may seem like icing on the cake when you're setting up, they can be important incentives to those employees you hope to attract to your practice.

Your staff is your most important practice asset -- the better they are, the more smoothly your practice will run and the better your own practice life will be. Finding the right people isn't easy. Classified ads or the increasingly popular method of finding people -- running an ad on one of the internet services -- will bring dozens, perhaps even hundreds of responses. Combing through them can be a nightmare. A Toronto psychiatrist solved the dilemma by hiring temps through an agency until she found someone she liked and then offered him a full-time job -- not a bad way to go, suggest the experts. Dr Leblanc, of course, brought his assistant with him. Some, including his former group practice colleagues, might call it stealing. The doctor points out that she came of her own accord. Raiding other offices is a tried-and-true method for filling vacancies. The downside is raiders tend to get raided themselves when the competition is looking for staff.

In the end, the question of whether to go into solo practice is a highly personal one. For the Ottawa specialist the decision was clearly the right one. Dr Leblanc's sums it up: "I never liked having others making decisions that would affect my life. Solo practice gives me the freedom to make my own mistakes," he says with a smile, "and that's something I like very much."