The Hidden Costs of Expanding Your Clinic

If your business is successful, you have the option to expand.

Ideally, a successful business will eventually consider expanding. For clinicians, this often means hiring new practitioners and opening another location. There are many questions that come with these types of decisions: Will the increased revenue outweigh the costs? Will I be financially better off at the end of the day? Are there enough customers? What hours should I be open? Is it in the right place? After getting a feel for the revenue potential we tend to look at the obvious costs such as rent, utilities, equipment and so on. Its consideration of the hidden costs that often determines if the expansion will be a success.

1. Moving Between Locations

If you or your staff will work in two or more locations, have you thought of the time and expense associated with moving between them? If the new location is completely staffed, you will still need to devote additional time to management of the new site.

2. Communicating Between Clinics

You will also have to consider the technology you are using. If you currently use a stand- alone system for scheduling, financial management or Electronic Health Records (EHR), should you simply duplicate the same systems in the new location?

Do the locations need to communicate with each other and will that increase your costs?
This is particularly important if your patients could go to more than one of your sites. This may be the case if you have specialized skills or equipment at only one location. I know of one clinic owner who spent $15,000 to connect her systems at two locations, and was never truly happy with the result; she is now looking at a new solution. When considering an expansion you should always investigate your current systems to make sure they are up for the challenge.

3. Additional Accounting Fees

One cost that is often overlooked in setting up a second location is the increase in accounting fees. If your current system must be installed in each location you may find that increases in cost and time are required to consolidate the results. This is particularly true if you cannot access the financial records from one central location. These costs can range in size from a mild annoyance to a truly significant cost. In time these costs can be more than the cost of upgrading to a newer, more flexible, system.

The Solution:

Today there are many options available to help you meet your needs. The advent of cloud computing has freed many companies from the cost of building and maintaining their own networks. A quick search will provide a range of accounting systems, schedulers and Electronic Medical Records (EMR) systems that you can choose from. They offer varying degrees of flexibility and ease of use and if they are true cloud based solutions, they free you from being tied to one location. The more traditional models still require a large license fee upfront followed by on-going maintenance payments. This may be difficult to absorb with all the other costs of setting up a new location.

Another approach is called Software as a Service or SaaS. In this model you rent software for a small monthly fee. It becomes an operating cost, like your phone bill, rather than a capital expenditure. Again there are many options available. You will probably find the lowest cost and easiest to implement is an integrated package containing a scheduler, financial management and EHR (or EMR). You should also consider if a new system will allow you to reduce overhead expenses. For example, can the staff in one clinic book appoints in all the others Or perhaps all of your billing could be done from one place

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