Starting a Medical Practice

Setting up a medical practice can be overwhelming, time consuming, and stressful.

Whether you are finishing up your residency (six to nine months from completing residency) or you have decided to start your own medical practice, it is essential to begin with a business plan.

What Should You Include in Your Business Plan?

Your business plan will give you a blueprint for making informed decisions and provide practical analysis of the strengths and potential threats you need to consider when setting up your practice. A business plan should consist of the following:

• Practice Summary: explains your business goals and how you will accomplish your goals.
• Physicians and Team Members: background, qualifications, and roles of each physician and non-physician team members.
• Services/Products: provide a detailed description of medical services you will provide and any medical/non-medical products you will sell. Also, include how your services will be unique, including the method by which you will deliver your services and products.
• Marketing Strategy: identify your type of patients/clients, market demographics, potential for growth, and other similar practices.
• Execution: provide, step by step, how you will market and implement your business plan with timelines.
• Anticipate Problems: identify any obstacles or delays that could occur and devise mitigating solutions for those hindrances.
• Financial Budget and Projections: have a detailed financial picture of the cost of starting and a five-year projection for your practice. Also, consider tax implications, estate planning, and expenses (lease, hiring staff, equipment/software/supplies, business insurance) in your financial data analysis.

A well-executed business plan can help alleviate the initial stress and worry of starting a practice. Bridging Legal Solutions can assist with your business plan as we help you navigate your legal and accounting obligations.

Professional Memberships, Licenses, & Advisors

Physicians wanting to practice their medical practices must require certain licenses and memberships. Such organizations include:

• Ministry of Health and Long-Term Care (MOHLTC)
• Canadian Medical Association (CMA)
• Canadian Medical Protective Association (CMPA)
• Royal College of Physicians and Surgeons of Canada (RCPSC)
• College of Family Physicians of Canada (CFPC)

Local medical societies

• College of Physicians and Surgeons of Ontario (CPSO)
• Ontario Medical Association (OMA)
• Ontario College of Family Physicians (OCFP) (for family physicians)
• College of Physicians and Surgeons of New Brunswick
• New Brunswick Medical Society

Advisor

Bridging Legal Solutions is a multidisciplinary firm which makes us unique. At a traditional law firm, you get legal advice of a lawyer. That’s it!

At Bridging Legal Solution, you get more! You get a team of legal and business professionals who come together to help you with your legal issues, accounting, and HR services. Get a team of experienced entrepreneurs that intimately understand your needs. Your practice will benefit from our holistic approach to your business.

A lawyer will provide advice on corporate structure, negotiation of agreements, drafting contracts, HR policies and handbooks, trademark (products/medical devices), and other legal issues and compliance requirements.

An accountant will provide advice on business structure, starting budget, taxation, cash flow, and investment options.

We also recommend having a financial advisor to help advise on financing options and risk management. It is also essential to have an insurance agent to advise you on the type of coverage you need for your office space, life insurance and other relevant insurance options.

We have a network of collaborative partners we can recommend to help you launch your medical practice with ease.

Medicine Professional Corporation (MPC)

If you are in Ontario and decide to have your own medical practice, you may choose to incorporate under the Ontario Business Corporation Act and Regulated Health Professions Act as a professional corporation. Usually, a physician that chooses a professional corporation structure, does so to benefit from a lower tax rate and to take advantage of tax deferral.

Requirements and Restrictions

There are several requirements and restrictions contained in the relevant acts which include:

• No one other than a physician may act as a director or officer of the MPC.
• Voting shares can only be held by physicians. However, non-voting shares can be held by certain family members of the physician shareholder or in trust for their minor children.
• There are restrictions on the corporation’s name and specific provisions in the professional corporation’s articles of incorporation (the governing document for the medical practice).
• MPC will require a certificate of authorization from the College of Physicians and Surgeons of Ontario (CPSO) to operate. MPC must also keep the CPSO informed of any changes in the name, articles, or its shareholdings.
• Liability: unlike a regular corporation, an MPC is not a separate entity. The physician shareholder will remain professionally liable whether a claim is made against the physician or the MPC. Remember, physicians will need to have CMPA coverage.

If you are in New Brunswick and decide to have your own medical practice, you may choose to incorporate it under New Brunswick Business Corporation Act and Medical Act as a professional corporation.

Requirements and Restrictions

There are certain requirements and restrictions contained in the relevant acts which include:

• Restrictions on the acceptable names available for the professional corporations. Generally, the name must state the term “Professional Corporation” or “P.C.” or otherwise reflect that they are practicing medicine. Corporations should include the physician’s name, or initials, or the geographical area in which they practice.
• Two-thirds of the directors of the professional corporation must be physicians. Voting shares must be held by licensed physicians or by the corporation controlled by licensed physicians. There are no restrictions on the ownership of non-voting shares which means shares can be owned by anyone.
• Liability: The physician shareholder will continue to be professionally liable whether a claim is made against the physician or the MPC. Remember, physicians will need to have CMPA coverage.
• MPC will require a certificate of authorization from the College of Physicians and Surgeons of New Brunswick to operate. MPC must also keep the college informed of any changes in the name, articles or its shareholdings.

Leasing Office Space

Once you have decided on a location for your medical practice, have us review your lease agreement before you sign it. We can help you negotiate terms that best suit your practice’s long-term goals.

During the negotiating period, it is easier to make amendments, however, once you sign your lease agreement, you are legally liable for complying with the terms of the contract.
Oral guarantees and assurances should not be relied on. A written lease agreement is essential because it defines the following but is not limited to including the conditions, responsibilities of the parties, renewal options, and duration of the contract.

Data Privacy Laws

Under federal law, medical practices are subject to the Personal Information Protection and Electronic Document Act (PIPEDA). Under PIPEDA, all Canada-based medical organizations save, use, and disclose PHI only during commercial activity.

The Personal Health Information Protection Act (PHIPA) applies to Ontario-based healthcare providers to ensure “reasonable steps” are taken to protect patent health information (PHI) during non-commercial or commercial activity.

In New Brunswick, the Personal Health Information Protection and Access Act (PHIPPA) provides obligations on how health providers in the province save, use, and collect PHI. Any breach of provincial or federal privacy laws will result in significant fines.

It is crucial measures are put into place in the use and collection of PHI to ensure security and compliance with the relevant legislation.

You will likely require several types of software that must comply with applicable privacy and data security laws. For example:

• Medical billing software;
• Virtual care software;
• Online scheduling and staff management software;
• Healthcare CRM; and
• Electronic Medical Record (EMR) which is a digital version of a chart with patient information stored in a computer;
• Electronic Health Record (EHR), which is a digital record of overall health information.

Human Resources

You may also need legal advice on how to post job descriptions, conduct interviews, and write an employment offer that does not cause discrimination complaints or other legal issues.

You will also need certain agreements and policies to avoid potential liability. A medical practice should have policies and procedure manuals for workplace safety, privacy and data security, employee handbook, and code of conduct to ensure compliance with regulations and applicable laws by all service team members.

Conclusion

Remember to breathe and take a moment to celebrate your decision to begin your own practice. Be proactive by planning ahead to make sure you are meeting all your business and professional obligations.

The information we provided is to guide you to consider what you will need to start your own practice. Having a detailed business plan and hiring the professionals you need with accounting, legal, and financial advice will streamline your process.

Our team at Bridging Legal Solutions can assist you and give you the peace of mind you need so you can focus on your patients and building your practice.

We also encourage you to consult your local medical colleges and associations for practice management and advisory services. For example, for marketing and advertising your practice in Ontario, you will need to consult the CPSO guidelines for advertising. Make sure you know your regulatory body requirements, guidelines, and professional conduct obligations.