People turn to hospitals to get help. Either after an accident or as regular therapy. While for some, a hospital may become a last place of residence. Starting a hospital business is a big responsibility. All aspects of operations should be thoroughly planned.
Individuals with a medical background often establish hospitals. This doesn’t mean investors or the board of directors will share the expertise. An understanding of what a hospital is as an entity should be established. The term may refer to nursing homes, rehab centres, single-site institutions or hospital chains.
Healthcare entities may have a different scope of services provided. What they all have in common is patient care. Location plays an important role when establishing a hospital. Ease of access is essential, mainly if the hospital provides emergency services and uses ambulances for transportation.
The distinctiveness of the business
There are many distinctions in how each healthcare institution operates, for example:
- Based on the scope of services provided, i.e. OPD, emergency services, therapy
- Operations defined by a single site entity or a hospital chain
- Financial situation of potential customers
Before creating a document titled “business plan”, do extensive research. Examine as many hospital business plan samples as you can get your hands on. With a hospital, you cannot simply take a template to fill out and be done with it. Examining samples of business plans used in healthcare will help you understand the aspects which need to be covered. Analysing business models will help you define your business target mode of operation and set realistic financial expectations.
Most businesses write an aspiring mission statement. One to inspire. Behind it is the aim to gain profit. A hospital is no different. To operate, it needs to secure a stable financial turnover and profits. There may be variations in the mission statements of medical institutions. Some may include research or improvement of the well-being of the community. At the same time, others might focus on providing care to those who can’t afford it.
Patient payment methods for services
Getting healthcare is something an individual doesn’t plan. When a patient comes to your hospital, it is essential to identify a method of payment and coverage by insurance. Health insurance varies in coverage and costs. Some insurance policies cover up to 100%, while others restrict coverage to 80%. An insurance policy always includes a list of operations and therapy it covers. If it is unclear what your patient’s health insurance policy covers, it is best to contact them directly. Offered treatment may depend on what is covered by a patient’s health insurance. Your business plan should also include information about working with health insurance agents.
Understanding your target market
Your price formation, salaries and facilities depend on who your patient is and how they plan to pay for the services provided. A private clinic’s target market differs from a public hospital’s. It is essential to understand who your consumer is, his lifestyle, and income levels. Knowing your target market in detail will also help you plan your facilities. Like any other business, one of your aims is to satisfy your consumer’s needs. For example, a private clinic will focus on single occupancy for their patients. A hospital may offer rooms for multiple patients to lower costs. A health insurance policy might only partially cover expenses or limit the number of days spent at the hospital. Target groups with health insurance will seek a treatment protected by their policy. When opening a hospital, you must understand how your patients will pay for the services and treatments.
Choice of Location
Deciding on the location of a new hospital involves multiple considerations, each vital to ensure that the facility effectively serves the community and operates efficiently. Here are the most critical factors:
1. Community Needs: Assessing the community’s healthcare needs is crucial. This includes understanding the demographic profile, prevalent health issues, existing healthcare facilities, and service gaps.
2. Accessibility: The hospital should be easily accessible to most of the population it intends to serve. This includes considerations for public transportation routes, parking facilities, and accessibility for people with disabilities.
3. Population Density and Growth Trends: Analyzing current and projected population density and growth trends ensures the hospital can serve the community adequately now and in the future.
4. Emergency Services Access: Proximity to major roads and highways is essential for efficient ambulance services and emergency access.
5. Partnership Opportunities: Proximity to other healthcare facilities, universities, or research institutions can foster collaborations and improve the quality of healthcare services.
6. Environmental Safety: The site should be free from environmental hazards and have a low risk of natural disasters. Also, consider the impact of the hospital on the local environment.
7. Land Availability and Cost: There needs to be enough space for the hospital and its future expansion. Land cost is also a significant factor, especially in urban areas.
8. Zoning and Regulatory Compliance: The site must comply with local zoning laws and regulations, including those related to healthcare facilities.
9. Infrastructure: Adequate infrastructure like water supply, electricity, sewage, and internet connectivity is essential.
10. Workforce Availability: The location should have access to a skilled workforce, including doctors, nurses, and support staff.
11. Economic Impact: The hospital can have significant economic impacts on a region, including job creation and stimulation of local businesses.
12. Cultural and Social Considerations: Understanding the cultural and social context of the area is essential for ensuring the hospital is welcoming and respectful to the local community.
13. Transport and Logistics: The hospital must be able to receive supplies and manage waste efficiently. This requires good transport links and logistical planning.
Each of these considerations must be balanced against the others, and often, a feasibility study or a needs assessment is conducted to determine the optimal location. The decision-making process typically involves a multidisciplinary team, including healthcare professionals, urban planners, environmental experts, and community representatives.
Cost formation and transparency
Hospital bills often need to be clarified. The lack of transparency in how costs are generated has created a lack of trust in the medical industry. You can use this to your advantage. As part of the brand formation, consider transparency when developing the price list of your services. Transparency will help build trust with your target market. Cost formation directly depends on who your patient is and what kind of hospital you are.
What kind of hospital are you opening?
You have to know what kind of hospital you are opening to start writing a business plan. There isn’t a universal business plan for a medical startup. Opening a rehab will be different to starting an OPD practice. A lot of factors will have an impact on the structure of your business plan.