Advanced Practice Nurses: Developing A Business Plan for an Independent Ambulatory Clinical Practice

Joyce E. Johnson, PhD, RN, NEA-BC, FAAN; Wendy S. Garvin, MSN, APRN-BC, RN

Disclosures

Nurs Econ. 2017;35(3):126-133. 

In This Article

Abstract and Introduction

Introduction

BUSINESS PLANNING IS an essential business tool for entrepreneurs – a best practice approach for those interested in developing a small business such as an ambulatory clinical practice. Translating business planning efforts into a properly prepared business plan remains an undisputed, effective necessity in any entrepreneurial endeavor (Sherman, 2016).

For today's advanced practice nurses (APNs) with an eye toward innovation and independence, a new story is unfolding in an exciting era for these expert nurses. Sparked by the Institute of Medicine's (IOM, 2010) landmark report, The Future of Nursing: Leading Change, Advancing Health, which emphasized the contribution of nurses to "…building a health care system that will meet the demand for safe, quality, patient-centered, accessible, and affordable care" (p. 1). APNs have begun enjoying a wider practice scope and establishing their own standalone ambulatory practice centers (American Academy of Ambulatory Care Nursing [AAACN], 2017; IOM, 2010; Yee, Boukus, Cross, & Samuel, 2013).

According to the American Association of Colleges of Nursing (AACN, 2017), there are four categories of APNs: nurse practitioners, certified nurse-midwives, clinical nurse specialists, and certified registered nurse anesthetists. In at least 45 states, APNs can prescribe medications, while only 16 states have granted APNs authority to practice independently without physician collaboration or supervision. In states where this independent practice is not allowed, APNs must practice under the auspices of a doctor or a medical institution. However, APNs are authorized to receive Medicaid reimbursement. In December 2016, the Department of Veterans Affairs granted three of the four APN roles (nurse practitioners, certified nurse-midwives, and clinical nurse specialists) the ability to practice to the full extent of their education and training. While the new policy excluded certified registered nurse anesthetists, current efforts to include this valuable cohort advances the progressive national trend to enable nurses to practice to the full extent of their education and training.

In addition, population growth and the aging of the U.S. population have substantially increased demand for primary care providers amidst a growing shortage of primary care physicians (Carrier, Yee, & Stark, 2011; Van Vleet & Paradise, 2015). In this environment, APNs find a fertile terrain rich with opportunities and an invitation to enter the world of small business. While such opportunities can help nurses to practice to the full extent of their skills and licensure to improve American health care (Johnson et al., 2012; Wilson, Whitaker, & Whitford, 2012), few APNs understand the regulatory, financial, and general operational business requirements for launching an independent clinical practice. In 2006, AACN recognized this knowledge deficit and defined core competencies for the doctorate in nursing practice academic program accreditation.

These core competencies include proficiency in using economic and financial principles to redesign effective and realistic care delivery strategies and the ability to employ principles of business, finance, and economics to develop effective plans for improving the quality of health care. Many innovative and aspiring APNs, including those with and without advanced degrees, who are interested in establishing independent ambulatory care practices must first understand and appreciate basic business planning principles.

Where does an APN begin to determine if entrepreneurship is right for him or her? The first step is to conduct a serious self-assessment to assure the APN has an above-reproach clinical skill set, an exceptional high energy level, and a fiercely independent propensity to succeed. If the APN meets these rigorous expectations, the next step is to fully understand all the details of what it really means to be an entrepreneur.

Around the beginning of the 19th century, Say coined the term entrepreneur from the French term entreprendre - to "undertake" (Stoy, 1999, p. 231). Say suggested change agents seek opportunities for shifting economic resources away from areas of low productivity to those with the potential for higher productivity, higher yield, and greater value. Nurse entrepreneurs seek self-employment by developing diverse practices and businesses that give them the opportunity to "improve health outcomes with innovative approaches" (Wilson et al., 2012, p. 1). These entrepreneurs recognize direct accountability to clients regardless of their status as an individual or a public/private organization that uses their services (Liu & D'Aunno, 2011). Nurse entrepreneurs might have an independent clinical practice, own a business such as a nursing home or pharmaceutical company, or operate a consultancy that offers research or educational services, or other businesses that include professional writing, filmmaking, and product developers (Carlson, 2016; Wilson et al., 2012).

As agents of change, APN entrepreneurs seek opportunities to directly address gaps in direct patient care and the healthcare industry. APN entrepreneurs must secure top-notch business skills because they must first convince decision makers and other stake-holders that their views of a new, improved way of doing business via an independent practice offer clear, data-driven advantages for patients and real value for the organization's bottom line. An entrepreneurial spirit, solid knowledge base, clinical skills, and desire to provide patients with quality healthcare are simply not enough to be successful in an independent practice. The viability of nurse-managed practices essentially rests on keen business acumen and financial "know-how" (Barberio, 2010).

To make their case for a new nurse enterprise, ambitious independent APN entrepreneurs look to the traditional business plan as the vehicle for defining the what, why, who, and where of their nascent business venture. For instance, what clinical specialty reflects the APN's clinical expertise and services the practice will provide? Who are the competitors and what will differentiate APN practice from the competition? Where will the practice be located to assure sufficient volume and related revenue stream? How many employees are needed to start the business? How much money is needed to get started? What is the potential for getting a loan? How long will it take to make a profit? What are the current healthcare payer, tax, and related insurance environments? How will the new APN practice be marketed, advertised, and managed? It is in a fully developed business plan where nurse entrepreneurs (a) identify specific goals and measurements to assess progress over time; (b) establish the foundation for future practice performance with detailed financial analyses that include cash flow and break-even requirements; and (c) leverage critical industry intelligence and marketing information to demonstrate the proposed venture's viability before decision makers agree to make a significant financial commitment.

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