Starting a private practice as a healthcare service provider requires licensing and regulatory criteria, be it a doctor’s clinic, individual practice, laboratory facilities, a single speciality hospital or a multi-speciality hospital. Therefore, it is imperative for you to be aware of the different legal requirements before starting a clinic/hospital.
Funds for Starting a Hospital
Financing healthcare in India is tricky due to a myriad of socio-economical factors and it needs to be looked at from two aspects: (a) financing of capital costs i.e. creating healthcare infrastructure and; (b) financing delivery of healthcare.
With regard to capital costs, it can be addressed in three buckets. First, there is pubic sector expenditure that is incurred by the Government. Examples include AIIMS hospitals, state and municipal medical college, primary health centres, etc. Second is the charitable trust format which are donated by seeking grants. Before 1990, most Indian hospitals were built by charitable trusts and societies. Only after the advent of Apollo Hospitals in 1986 that healthcare started to lean towards private healthcare. India should not lose focus of the charitable trust era as it has become mandatory for most corporates to spend 2-3% of profits on CSR activities. It is mainly diverted towards education but healthcare will become a focused agenda in future.
The first step in any business is to create a thorough and comprehensive plan that allows for flexibility in response to unexpected events, and unforeseen challenges.
It would be ideal if you could project and estimate various costs, ranging from the purchase of clinic equipment to the rent of the space you currently occupy. You must set a revenue goal and a target for the amount of disposable income you want to earn, as well as a detailed plan to achieve these two important goals.
Every detail of the business should be documented and planned in an organised manner. In the event of unforeseen events or disasters, you should make plans for managing the clinic and day-to-day expenses. This would include insurance as well as a business continuity plan.
5 Ways to Get Funds for Starting a Hospital
Operating a medical office is a noble pursuit and one of critical relevance to a thriving society. People rely on medical offices to facilitate care between patients and doctors, and efficiency and accuracy are imperative when operating a successful medical facility. Given it’s such a vital job, you need to ensure that you always have the necessary supplies at your fingertips, so you can provide the highest level of care to patients. The type of loans available to you will depend on whether or not your medical facility is for-profit, non-profit, or government-run.
1. State Funding
State funding is the primary source of funding for medical offices. Two-thirds of the medical facilities in India. are non-profit, and the rest are for-profit or government-run. While only government-run hospitals are eligible for state funding, non-profit medical offices qualify for tax exemption, which can help to lower overhead costs considerably.
2. Commercial Bank Loans
Many medical offices turn toward commercial banks to meet their financial needs. Given the high demand for excellent medical facilities, many banks are eager to provide large loans to assist medical offices in providing the proper care. In fact, in 2011, banks loaned an estimated $1.7 billion to hospitals throughout India. These loans are generally provided to for-profit medical facilities that will be able to generate enough surplus income to pay the loans back. While non-profit hospitals may also qualify, it will be much more difficult for them to repay the loan considering their lack of revenue.
3. Nonprofit Lenders
For non-profit medical offices, the primary source of funding is through non-profit lenders that provide grants to medical facilities. Indian Medical Association is one of the biggest providers of healthcare grants in the India Their mission is to enhance and expand the availability and quality of medical care throughout the country, and they do so by providing regular funding to medical facilities in need.
4. Fundraisers
Fundraisers are another popular way to finance non-profit medical offices. Through fundraising, you not only acquire necessary resources to expand your healthcare facility, but you can also educate the community at large and increase awareness regarding the services you provide. Members of the community are often eager to participate, since improved healthcare is something the benefits all citizens.
5. Charities
Charities provide a critical funding option for healthcare centers. There are over 81,000 health-related charities in India, so the resources available to you are vast. Many of these charities raise money for specific health problems, while others provide funding for all medical centers in need.
Running a highly functional and efficient medical office is imperative to the health and wellness of the community at large. To ensure your facility is never short of resources, having access to several sources of working capital for medical facilities is crucial. Fortunately, many non-profit organizations, banks, and charities are eager to lend to medical offices, so they can continue to provide the highest level of care.
Summary
A hospital represents one of the few business opportunities that give you the ability to save lives on a regular basis. In addition to treating illnesses and injuries, many establishments offer preventive health services. They also provide access to advanced equipment that helps primary care physicians accurately diagnose ailments.
If you desire to make a huge difference in peoples’ lives and find innovative ways to improve medical care, consider starting a hospital.
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