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Home»Health»How Outsourcing Can Help Physicians Set Up New Practices?
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How Outsourcing Can Help Physicians Set Up New Practices?

hyder ghumroBy hyder ghumroAugust 5, 2025No Comments4 Mins Read
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Starting a new medical practice is an exciting project for healthcare providers; however, what they don’t realize sometimes is that it can also be very challenging. The prospect of independence and providing personalized care to patients is appealing, but the administrative and operational demands can be overwhelming.

To give you an idea of how straining it can here’s some data based on authentic research. The cost of starting a medical practice ranges from $70,000 to more than $100,000, with average monthly operating expenses of approximately $6,000. Not everyone can afford this kind of money. On top of this, employee salaries, administrative costs, and overhead costs make everything even more difficult.

Physician burnout is increasingly linked to administrative burden, with studies showing that physicians spend an average of 15.5 hours per week (16.6% of working hours) on administrative tasks. This burden is even greater for new physicians because they lack the experience of handling different types of hurdles.

So, what’s the solution? Well, outsourcing the major services is the easiest and most profitable way to go. In this guide, we will discuss exactly how outsourcing can simplify the practice startup. So, let’s start.

Administrative Burden By the Numbers

To give you an idea of how administrative tasks are a huge burden for new practices, here are some stats:

  1. Administrative Time – Physicians spend an average of 15.5 hours/week on paperwork and administration.
  2. EHR Interaction – 45% of physicians’ work time is spent interacting with Electronic Health Record systems.
  3. Clinical FaceTime – 27% of physicians’ office day is spent on direct clinical face time with patients.

Key Services That Can Be Outsourced

When starting a medical practice, several critical administrative functions can be effectively outsourced to specialized service providers. Let’s explore the main categories:

Medical Billing and Revenue Cycle Management

Medical billing is one of the most commonly outsourced functions in healthcare practices. Billing and RCM are hard even for the most experienced practices and even large hospitals. For new physicians, it can be fatal to their practice. Why? Because if you start getting claims denials from the start, there will be no cash flow, which means failure. So, most practices and physicians opt for outsourcing their operations. 

Key Statistics:

  1. The medical billing outsourcing market was valued at $11.1 billion in 2021 and is projected to grow at a CAGR of 12% through 2030.
  2. Outsourced billing typically incurs a 5.4% cost to collect a dollar, compared to 13.7% for in-house billing (MGMA survey, 2021).
  3. Medical practices outsourcing their billing can see a significant increase in revenue, with typical improvements of 5-15% in collections.

Using medical billing services for small practices allows physicians to benefit from specialized expertise while avoiding the need to hire, train, and manage billing staff during the crucial startup phase.

Medical Credentialing

Credentialing is the process of verifying a healthcare provider’s qualifications and establishing their ability to practice at a specific healthcare facility or bill insurance companies. This process is notoriously complex and time-consuming.

Key Statistics:

  1. The average time to credential a provider can be reduced by 30-50% when working with an experienced outsourcing partner.
  2. Individual physician credentialing typically costs between $200-$500 per physician per insurance plan.
  3. Professional credentialing services typically maintain accuracy rates above 95%, leading to fewer denied claims.
  4. The ROI of outsourced credentialing for a mid-sized practice with 10 providers can be approximately $67,700 in direct cost savings annually.

Working with medical credentialing companies allows new physicians to accelerate the process of getting enrolled.

EHR Implementation and IT Management

Setting up and using the Electronic Health Record systems is another area that can be outsourced to save a lot of money and effort. You might not know this, but setting up EHR systems and maintaining them can be quite costly.

Outsourcing them simply removes this cost from your balance sheet. Want to know how much you will have to pay if you try to handle all this yourself? Here’s some data:

  1. EHR implementation costs range from $15,000 to $70,000 per provider.
  2. Support and maintenance costs related to EHR implementation typically range between $60,000 and $100,000 per year.
  3. Small practices might spend around $33,000 per provider initially for EHR implementation.

Wrapping Up

For new physicians establishing a medical practice, outsourcing key administrative functions offers a practical solution to the overwhelming challenges of practice management. In this blog, we have clearly backed everything with factual data.

So, if you are starting a new practice, don’t try to do everything yourself. The best route to success is outsourcing your major operations, like billing, credentialing, and EHR implementation and management.

Remember that the goal of outsourcing is not just cost savings but creating a sustainable practice model that allows you to thrive professionally while delivering exceptional care to your patients.

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