North Texas Affordable Medical Clinics

Raising $1.3 Million to build 3 Direct Care clinics in North Texas.

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Introduction

North Texas Affordable Medical Clinics
 
Our organization is the beginning, or seed, of a larger organization which may grow into several clinics. The initial entity will consist of 3 clinics, located in Durant, OK, Prosper, TX, and Frisco, TX. 

My medical clinics are based on “direct care” methods, and as such are cash-only forms of care. We will have memberships for individuals at $100 per month for adults and $65 per month for children. Each individual or family is entitled to unlimited access to the physician or nurse practitioner 24 hours per day. Patients will be seen in the clinic during the day, and can call our providers at night or on the weekends via telephone or telehealth conferences. 

The clinics will market to individuals and families, but will be very active in marketing to corporations in which case the clinic membership will be part of the employees benefit package. 

These clinics are marketed towards:

1.) Individuals and families with no insurance at all.
2.) Individuals and families who have high deductible plans and this membership will save them considerable money without having to pay out a large deductible (this is very popular)
3.) Corporations that wish to add this benefit to their benefit packages.

The benefits of this type of practice is:

1.) That it is tried and true.
2.) I have done this before with great success and so I am very knowledgeable in the implementation of these practices.
3.) There is no insurance involved with all its headaches. Only cash is involved (cash upfront for nonmember individual visits, credit cards, bank drafts for members, monthly payments from families and corporations).
4.) These practices can be opened very quickly (30-60 days).
5.) Gross profits per clinic can approach $4 M annually.
6.) Usual overhead expenses, but without insurance clerks and the other problems and expenses of insurance filing.
 

Competition

This type of medicine and clinic is not new. It is really a resurgence or reintroduction of a way of medicine that goes way back before medical insurance was introduced after WWII. Cash only for medical services is the way it has always been.

How do we know that people will recognize its benefits and participate in the market with their cash? First, I created such a clinic in Amarillo, Texas in 1984 and we had gross revenues of $3 million per year. It was very popular.

Second, today, many cash only clinics exist in almost every state in the union. I can name 20 clinics right off the bat. I will not be starting a new concept that no one has ever heard of. However, like every business, there must be something unique in that business in order to properly compete. Our clinics are very unique in their operation, management, and, especially the marketing aspect.

Here is a list of some of the cash only clinics (direct medical care) in our region of the USA and Texas:

·        https://peakmed.com/
 
 
Marketing Strategy

In the healthcare industry marketing takes many forms and can be simple as in a single physician’s office, or, more complex as in a large hospital chain. However, it is my opinion that many in the healthcare field (especially hospitals) try to market their services almost like a large Wall Street enterprise. They throw lots of money at it and they hire some of the best advertising firms, but somehow they leave out the basic personal element that is so important in working with sick people and their families.

Most of my experience in marketing is based on my personal instinct as a person and my relationships with other people. Being a physician takes second place. I was very successful in obtaining corporate agreements with large corporations during the time that I built my first free-standing emergency center in 1985. I was successful in capturing the medical business of Pantex in Amarillo which is a very large federal facility that has nearly 4,000 employees. It is the final assembly point of all USA nuclear warheads. Our clinic performed physical exams on employees and we cared for their job injuries. We also obtained an agreement with the Texaco Refinery, Iowa Beef Packing Company, Corning, and the copper smelter, as well as multiple small businesses. 

Marketing was accomplished with a combination of personal conferences with company officials, mail-outs, brochures hung on residential doors, and outdoor billboards. We were able to obtain a patient volume of 75 patients daily within 90 days at the Amarillo facility. It is my intention and design to duplicate this effort with each of the North Texas Affordable Medical Clinics. I have no doubt that our operations will reach breaking point before the first 6 months. We are very active about the marketing and we will make it happen.

Here are the major components of our marketing strategy:

·        Major mailouts to corporations in the area. We will ask for a conference time and meet personally with officials of each company to discuss how our clinic can benefit their company and their employees.
·        Meetings with a number of physicians to discuss referral patterns and how we may benefit each other.
·        Brochures hung on residential doors by a hired crew.
·        Billboards placed strategically around the city (usually 1-2).
·        Special networking with a number of civic programs in the city.
·        Well designed web page.
 
 
Revenue

·       First 3 months of operation, it is expected that there will be an average of 10 patients a day seen at a rate of $150 each. This includes procedures and injections. This is equal to ($150)(200 patients) = $30,000.
·       First 3 months of operation, it is expected that there will be an average of 1 individual membership, 2 family memberships, and 3 corporate family memberships sold per day. This is equal to ($100)(60) + ($660)(120) + ($990)(180) = $6,000 + $79,200 + $178,200 = $263,400.
·       Next 9 months, the number of family and individual memberships will exponentially increase and will be directly proportional to the amount of marketing. It is estimated that the last 9 months will produce another 3,600 individual non-member patients, 720 family memberships, and 2,200 corporate family memberships. This will amount to revenue equal to $1,323,600.
·       Total revenue for the first year estimated to be $263,400 + $1,323,600 = $1,587,000.
·       Prospects for the 2nd year are at least twice the amount of the first year.

 
Overhead Fixed

·        X-ray Machine and Equipment……………………………..$45,800
·        Reception room furniture……………………………………..15,000
·        Office furniture (desks, chairs)……………………………….  5,000
·        Computers……………………………………………………….4,500
·        Medical equipment…………………………………………….12,400
·        Outside Sign………………………………………………………$3,000
·        Website……………………………………………………………...1,500
·        Supplies……………………………………………………………..2,500
·        Marketing…………………………………………………………..12,000
·        Staff salaries (1 receptionist, 2 MA’s, 1 NP……………………..19520 per month, or, $234,240 / year
·        Physician salary…………………………………………………….20,000 per month, or, $240,000 / year
·        CEO salary…………………………………………………………..20,000 per month, or, $240,000 / year
 

First month capital needed = $156,220.

Second month capital needed = $74,020.

Third month thru 12th month = $740,200.
 

TOTAL capital needed annually = $970,440.

 
Gross Profit 1st year = $1,587,000 – 970,440 = $616,560.

Gross Profit 2nd year = $3,174,000 – 888,240 = $2,285,760.
 

Capital Needs

It is apparent that an infusion of capital will be needed for the start-up of each clinic. As noted in the proforma, there will be operational costs of $970,440 in the first year of operation. However, because of revenue being generated from the first day of operation, the capital needs will be offset. Most of the initial capital is needed upfront during the first 3 months of operation due to initial equipment purchases and supplies and operating expenses that cannot paid for by the amount of incoming revenue from patient memberships and patient visits. It is my estimation that having cash on hand at the beginning of the project of $450,000 will suffice to see the clinic into solvency which may be anywhere between 3 months and 6 months. 

Based on a need of $450,000 per clinic, the total amount that I am seeking will be $1,350,000 for the first 3 clinics.
How Does It Work?

Patients can be seen by our doctors and staff in one of 2 ways:

1.) Non-member patient, walk-in with no appointment.
2.) Patient member that can walk in, make appointment, call after hours, or receive a housecall. 

The patient membership is available 2 different ways:

1.) Individual or family memberships paid monthly and bought as an individual consumer.
2.) Individual or family memberships paid for monthly by the patient’s employer as a company benefit. 

Patients have unlimited access to the doctor 24 hours / day through appointment, walk-in, text, phone, or telemedicine for one monthly fee. 

Our monthly charge for adults is $100 each per month and for children is $65 each per month. No contracts, just 30 day notice to end membership.

Lab work, X-rays and MRI’s and CT’s are at a reduced rate. Pharmaceuticals are at a reduced rate. 
 

The CEO

Thomas Douglas, MD is the CEO. He is a native of Texas. He went to college and medical school in Texas. His training is in Internal Medicine and Emergency Medicine. 

Dr Douglas has built a freestanding emergency medicine clinic that he operated for a few years before selling it to a hospital. He has been engaged in emergency medicine for most of his career. Later, he created 2 medical administrative companies and operated them successfully for a number of years. He also created a tutoring business that caters to students preparing for the MCAT for medical school and and students preparing for the LCAT for law school.

Currently, Dr Douglas is a licensed physician practicing medicine in Oklahoma City.
 

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