What telehealth budget do you need to start a business in this field from scratch? It seems like a remote video conferencing system and your own medical training are enough to get the ball rolling. However, that's not entirely true.
When you want to start a telehealth business, you need a license, Equipment other than an ordinary webcam, software to gather and store patient information, a website or app for scheduling appointments and communicating with patients, and marketing costs.
Yes, many telemedicine startup costs can add up, but they shouldn't scare you as a startup. With careful planning and budgeting, you can ensure your business is financially sustainable and successful.
Let's talk about this in more detail below.
What's the Telemedicine Financial Model for Startups?
The common belief is that telemedicine startups require a large initial investment to get off the ground. However, this is not always the case. The financial model for telemedicine startups can vary depending on factors such as business model, target market, and services offered.
Some telemedicine businesses may operate on a subscription or membership-based model, where patients pay a monthly fee for virtual healthcare services. Others may charge per visit or consultation, similar to traditional in-person medical appointments.
Additionally, a telemedicine startup's target market can also impact its financial model. For example, targeting rural or underserved areas may require more investment in technology and infrastructure than targeting urban areas with established internet access.
A sample telehealth budget for a novice in this field usually comprises costs such as...
- Licensing fees: This can include obtaining a medical license and any necessary permits or certifications required to operate a telemedicine business.
- Technology and Equipment: You will need hardware and software with a high-quality camera and microphone, a secure video conferencing platform, an electronic health record (EHR) system, and patient communication tools.
- Website development and maintenance: Though not necessary, this can add credibility and convenience for patients. Ongoing maintenance costs should also be considered.
- Marketing expenses: This includes any advertising, branding, or promotional efforts to attract potential patients and establish a presence in the telemedicine market.
- Administrative costs: These can include salaries for staff members such as physicians, nurses, and administrative personnel, as well as office rent and utility bills.
As an initial investment, a telemedicine startup may also need to factor in legal and accounting services costs, obtain liability insurance, and conduct market research.
Cost of Telehealth Implementation: What Do I Need to Invest in As a Startup?
In this section, we'll present the most common telehealth startup costs and some potential additional costs that may be required. This information can help you prepare a realistic budget and make informed decisions when setting up your telemedicine business.
(Of course you need to allow some room for changes as you might be required to alter your expenses according to the telehealth practice you set up.)
Licensing Fees: ~ $1,500
First, you must obtain the necessary licensing and permits to operate a telemedicine business. This is the first step you should take, as failure to comply with licensing requirements can result in hefty fines or even the closure of your practice.
Licensing fees vary by state and country, so research the specific requirements for your location. You may also need to obtain permits from local or national healthcare regulatory bodies.
If you're planning to operate in the US, you need a license to operate in each state. You can also get a multi-license if your state participates in the Interstate Medical Licensure Compact.
A consultation with a lawyer would better prepare you for this part. You might sometimes pay less if you're aware of cross-state regulations.
Technology and Equipment: ~ $20,000-40,000
The technology and Equipment needed for a telehealth practice can vary greatly depending on the type of services you plan to offer. However, there are some basic tools that all telemedicine practices should have, such as:
- A HIPAA-compliant video conferencing platform: As sensitive as patient information is, it is crucial to use a platform that meets HIPAA's privacy and security (Health Insurance Portability and Accountability Act). The video conferencing platform should also be user-friendly for you and your patients.
- A reliable internet connection: This goes without saying, but a stable and fast internet connection is essential for telemedicine consultations. You'll need more than residential internet when you need a connection for running a business and it should support high-quality video streaming.
- Software and apps for medical charts, billing, scheduling, etc.: Depending on your practice's needs, you may need to invest in specialized software for managing medical records, handling payments and billing, scheduling appointments, etc.
- A high-quality webcam and microphone: Since telemedicine is all about virtual interactions, having good quality visual and audio Equipment is crucial for providing a satisfactory patient experience. Consider investing in HD webcams with built-in or external microphones for better sound quality.
- Medical peripherals: Depending on your services, you may also need specialized medical peripherals such as stethoscopes, otoscopes, blood pressure monitors, etc.
- Secure storage solutions: With the increasing use of technology in healthcare, there is a growing concern about data privacy and security. Investing in secure storage solutions is important to safeguard patient information from cyber threats.
The initial setup costs for telemedicine might frustrate you. However, this investment will pay off in the long run by increasing efficiency and convenience for both you and your patients.
Legal Service Costs: ~$200-$400 per hour
Telehealth startup costs should also include the fees you'll pay to a professional lawyer who can help you navigate the legal landscape of telemedicine. You'll need someone to go into detail about the legal implications of your practice, apply and get you registered as a telemedicine provider, and advise you on the legalities of delivering healthcare services virtually.
Though the licensing process is generally open to the public, and a little free research can help you establish a basic understanding of the legalities surrounding telemedicine, it's worth the investment to have a lawyer review your practice and ensure you are operating within all regulations and laws.
Moreover, as telemedicine continues to evolve, there may be changes in laws and regulations that govern its practice. And as it's a sensitive aspect of healthcare, it's crucial to have a legal expert who can guide you through any changes and updates. This can help you stay compliant and avoid any potential legal issues that may arise.
Will I Cover the Costs Eventually?
Yes. Telehealth's financial benefits are obvious, starting with the decrease in overhead costs. By reducing the need for physical space and Equipment, you're saving money to invest elsewhere in your practice. Additionally, telemedicine allows you to see more patients quickly, increasing your revenue potential.
The good part about this business is that a large fraction of investments come upfront, and they can be covered within a short period due to the above-mentioned benefits. When the initial setup is done and you have established a steady flow of patients, the costs will eventually be covered, and you may even see an increase in profits.
Here are some basic calculations so you know when the telehealth setup cost will likely be covered.
Cost of Telehealth Visit vs In-Person
Of course, you can charge more when providing telemedicine services as a convenience fee. Still, there is no denying that the overall cost of an online appointment is lower than an in-person visit.
An in-person appointment may include costs such as staff salary, rent for physical space, equipment maintenance, and utilities expenses. On the other hand, a telehealth visit only requires you to pay for the technology used and any overhead costs associated with it.
For example, if your average in-person visit costs $100 and your telehealth appointments cost $50 (including technology expenses), you're already saving 50% on each appointment. Depending on how many patients you see per day or week through telemedicine, the savings will add up and eventually cover the initial costs of setting up telehealth services.
A typical cost for an in-person visit is around $150, while a telehealth visit may cost around $75. This difference in cost benefits healthcare providers as well.
How Much Is a Telehealth Visit Without Insurance?
What's the realistic charge per fee you can expect to charge a patient? Due to their lower overall cost, telehealth services are still an attractive option for patients without insurance.
On average, telehealth appointments without insurance can range from $40 to $80. Your business's position in this range depends on several factors, such as your specialty, the complexity of the appointment, and the location of your practice. For example, rural areas may have lower telehealth fees than urban areas, where there is more competition.
Offering added value to patients, such as after-hours appointments or extended video consultations, can boost the fees for your telehealth services. This can also attract more patients and increase your practice's overall revenue.
Should I Necessarily Carry Development Costs for Developing a Telehealth Platform?
Software is a crucial component of telehealth services, and you may be wondering if it's necessary to incur development costs for creating your own platform. The answer depends on your practice's size and needs.
For small practices with limited resources, it may be more cost-effective to use an existing telehealth platform rather than invest in developing one from scratch. For example, if you choose Bask Health, an all-in-one platform for telehealth services, you can save time and money on development costs while still providing a seamless and secure telehealth experience for your patients.
If you want to customize the solution for your unique business needs, Bask Health can help with that, too. A customized telehealth platform allows you to add, edit or remove features as needed, without the burden of high development costs.
And if you decide to develop a platform from scratch, such as ordering custom software, you must consider the costs of ongoing maintenance, updates, and potential security risks. These factors can significantly impact your bottom line and may not be worth investing in smaller practices.
Depending on the complexity and scope of your project, developing a telehealth platform from scratch can cost around $30,000 to $150,000. Before making a decision, it's essential to carefully weigh these costs against the potential benefits.
Summing Up Telehealth Startup Costs
Starting a health business requires investing some money to get a lot more out of it. You cannot do it without investing in the right technology, team, and marketing strategy. This guide provides the essential cost insights to get your telehealth business up and running successfully.
Your real-life startup costs will vary depending on your specific business goals, technology choices, and market conditions. But this benchmark, taken from successful healthcare entrepreneurs, can give you an idea of what to expect.
Lastly, as a new player in the healthcare industry, you may need specialized software to help you stay compliant and make your product unique and efficient. With Bask Health's telehealth platform, you can be assured that your patient's data is secure and that the software is constantly updated to meet industry regulations.
Good luck with your telehealth business journey!