Know the challenges before going solo
Be prepared for the business side
It’s great to be on your own, make your own schedule, and do the work you love, but there are a lot of challenges associated with starting and maintaining a business as an independent case manager.
“People in healthcare are driven to provide a clinical product, but they are not as attuned to the business end of it. When other people were taking business courses, nurses were taking science. We aren’t prepared for the grueling business side of practice,” says LuRae Ahrendt, RN, CRRN, CCM, nurse consultant at Ahrendt Rehabilitation in Norcross, GA.
When you start a business as an independent case manager, you have the responsibility of handling all the business paperwork — reports, bills, tax forms.
“You can do the best work in the world but if you don’t bill for it, it doesn’t matter. You have to handle the paperwork and billing to keep your company alive,” Ahrendt adds.
In addition to having the experience and confidence to take on big problems, solo practitioners also need to be willing to do the menial tasks, such as paperwork, billing, and filing, as well, adds Catherine M. Mullahy, RN, BS, CRRN, CCM, president and founder of Mullahy and Associates, a Huntington, NY case management consulting firm.
Understand at the onset that if you don’t work, you don’t get paid, and you can’t work if you’re sick or on vacation, Ahrendt says. Self-employed case managers get no paid vacation or sick time and no benefits. You have to pay for your own health insurance, office supplies, office rental, business equipment, such as computers needed for the job, insurance, accounting and legal fees, and marketing costs.
In the beginning, expect your income to vary, depending on the workload. “I’ve found that it seems to be feast or famine. I’m either so busy I wonder if I can get it all done or have nothing on the books,” adds BK Kizziar, RN, CCM, CLCP, owner of BK & Associates, a case management consulting firm based in Southlake, TX.
She advises case managers to start out with a nest egg that represents what you anticipate you will need to live on for several months and keep that much in savings as you go along for those months when you don’t have enough business to cover your bills.
When you analyze what income you will need to cover your bills when you’re self employed, include the cost of health insurance and malpractice insurance as well as your household and living expenses. Look at what you’ll need to practice, such as whether you have the kind of computer and software you need. If you are going to be traveling or visiting patient homes, make sure you have a reliable automobile and that you have the type of auto insurance you need.
Case managers have to negotiate contracts with individuals or companies with whom they do business, Kizziar says. When you do so, be sure you tally up your potential expenses and include that in your proposed contract along with the payment for your services. For instance, she’s talking to a hospital in another state that is seeking an interim case management director for a 90-day period. “I’m asking for room and board and airfare so I can go home for a long weekend every three weeks,” she says.
“Before starting their business, case managers need to identify a good attorney, a good accountant, and a good banker,” says Brenda Keeling, RN, CPHQ, CCM, president of Patient Response, Inc., a Durant, OK, healthcare consulting firm specializing in regulations and compliance.
Independent case managers should incorporate to protect themselves from liability and choosing the right attorney is essential, but you also need an accountant to advise you about what kind of corporation will be most beneficial from a tax standpoint, she adds.
A lack of financial security is the biggest obstacle that prevents case managers from going out on their own, Mullahy says. “In an insecure economic environment, there really are problems from moving away from an employee role with a defined salary, health benefits, paid sick time, and vacation time to a situation where none of that is a given and cash flow is likely to be uneven,” Mullahy says.
Social isolation may be a problem for independent case managers, Mullahy says. “There aren’t any colleagues who are just steps away or in a nearby office to brainstorm with on complex problems,” she says.
Entrepreneurship isn’t for everyone, Ahrendt says. “There are aspects about being an independent case manager that are very attractive, but most individuals don’t understand all that is involved until they get into it,” she says.
To successfully become independent practitioners, case managers need to have an entrepreneurial spirit and a commitment to the job, Ahrendt says.
Case managers who want to venture out as solo practitioners need to have diverse and extensive experience both in their own profession (nurse or social worker) as well as experience as a case manager, Mullahy says. Ideally, case managers who want to work on their own should achieve certification, she says.
“In addition to professional and case management experience, independent case managers should have life experience and business savvy, have an understanding of the needs of the market, and be able to position themselves to meet those needs,” Mullahy says.
“Find your niche and decide how hard you want to work,” Kizziar says. “Some independent case managers work for a living. Others do the work to stay busy.”
Finding your niche is important, but you need to be able to supplement with what pays the bills, she says.