Three Reasons NOT to Start a Medical Billing Business

Small businesses employ more than half of the U.S. workforce. (The U.S. Small Business Administration defines a small business as one employing fewer than 500 people.)

While U.S. entrepreneurs start more than half a million new businesses each year, only about two-thirds of those survive two years. Fewer than half celebrate five years in business and only about a third survive a decade.

Starting a business certainly isn’t for the faint of heart —and starting one in the medical billing business is no exception. Succeeding requires strong people skills, tenacity, the ability to learn quickly, becoming obsessed with the details , and networking relentlessly. Nevertheless, there’s good money to be made for those who enjoy the challenge of medical billing and are good at it.

According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage for medical records and health information technicians (the closest occupational category to “medical biller”) was $38,040 in May 2016. The BLS projects 13% job growth for the occupation in the decade 2016-2026, almost double the average growth rate for all occupations (7 percent).

Regardless, even the most seasoned medical biller is quick to caution that medical billing is not an easy business. There are many motivations for starting an independent business, but downsides do exist. Following are three of the worst reasons for starting a medical billing business.

Needing a Steady Paycheck

“You have to spend money to make money,” as the saying goes, but a lack of cash flow can be a killer.

Many a would-be entrepreneur has learned the hard way that startup businesses often cost more than they collect in the first year or two. In addition to start-up capital and a business plan based on market research, most businesses need accounting, legal and marketing expertise to get up and running smoothly. And these services cost money.

“The best time to consider entrepreneurship is when you are employed and drawn to doing something else,” BlogHer Co-founder Jory Des Jardins wrote back in February 2010. “Then you can truly answer the question of whether you are committed enough to provide steep outlays of time and money to give your business the care it needs.”

Unwilling to Face the Demands of Entrepreneurship

Wanting to “work on your own terms” and “be your own boss” might be great motivators, but believing you can work less and earn a great living in medical billing is unrealistic. While starting a business might allow you to set your own hours initially, it’s unlikely you’ll be able to reduce them in the first few years.

In fact, the bigger a business gets, the more likely owners are to schedule their personal lives around work rather than the other way around. For example, a 2015 SurePay survey indicated that almost half of small business owners can’t allow themselves a daily lunch break.

Doctors aren’t always available when it’s most convenient for you to meet with them, and they are very busy individuals in a very high stress occupation. You can hire people to keep the operation running, but you’ll need to train them and be available during normal business hours and sometimes outside of normal business hours to supervise and answer questions.

“Your customers will want what they want, when they want it and you need to put in place a system that meets their demands and set realistic expectations,” said Ryan Robinson, writing about entrepreneurship for

Wanting to Make Big Money Immediately

What does a typical medical billing business earn? reports the industry’s annual gross revenue range as $20,000 to $100,000. Medical billers generally get paid based one of three ways:

Regardless of payment method, industry experts say it takes at least five months before a medical billing business starts making money. Startup processes like connecting with a claims clearinghouse and converting providers’ existing billing processes to the medical biller’s system require both time and dollars. However, if done correctly they pay big dividends, in terms of both client satisfaction and medical biller sanity, in the long run.

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