Private Practice Owner or Hospital Employee?
More physicians are currently employed by hospitals or medical practices than ever before, while fewer are in private practice. According to a 2016 Medscape report, physicians as a group have shifted from private practice to being employed with the rate of employed physicians growing by more than 30% from 2000 through 2016.
One reason for this shift is that health care reform and the shift from reimbursements based on services performed to outcome-based methods in many specialties have created greater uncertainty for physicians in private practice. Also, many physicians today want to solely focus on treating patients — rather than deal with the many administrative and operational issues that running a medical practice involves. Here are some things to consider when deciding whether to be an employee of a health system or to start your own practice in the current complex medical world.
Private Practice Considerations
Physicians in private practice do not have to abide by policies, procedures and pay set by someone else. As owners of their practice, they get the benefit of sharing in the profits of the practice. They also have the autonomy to run the practice as they see best, including the authority to choose and use the electronic health record systems and practice models that they have determined are best for them.
If private practice seems a better fit for you, consider these strategies to help ensure success:
- Learn more about good business practices, so you can maximize profits and minimize overhead.
- Explore opportunities for increasing operational efficiencies by merging with another practice, partnering or forming an independent physician association (IPA).
- Consider becoming a micropractice (sometimes just a physician with no administrative or clinical support), which could enable you to keep overhead costs down as low as 35%, compared to the more typical 60% at small primary-care practices.
- Learn more about developing a concierge practice to cut back on the patient load by having patients pay an additional fee for more individualized services.
- Focus on high-impact areas of cost savings and emphasize best practices in billing and collections.
Physicians who work for a hospital or medical practice are usually paid a salary, so they have more financial stability than physicians who own their own practice. In addition, they don’t have to worry about administrative tasks such as human resources, billing, collections and day-to-day operations.
Here are some tips for achieving success in employment:
- Be aware of the tradeoffs of being an employee of a hospital or health system versus the autonomy of owning your own private practice, and be prepared for them.
- Conduct due diligence on the hospital or medical group you’re considering joining and make sure your goals are aligned with the institution’s mission.
- Network and connect with physicians already employed at the hospital and discuss their work environment.
- Decide if the tradeoff of less control over your private practice for fewer business and operational responsibilities will work for you.
Reap the Rewards
Being a physician is a rewarding career. Some physicians thrive in private practice, while others prefer employment. The decision as to which is the right fit requires a good amount of soul-searching. It is not uncommon for physicians to switch between employment at a hospital or health system and running their own practice several times over the course of their career.
For more advice on deciding between a private practice or employment, contact Jason Flahive at [email protected] or call him at 312.670.7444. Visit ORBA.com to learn more about our Health Care Group.