Staying in private practice offers its own rewards
■ A column about keeping your practice in good health
By Karen Caffarini — covered practice management issues during 2008-09 and writes for us occasionally on the topic. Posted July 18, 2011.
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The number of small, privately owned practices continues to shrink as economic pressures and long hours take their toll on the owner-physician.
Sixty-five percent of established physicians and 49% of physicians hired out of residency or fellowship in a recent 12-month period were placed in hospital-owned practices, according to a Medical Group Management Assn. physician placement report issued in June 2010.
But private practice doesn't need to go the way of the dinosaur, experts say. There are many reasons -- both financial and personal -- why physicians should not sell their practices.
One reason is having more autonomy. If you have your own practice, you are the boss and you run your own ship, said family physician Sanford J. Brown, MD, who has had a solo practice in Fort Bragg, Calif., for more than 30 years.
You set your own work hours, implement your own philosophy of care, spend as much time as you want with a patient and are not strangled by policy like you could be when working for some larger medical groups, said Nina Grant, vice president, managing agency director, with Practice Builders, an Irvine, Calif.-based marketing agency for private physician practices.
"You can design your own office the way you want it," said family physician Roland A. Goertz, MD, president of the American Academy of Family Physicians. "If you can't be happy in that environment, I'm not sure what environment you could be happy in."
Maintaining a strong sense of personality is another reason to keep your practice.
"This is what people went into medicine for. Plus, doctors tend to be Renaissance people -- they can do a lot very well," said Dr. Goertz, whose practice is in Waco, Texas. He said many doctors are fascinated by the business side of the practice as well as the medicine aspect and have the ability and skills to succeed in both.
In addition, a practice can match a physician's values. Dr. Goertz lives in a church-aligned area where some doctors instill their spiritualism in their practices. "These physicians will more easily attract patients with similar beliefs. Patients feel very comfortable with them," he said.
You can create a legacy. When a doctor builds a practice, he or she develops trust between themselves and patients that continues to grow and becomes bigger than just the doctor, Grant said. It also includes paraprofessionals and other staff in the practice.
Other reasons why a physician should not sell his or her practice:
- You despise politics: Grant said large conglomerate-owned or hospital-owned practices are big businesses that often have the same hierarchies and politics that can be found in the business world.
- You have a loyal staff: You're paying your staff's salary so they're loyal to you when you have your own office, Dr. Brown said. Irene Doti, a spokeswoman for Practice Builders, said doctors like to keep their own staffs and some doctors have a difficult time relating to hospital staffs. Plus, Doti said some physicians hire family members, including spouses, to help run their private practices. "The reality is, if the doctor works for someone else, the family member probably won't be able to come, too," she said.
- You have guaranteed income: Once you sell your practice, you have no guarantee of an ongoing income, Grant said. Dr. Brown said the only real job security in today's medical marketplace is the patients. If one mismatched patient leaves your practice, there still are plenty of others. However, if there is a mismatch between a doctor and his or her employer, it could leave the doctor without a job.
- Your practice is filling a need: Dr. Goertz said there are certain areas in the country that will need independent small practices because their location doesn't attract a large number of physicians or large groups.
- You don't have to work around the clock: Dr. Brown said most areas have hospitalists, who free solo practice physicians from making those rounds. "That really freed up my time in the last 10 years," he said. Dr. Goertz said physicians can retain their independent practices, but share after-hours calls with other independent practices.
- Your practice can make a good income: "The biggest fear of some doctors is they won't be able to make it financially. I believe that is an irrational fear," Dr. Brown said. He said small physician practices like his can survive, provided doctors know the nuts and bolts of business. For instance, he said practices tend to be too heavy on the payroll side. "My rule of thumb is one employee per doctor," said Dr. Brown, who offers tutorials at his office to show doctors how they can successfully operate on their own. You can cut costs by not buying expensive décor and sharing overhead with other practices, Dr. Goertz said.
Grant said small practices can grow their income by bringing in additional cash revenue through ancillary products like weight management, hormone balance, allergy management, nutrition supplements and an on-site pharmacy. "Should someone's weight loss be managed by franchise owners or by doctors?" Grant asked. She added, however, that not all these ancillaries are allowed in all states. Doctors can't do pharmaceuticals in New York, for instance, she said.
- It makes you happy: Last, but not least, is the personal satisfaction factor. Experts say many established physicians and new residents went into medicine to be in their own practice, and that is what makes them happy. A heavy college debt load and other economic factors cause them to look for a set income and other perks of being an employee. But Dr. Goertz advised, "Doctors shouldn't look at just the monetary gain they could get from selling their practice. They need to look inside themselves and ask will they be happy."
Note: Caffarini is filling in for Victoria Stagg Elliott.
Karen Caffarini covered practice management issues during 2008-09 and writes for us occasionally on the topic.