Career Planning
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Finding the Right Practice
Considering Private Practice
Most fellows are familiar with the concept of private practice, but with their lives dominated by years and years of academic training, they might not be exactly familiar with how it differs from other practice settings.
In fact, there is often misunderstanding between private practice and hospital employment because both of these are non-academic practice types.
In order to make an informed decision, both need to be understood in terms of options available to you in your career planning.
Most fellows are familiar with the concept of private practice, but with their lives dominated by years and years of academic training, they might not be exactly familiar with how it differs from other practice settings.
In fact, there is often misunderstanding between private practice and hospital employment because both of these are non-academic practice types.
In order to make an informed decision, both need to be understood in terms of options available to you in your in your career planning.
What does private practice mean?
Simply put, private practice physicians are not employees. They are independent in their professional practice. This is differentiated from hospital employment, which is also a non-academic position, but one in which physicians accept formal employment positions.
There are several models for physicians in private practice, and carefully considering each for appropriate fit will create higher chances of early-career success.
Solo Practice
A physician practices independently without partners or employment affiliations and maintains complete autonomy over all aspects of the practice as a sole proprietor.
This is fairly rare in neonatology but can be found in rural areas where there are very few or just one neonatologist in the area.
Due to the isolated aspect of this practice type, it can be a challenging prospect for someone right out of fellowship.
KEY ATTRIBUTES
If you are thinking about a solo practice opportunity, consider the following aspects of this type of practice option.
Sole Decision Maker
When it comes to a solo practice, you will be the boss. You will make all the decisions yourself and with your own interests and perspectives in mind.
This is often what attracts physicians to this model but there can be a heavy burden as you will be responsible for all aspects of the health, growth, and financial viability of your practice.
Overhead Costs
Running your practice can become very expensive.
One of the biggest reasons physicians shy away from a solo practice is due to the costs associated with operating a practice. When you practice with others, such as with a group practice, these costs are shared among all the physicians.
The costs of running your own practice should be carefully understood and considered if this is the path taken.
Call Coverage
In a solo practice there is no one else. Physicians will have the burden of 24/7 coverage for their patients or designing partnership or call coverage relationships with others, assuming others even exist. Constant coverage means time off is at a minimum.
Practice Management
You will have to manage your practice which requires you to not only assess and treat your patients but also contract with insurers, bill and collect reimbursements, and ensure regulatory compliance.
This can be an extreme burden for some and requires careful attention to detail, staying current on changes with billing, insurance contracts, and regulations, as well as managing the financial aspects of running a full-time business.
Keep in mind, a practice or business manager can be hired, and often is, but this adds to your costs and can sometimes be too expensive to pencil out.
Financial Management
Running a practice is running a business. You have to bring in revenue and pay for your expenses. Ideally, when both of those are done, you have a profit, which will become your income.
This is true of any practice type but in a solo practice, there is no buffer. Financial management of the practice is the focus of your business.
The practice is either making money or it is not, and the amount of money it makes determines how much money you make. These challenges make this an exceedingly difficult option for someone right out of fellowship.
PRACTICE CHALLENGES
- working with minimal administrative or clinical staff
- handling all aspects of the practice including paperwork, regulations, and financial management
- working long weeks with less time off
- more sensitivity to economic or market factors
- managing full call coverage or arranging back up coverage
- taking on the administrative burden of developing agreements with insurers
- lost income due to illness or vacation
- limited patient base
PROS
individual freedom, being your own boss, control and decision-making authority in how to run the practice, creating your own schedule, autonomy in patient care, closer relationships with patient families and staff
CONS
longer hours, more business risk, higher costs, complete responsibility over the practice, unpredictable rate of income growth, less opportunity for collegial interactions, difficulty getting time off
- Do you want to own and manage your own practice?
- Are you interested in practicing in a rural area?
- Do you have good organizational skills?
- Are you comfortable with financial reporting and management?
- Are you willing to accept a higher level of business risk?
- Do you want full decision-making authority?
- Are you comfortable with handling various administrative tasks?
- Do you have an entrepreneurial drive?
- Are you proficient in laws, regulations, and insurance?
- Are you comfortable with 24/7 call coverage?
Group Practice
In a group practice, two or more physicians practice in one physical space, utilize the same personnel, share expenses, and divide income in a manner agreed upon by the group.
Group practices can be single specialty or multi-specialty.
For example, Sunflower Neonatology Associates, LLC is a single specialty group practice in Overlook, Kansas, and Kidz Medical Services is a large multi-specialty group practice with neonatologists based in Florida.
KEY ATTRIBUTES
With a group practice, many of the burdens associated with solo practice are alleviated but there are other considerations brought about with this type of practice model.
Decision Making
As you add physicians to the practice, decision making becomes an important operational aspect. There is quite a bit of variety in how group practices make decisions.
You may find groups with formal decision making roles and some sort of governance model in place to ensure decisions are made efficiently and with certain rules applied to include everyone.
In other cases, you may also find groups where senior physicians or partners make decisions for the entire group with little involvement from junior-level physicians.
It is also common for to have a formal executive leadership structure in place where decisions are made by a small leadership team.
Business structure, size of the group, and practice model all play a factor in the decision making and governance structure within a group practice.
Financial Management
Bringing in revenue and paying for expenses is still a critical component of running the business, as with the solo practice model, but a benefit with the group model is more physicians bring in revenue. This is also the reason why private practice physicians have a higher earning potential. Private practice can be very lucrative.
This can help offset the financial ups and downs in solo practice and also spreads the overhead costs across all the physicians.
However, major decisions around how to “slice the pie” and profit sharing become important and can serve as a basis for dissatisfaction or animosity when perceptions of “value” are misaligned.
Practice Manager
Depending on the size of the group, you will likely find a person with full responsibility and oversight of the practice management and business aspects.
This is a very attractive component of group practice where someone other than a physician actually runs the business side of things for you. However, working knowledge and understanding of how to manage the practice is still required of private practice physicians.
PRACTICE CHALLENGES
compatibility of personalities and professional outlooks across the group
individual incomes of physicians in smaller groups may be lower than those of solo practitioners
maintaining equity in clinical scheduling
deciding how the group is governed
determining the path to leadership roles within the group
deciding how to “divide the pie”
- Do you want to be independent and not employed but share the burden of running a business?
- Do you want someone else to oversee and manage the practice and business side of things?
- Are you comfortable with a shared decision-making model among other physicians?
- Would you prefer to ensure shared call coverage with your colleagues?
- Are you interested in taking vacations and having the ability to be “off” from work?
- Would a collegial atmosphere be more appealing to you than a solo practice environment?
- Do you want to have others run the operations and provide you with administrative support?
PROS
Less individual risk, built-in call sharing, shared overhead costs, more opportunity for collegial interaction, practice management functions are often handled by a manager
CONS
Less individual freedom, limits on the ability to rapidly grow income, need for consensus on business decisions, may have to accept a junior status and buy in to group
Other Models
There are several practice models and business structures available for physicians in private practice.
HOSPITAL BASED
There are many examples of private practice groups that are hospital based. These are independent physicians that have formed a group practice and serve patients for a particular hospital or health system. An example: Knoxville Neonatal Associates
This is different than hospital-owned group practices where physicians are employees not independent practitioners.
ASSOCIATION
Physicians can form an association to share expenses and practice location but each maintains a solo practice. An example: MidAtlantic Neonatology Associates
PARTNERSHIP
Physicians can form a partnership as co-owners of a business. Each partner has equal rights and shares the risks and management responsibilities with gains and losses typically shared equally. An example (multi-specialty): Boston Children’s Health Physicians
CORPORATION
Physicians can form a professional medical corporation that exists separately from owners and provides a legal mechanism to protect against personal liability from business claims. An example: Fairfax Neonatal Associates
INDEPENDENT PHYSICIAN ASSOCIATION (IPA)
Physicians practice independently without partners or employment affiliations but join an IPA to access the advantages of a large physician network.
The benefit of this model is to form a “group” without forming a group to be able to compete, contract, and create a practice model with a large representation of the market.
Other Examples of Neonatology Private Practices
There are several independent neonatology groups:
Additional Resources
An in depth review of all the requirements to own and manage your own practice along with pros and cons and recent trends.
Outlines the characteristics of the private practice for neonatologists and providers some details to help inform you during your career search.
Gives the differences between an IPA versus medical groups.
