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The DO | Your Practice | Practice Wise

Thinking about selling your practice? DOs open up on life as an employee

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As a psychiatrist fresh out of residency in the mid-1990s, Robert G.G. Piccinini, DO, chose to seek employment rather than open his own practice. “I was young and didn’t have a patient base, so the security blanket of being an employed physician was very nice,” he says.

Dr. Piccinini negotiated a three-year contract with his employer that specified a bonus based on production, as well as an annual salary. After a couple of years, it became clear that he could make his production bonus three months before the year ran out and that his earnings were essentially capped. So he approached his employer to see if he could share in the additional revenue he would bring in during the last quarter of the year.

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“They said, ‘No. Our contract is our contract,’ ” Dr. Piccini recounts. “So I gave notice and have been in private practice ever since.”

Today, however, the reverse situation of starting a practice and later selling it to become an employee seems to be far more common among experienced osteopathic physicians. Many DOs have become overwhelmed by the ever-increasing challenges of running a business and complying with regulatory and insurance requirements. Those who have become employees or are seriously considering doing believe that the benefits of employment outweigh the drawbacks but warn that contracts need to be worded meticulously, with all contingencies anticipated and addressed.

Arduous demands

Some solo practitioners, such as Stephen M. Swetech, DO, feel engulfed by new mandates, changes, choices and expectations as they struggle to meet overhead and make a living amid inadequate reimbursement. “There are too many demands on us, such as electronic health records,” he says. “I have 60,000 paper charts. To put those on a computer would be very difficult.”

Health system reform, the weak economy, the move from ICD-9 to ICD-10, pay-for-performance and other quality measurement incentives and penalties, and increasingly stringent recertification requirements compound the pressures on independent physicians. “It’s nearly impossible for the solo practitioner to do it all. I’m busting my tail,” says Dr. Swetech, a family physician in Clinton Township, Mich. “You need to become part of a bigger group to get out from under all of this.”

Compounding his challenges is Dr. Swetech’s service to the profession. More than ever, he finds his commitment to organized osteopathic medicine harder to meet. “When I attend the AOA House of Delegates and other meetings, I have to shut down my practice,” he says. “Time away from the office is a major difficulty for solo practitioners, and the problem is worsening with the need for additional and more specific continuing medical education credits to maintain board certifications.”

No going back

Small private practices may face more stressors today, but pressures are nothing new, notes AOA Trustee Joseph M. Yasso Jr., DO, a family physician in Lees Summit, Mo., who is an employee of Hospital Corporation of America.

In the early 1990s, Dr. Yasso and his two partners sold their practice because they were having trouble coping with new, more onerous workplace standards. Moreover, at that time Blue Cross and Blue Shield of Kansas City had been talking about creating its own closed-panel HMO. “Those of us in private practice would have been shut out of Blue Cross and Blue Shield, a huge part of the payer mix in the town we practiced in,” Dr. Yasso says.

Dr. Swetech

A solo practitioner, Stephen M. Swetech, DO, feels overwhelmed by new regulations and other requirements and by the pressure to adopt electronic health records. (Photo courtesy of Dr. Swetech)

Dr. Yasso and his colleagues ended up selling their practice to TriSource, a Kansas City, Mo.-based partnership involving Blue Cross and several hospitals. While being an employee provided some income security and relief, Dr. Yasso lamented the loss of autonomy. “When were were in negotiations to sell the practice, TriSource kept making the point that we would be kept whole and that nothing would change,” he says. “Those were wonderful statements but probably not extremely accurate.”

Nonetheless, Dr. Yasso has never returned to private practice, though he left TriSource after a few years to pursue a career in academia. The costs and challenges of being a small business owner are excessive, in his opinion.
“You have to make payroll on top of paying yourself a salary,” he says. “You have to pay utilities. You have to buy supplies. And if you don’t own your own building, you have to pay a lease.

“And your expenses are not fixed. They go up over time. If your reimbursements aren’t keeping pace with that, you’re going to lose money.”

For obstetrician and gynecologist Mark A. DeMasi, DO, medical liability insurance premiums exceeding $130,000 a year to do both obstetrics and gynecology drove him to close his Hammonton, N.J., practice. “The cost of malpractice insurance was so high, I literally ran out of money,” he says. “I loved being in private practice. I grew up in New Jersey and had practiced there for 15 years altogether. But I also have a set of twins who are in college.”

Dr. DeMasi could have joined a large obstetrics group to remain in the Philadelphia area but chose instead to move to rural New England in early 2010. Employed by Calais (Maine) Regional Hospital as the chief of obstetrics and gynecology, his medical liability premiums were just $6,000 during his first year in the position. Besides relishing the security of a steady paycheck, he likes being able to do both gynecological surgery and obstetrics, which probably would not have been the case had he joined a large specialty group.

6 Responses

  1. GRS on July 6, 2012, 3:26 p.m.

    your examples of private practice at this time are so true, that after 42 years of private practice I want to sell my practice. I will not work under the yoke of buracracy that will make the practice of medicine a trade and not a profession.

  2. robert migliorino,d.o. on July 6, 2012, 9:16 p.m.

    GRS,best of luck to you.Saw similar in South Dakota where 2 partners sold their practice yet continued to practice in it as employees.When they both later realized that the employer was not supporting them as specified,they left & signed up with the VA.After 6 months with VA,both had previously joined the Reserve & both were shipped out to Afghanistan.They had their prior practice for 30 years & when they left,there was no farewell or best wishes by their employer, Rapid City Regional.

  3. Sherry O'Donnell on July 7, 2012, 1:49 p.m.

    I am an internist and have had my own practice for 9 years after being an employed physician in a large multi-specialty group and in the Emergency department. Bar none, the best practice model I have worked in was as a solo practictioner. The autonomy it afforded allowed deeper relationaships with my patients and staff satisfaction was unparalleled.
    While the governmental changes have placed increased workload and demands, I would not trade what I have for an employed position anywhere, so I think much of what has been said regarding the benefits of being employed, must be heavily weighed against one’s personality type and what will bring the greates level of satisfaction. The solo practitioner is unfortunately, a dying breed, but not yet on a respiratory and I’m polly anna enough to believe the tides in Medicine will change. Regards, Sherry

  4. Roselia Conrad, DO on July 8, 2012, 4:25 a.m.

    I have been both employee and self-employed. Being an employee never gave me any professional or personal satisfaction working in corporate medicine. I lost the ability to practice within my value system and the stress of that impacted my personal and professional relationships. The only personal and professional satisfaction has been to work within my own practice, doing the work I love to do, learning to live within my means in order to do the work I love to do, and to be content with my choices. What I would say to any new physician coming out of residency would be to get debtfree as fast as you can, even if you have to put up with corporate medicine for a few years. Then, you will be truly free to make practice choices that will give you the satisfaction and self-respect that makes for a healthy successful life. You can do it, if I can start over and do it at 64. Self-employed and happier.

  5. James Taylor on July 10, 2012, 6:32 p.m.

    I have always told my patients I used to work for the largest HMO in the world prior to coming to Jackson, MI. It really peaked their interest. It was the penultimate waste of time and talent. I was in a hall with 3 physicians and 2 medical assistants, did my own rxs, xray requests, lab requests, referrals, and GASP! bubble forms! Lets see the equivalent to that is selling my practice because I cannot afford EHRs and the staff to run them, then becoming an employee to do exactly what I found so wasteful (expensive) for yet another large HMO. The former: the US Army, the latter Medicare/Medicaid/Obamacare. I will retire before I waste my 12 years of school, 5years of college, teaching degree, DO degree, internship, residency, fellowship, preceptorship at a local university and last but certainly not least, the opportunity for a real physician-patient relationship not corrupted by government bureaucracy.
    By the way, all of you DOs who have hired NPs and PAs and “extenders,” how’s that working out for you? How will you feel when the government replaces you with them, or worse yet, forces you to go to one when your physician retires? Hands on physician care is the best value in medicine-for the price of am MRI I can see 70 Medicare patients. Seventy. Think about that when your physician retires. Things haven’t changed much, have they?

  6. JJ on Jan. 6, 2013, 1:42 p.m.

    Hi,
    I am a 4th year medical student, and although I am a ways off from being employed on my own. I’m still curious as to the benefits of having a private practice or being employed by the hospital. Ideally, I would like to have my own private practice. Is it still feasible? should future graduates even consider it? or just jump at the first offers we get after residency?

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