Pros and cons

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

Some solo phyisicians feel engulfed by new mandates, choices and expectations as they struggle to meet overhead and still make a living.

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But Dr. DeMasi does see a downside to employment. “I don’t have as much fun now as I did in private practice,” he admits. “The staff I hired to work in my office had been my patients when I first came out of residency. I delivered their kids.” But the loss of these personal connections has been offset by peace of mind, better reimbursement and the ability to provide for his family.

Family physician Jeffrey M. Stevens, DO, of Rockford, Mich., was in private practice with another physician for four years, watching over “every dollar that came in the door,” before selling to a large multispecialty group practice. “For me, it was a natural transition over,” he says. “I would make that move again tomorrow if I had to.”

Having learned about business the hard way when he was in private practice, Dr. Stevens appreciates the benefits of employment. “My medical liability insurance is completely covered, as are the costs associated with CME. I have paid vacation, health insurance, a retirement plan.

“If you’re in private practice like I was out of residency, you have to set these benefit programs up and fund them, not only for yourself but also for your staff. This was a huge headache for me when I started practice because I had never done it before,” he says.

Breaking point

For Kelli M. Ward, DO, MPH, a family physician in Lake Havasu City, Ariz., it was the high cost of owning an oversized office building that drove her to sell. Dr. Ward and her mother, an osteopathic pediatrician, had started a practice that had grown to include two other physicians and two physician assistants. But after eight years, her mother left to teach at the DO school in West Virginia, the other physicians started their own practices, and the PAs joined another practice group. Ending up a solo practitioner, Dr. Ward was stuck with a custom-built 7,000-square-foot building with multiple examination rooms.

“I rented out part of the building, but it was still so hard to manage with the overhead and all of the stresses of running a business,” she says. “I had a very busy practice, but it was difficult to survive financially. For a couple of years, I didn’t take a paycheck. Practicing medicine became an expensive hobby.

“Luckily, my husband, who is also an osteopathic physician, could take care of our family financially. But there comes a breaking point when you say, ‘I’m not going to keep doing this. I have to make a change.’ ”

Dr. Ward weighed various options. She considered selling the building and renting space from the new owner or moving the practice. But at the time, roughly four years ago, the real estate slump precluded this plan. Selling her practice made the most sense financially.

Proceeding with care

Dr. Ward’s husband, an emergency physician, had worked closely with Flagstaff, Ariz.-based North Country HealthCare, which operates several community health centers throughout Arizona, and knew that the organization was planning to expand. “We knew that North Country was well-run and made a big difference in the communities it served in terms of patient outcomes. So we decided that becoming part of that organization would be good for our community, my employees and my practice,” Dr. Ward says. “I approached North Country and asked, ‘Do you want to open a clinic in Lake Havasu City?’

“It turned out that Lake Havasu was already part of their long-term expansion plan. They liked the fact that I already had an infrastructure in place, essentially a turnkey practice they could walk into. So they decided to acquire the practice and open a community health center in Lake Havasu earlier than they had originally planned.”

The transfer took six months. Among other considerations, Dr. Ward made sure that her employees retained their seniority with the new employer. “They didn’t lose any of their benefits, such as the vacation time they had accrued,” she says. “They also maintained their status of being key, highly valued employees.”

Dr. Ward, who has since left North Country to run for the Arizona Senate, liked being employed because of the steady paycheck, paid vacation and paid CME. “I actually had someone to cover me when I was gone, so there wasn’t a stack of papers waiting for me when I returned from a meeting,” adds the 2010-11 president of the Arizona Osteopathic Medical Association. “Those kinds of things were awesome.”

However, she did miss the freedom she had in private practice. “For example, I could no longer just go out and buy a printer if I needed one,” she says. “If I wanted something, I had to go through a formal process of requesting it.”

Dr. Stevens believes that in most respects the advantages of being employed outweigh the disadvantages, but physicians must take great care in choosing the organization that acquires their practice. It is important to find an employer with a similar approach to patient care and staff management, he says.

Physicians need to be particularly wary of noncompete clauses in employment contracts, Dr. Stevens warns. Some physicians have ended up with agreements that prevent them from practicing within 10 miles of their current office should they decide to resign. In such cases, physicians can lose their patients if they leave.

“Whether you’re considering joining a large group practice or a hospital or whether you are just out of residency and wondering if you should go into private practice, you need to do your due diligence in deciding where you want to be right now and five and 10 years down the road,” Dr. Stevens advises. “If you don’t have the answer figured out up front, you are going to pay the price.”

Dr. Swetech has developed a detailed checklist to help physicians assess prospective employment arrangements. Everything from the physician’s health insurance and medical liability insurance to compensation for office furniture and nepotism policies needs to be addressed, he says.

Individual decision

Whether employment is a better option than private practice depends on a physician’s personality, family status, specialty, locale and debt load.

Some physicians like Dr. Piccinini have a strong entrepreneurial spirit and are willing to work tirelessly and test different business models to make private practice work. A building owner, he leases space to other independent clinicians, with all of them sharing office staff.

While Dr. DeMasi contends that private practice no longer makes sense for the average Ob-Gyn, he believes that certain specialists, such as plastic surgeons and ophthalmologists who do Lasik surgery, can do much better financially on their own.

For primary care physicians, who have strong bonds with several generations of patients, the choice can be particularly difficult. Dr. Swetech, for one, hasn’t decided whether to sell his practice, but he admits to temptation: “I’m keeping all of my options open.”

6 comments

  1. 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. 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. 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. 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. 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. 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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