Owning a medical practice is hard work, but it can also be among the most rewarding things you’ll ever do.
That balance between grit and gratification doesn’t suit everyone: Increasingly, more physicians choose employed work over practice ownership — especially young doctors, who have student loans to reckon with.
Still, with 45.9% of physicians involved in a self-employed medical practice business model, as the American Medical Association reports, opportunity awaits those who want to give solo or group practice ownership a try, either through buying an established practice or starting one from scratch.
Sound like you? If so, you already know it won’t all be booked-up schedules and dollar signs — certainly not at first. If you’re thinking of heading down this path, there may be some realities you haven’t yet fully considered. Give yourself a head start by coming to terms with them now.
1. Changing Health Policy Can Keep You on Your Toes
When you own your practice, the onus is on you to comply with government regulations and requirements such as those surrounding Medicare or HIPAA — but those regulations are always in flux. For example, as Business News Daily notes, the increasing prevalence of cybercrime has created even more opportunities to unknowingly violate HIPAA and incur steep fines due to faulty security.
This requires all practice owners to stay updated with current requirements, but more importantly, it means that you may want to consider investing in a compliance officer trained to navigate the sea changes of health policy. The American College of Physicians also maintains a library of regulatory resources for medical practices.
2. Costs Can Make Things Tight
Overhead and sunk costs like rent, technology, workers’ compensation and malpractice insurance are necessary for running a medical business, but they can easily get out of control if you don’t keep tight reins on expenditures. Couple those increasing costs with reduced reimbursements, and it’s clear that doctors are pinched for revenue on both ends — which means that reviewing receipts, scrutinizing contracts and comparing vendors becomes all the more important when your bottom line is on the chopping block.
3. Marketing Can Be Its Own Full-Time Job
Large health systems may be able to hire internal marketers or agencies, but private practices often assume marketing themselves, which is why it tends to get pushed to the backburner.
Because you can’t rely on word-of-mouth to fill your patient pipeline, you’ll need to prioritize marketing — creating a website and social media, generating press, advertising, handling bad reviews and taking part in community events. For a budget-friendly way to get started, search LinkedIn for a freelance marketer or contract with a local agency to help create a sustainable marketing strategy.
4. Freedom Can Be Limited at the Outset
Few practice owners have the absolute freedom to take off whenever they want. When you’re on vacation, revenue generation is limited, which means many practice owners work long hours with few opportunities for time off.
To help offset this, ensure that you hire profit-generating clinician roles so that it’s business as usual when you’re gone. As FierceHealthcare reports, choosing nonphysician providers such as nurse practitioners can be a great way to do exactly that.
5. Working With Insurers Can Be a Challenge
There are many nuances to working with insurers, and each health plan can be radically different. Some providers have trouble getting accepted onto health insurance panels as a solo practitioner, so it’s not uncommon for practice owners to prefer a group medical practice business model for the benefit of larger scale and more negotiating power.
Once you do have a portfolio of accepted plans, finding the right claims administrator to handle those aspects of the business can optimize your financials while giving you more time to spend with patients. You’ll also want to keep current on coding to ensure claims are submitted appropriately.
6. People Skills Are Central
Even the most qualified group practice can fail if it’s built on the shaky ground of an untenable partnership — especially if physician owners have conflicting visions.
Ideally, most practice partners will vet each other when exploring a group medical practice setup, but there may come a situation for which you’ll need to pivot mid-stream. One owner told the Review of Ophthalmology that a bad partnership experience ultimately caused him to move from a joint venture to a solo practice — which ended up being the right choice for him overall.
You Have All the Tools You Need
With these insights in mind, it might seem like private practice is more hassle than it’s worth — but the anecdotes of happy, successful physician owners tell a different story. While there may be more legwork in sustaining a medical business, the fruits of that labor can be ample and lasting.
After all, as one practice owner told the American Medical Association, as long as you have drive, a desire to learn and a basic command of profit and loss, you already have all the tools you need to make it work. Go for it!