Diagnosing, treating, and managing your patients’ conditions requires, among other things, the capacity for independent analysis and effective collaboration with your clinical colleagues. Opening a private practice, that setting—is a practice wholly owned by physicians rather than by a hospital, health system, or other entity. It also rewards those traits and remains a strong option. Especially if you are looking to be your boss and work with like-minded colleagues to serve your community’s medical needs.
Opening A Private practice and the professional autonomy it brings have been the career-long choice for oncologist-hematologist and AMA President Barbara L. McAneny, MD. When she and her partners at the two locations of the New Mexico Cancer Center want to provide new services to patients, they own the process.
“We didn’t have to go through 27 hospital committees and ask permission from a bunch of vice presidents for various things,” she said. “We just sat in a room. The group said, ‘Figure out how to do it. Let’s do it.’ And we did it. It is gratifying.”
Some practices have a one- to two-year partnership pathway. Once you reach the level of physician partner, you will typically have a “vote on what services you want to offer, new projects, adding more physicians,” among other things, Dr. McAneny said.
“That last thing is significant. We spend more time with our partners than our spouses, and we trust our partners with the care of our patients when we are not available,” she said. “Practices go through a significant process to make sure everyone works well together.”
Opening a private medical practice is a challenging process. Still, it can be easier if you break it down with this step-by-step guide.
Opening A Private Medical Practice is an exciting way to take the practice of medicine into your own hands. Unfortunately, it is also complicated and challenging. For your medical business to be successful, you need a clear and detailed plan at the outset to keep things moving on schedule. Perhaps this guide can help you start your private medical practice.
Why open your own practice?
Security in partners, not bosses.
That ownership vision of medical practice is one that fewer physicians are exposed to, especially those at the start of a medical career.
“Professors and mentors often tell them that independent practice is dead and you shouldn’t consider going into that,” said Dr. McAneny. “I think they do a disservice to their students when they say that.”
Student-loan debt often enters the picture by making it challenging to finance private practice. But there are some important financial factors to consider. Beyond the compensation, physicians see on an annual basis lies the value of the doctor’s practice ownership stake.
“When you leave a practice, you have built up equity as an owner, and your buyout helps fund your retirement,” Dr. McAneny said.
Another is that multi-year employment contracts on offer may not be what they seem.
“I’m starting to see a lot of people who have a contract for employment with a 90-day out clause. That means you don’t have a year or two-year or three-year contract. You have a 90-day contract,” said Dr. McAneny. “In my practice, it would take 80 percent of the vote of the partnership to remove me. So that’s security.”
Assumptions about work-life balance are another potential landmine. Physicians believe that an employer’s business sense will indeed extend to efficiency and support. But what Dr. McAneny said she hears from employed physicians “all across the country is that they’re spending their evenings till 10 o’clock clicking in their electronic medical records.”
The inherent risk, upfront expenses, and difficulty opening your own practice may explain the breakneck pace of consolidation within the healthcare industry. According to Becker’s Hospital Review, 60% of community hospitals are part of an enterprise health system. That trend is likely to continue through 2025 when the healthcare industry is projected to reach $5.5 billion in value.
Be your own Boss
The influence of large enterprise systems and big-name hospitals over healthcare providers has grown as control of the industry. And what’s shocking is that it has become concentrated in fewer hands. For many providers, joining these conglomerates seems to be the only realistic choice. Indeed, after spending so much money and time attending medical school, why go through the risk and trouble of starting a medical practice of your own? When you could step into a well-paying job, where business operations are already established, and there are no overhead or startup costs to you?
For starters, when smaller, private practices open, it means more competition and a more widespread distribution of profits throughout the industry. It also means that more healthcare providers are granted more autonomy, becoming free to determine their own workflows. Another major byproduct of proliferating smaller practices is that they help expand healthcare access to local areas that might currently be underserved.
Also, the ability to “be your own boss” is a significant draw for entrepreneurial providers who choose to enter private practice. The sense of ownership and agency that comes with running your own practice is unmatched in a more extensive hospital system.
The good news is that, as difficult as it can be to get your practice started, it’s well within reach if you have the correct information.
Types of medical practice to consider starting
When you decide that starting a private practice is in the cards for you, you have five types of medical practice to consider.
When you start a solo medical practice, you take on almost all the responsibility. This gives you complete control of how your practice operates, but you may encounter higher startup costs for things such as marketing and medical equipment, and you’ll undoubtedly have to put in more hours since you’re working on both the business and clinical sides. On top of this, you’ll take on all the other risks of starting a business.
When you start a group medical practice, you share the work burden evenly with other medical professionals, so you’ll work less. These shorter hours come at the expense of the total control you have with a solo medical practice. Still, you may have easier access to working capital, thereby lowering your startup costs.
Suppose you start a medical practice within a hospital network. In that case, you will work on a schedule and be subject to certain employee constraints. Still, you’ll have the hospital’s working capital and marketing resources at your disposal. You’ll also minimize the risk involved in starting a new business, though you may not have as much personal flexibility and freedom; you may have to work within the boundaries set by a medical board. Joint ventures with hospitals account for 16% of urgent care clinic ownership, so hospital-owned businesses may be right for you if you’re interested in critical care.
4.Federally qualified health center
Suppose you start a medical practice within a federally qualified health center. In that case, your launch will work almost the same as it does when you go the hospital-owned route. With federally qualified health centers, you may run up against small caps on working capital based on federal resource allocation.
5.Academic health center
As with hospital-owned practices, when you start a medical practice within an academic health center, you minimize risk while sacrificing autonomy. Unlike with a federally qualified health center, though, you’ll experience few caps on working capital.
“Opening a new medical private practice will be the most exhilarating and scary thing that you will ever do in your career,” Inselman said. “When we coach our clients on opening up a medical, dental, chiropractic, or any other healthcare practice, the first thing we advise is to assemble your team.”
It will take time, money, and effort but it will all be worth it. If you think it’s the best path for your medical career, you should consider and start a private practice.