Should I have another job or concentrate on my solo practice?
One popular way go solo is to do what Ho Sun and I did- to start from scratch, which is to find your office and equip it and work there full time. But there are other pathways to wind up with the same result. Another common way is to buy someone else’s practice, usually someone who is retiring or perhaps relocating. We will shortly have posts about practice valuations, pitfalls to look for when buying a practice, and the pros and cons of buying a practice versus starting from scratch soon.
Ho Sun and I made our practice our full time job, but many docs who we know started out with a job and transitioned out of it. The most common transition we have seen is from academics- someone might be full time in a university position or at a VA Hospital, and then open up shop and work half time in academics and half in their practice. As their practice gets busier, then they slowly drop days in their full time job, and eventually work full time in their private practice.
One of our friends worked full time at the VA hospital. He switched to working half time. Within a year, his solo practice was so busy that he completely left the VA job. Depending on your location, the local academic program or VA may really need docs to staff the clinic. So even if you are starting from scratch this is something to consider.
It’s also common particularly for ophthalmology sub specialists, especially oculoplastics and retina, to spend a half day or two in a comprehensive ophthalmologist’s office, or a local group in town, seeing patients referred from that doc or group at the same time trying to launch their solo practice.
When I was a resident, I actually had a retina attending that filled his schedule teaching at two universities and going to four or five different ophthalmologist or optometrist’s offices. We also know of comprehensive ophthalmologists that go to an optometrist’s office for a half day or two to see their consults. Another example, I know of a oculoplastics surgeon who works in two offices, goes to a comprehensive ophthalmologist’s office a half day every other week, and the county hospital twice a month. One retina doc we know had three jobs- one at the big multi specialty group two days a week, one at a local ophthalmologist’s office, and two days at his solo practice. As his solo practice expanded he cut day out of the other gigs.
There may be a part time job in the next county over where a big group may need someone to fill in to see patients. Indeed, many practices who hire a associate have too much volume for the physicians currently there, but not enough volume to justify a full time new doctor. We know of some solo docs who work at practices such as this a few half days per week while they startup. I know of a doc who worked for a group that asked him to stay on part time for six extra months while they found a replacement for him. They scheduled him in the clinics on the other side of town where he opened his solo practice.
Another way to pay the bills is to take trauma call; often there is a shortage of doctors willing to do this, and depending on the level that the trauma center is, there will be a stipend to take call. But for ophthalmology at least, this isn’t the way to build a solo practice, although it will pay the bills while your solo practice builds.
Ho Sun and I were very happy with the way things turned out with our respective practices. The first few months when we were only seeing three or four patients per day, we had time to learn the ins and outs of running the practice, which made things more efficient for us once we got busier. I wasn’t the least bit interested in combining a side gig with my solo medical practice startup. But our way isn’t the only way or best way; there are plenty of different routes to get to the same result.
Do I need my own office?
We know of some docs who went solo even without their own office. They lease from other docs- for example the retina specialist who went to two universities and five offices. If you at a subspecialist, you can lease from a comprehensive ophthalmologist. But, it might be difficult to get other comprehensive ophthalmologists to refer to you at that office- especially the two comprehensive ophthos consider each other as competition. A good combination might be oculoplastics and retina; there’s no potential conflict of referral patterns if one leases from the other. Or if your friend that’s a GI doc has extra exam rooms in each of his three offices, go for it.
In our google group I know of two oculoplastics docs who started this way. They became so busy and successful they finally needed to find their own office. In my opinion it would be good to get the task of finding a office over with before opening, but I suppose one advantage of waiting would be to see where you wind up being busiest and opening your own office at that location, and continuing to use other offices as satellites.
To save on startup costs and rent should I join forces with another ophthalmologist to open a office?
Usually not. The economics simply don’t make sense. Although the cost to acquire equipment and office rent sounds expensive, rent is typically between only 5-10% of net practice income, and that equipment can last for many years and will have a residual resell value. If you join with another ophthalmologist that treats the same conditions as you, then you will be “competing” with each other for patients; your practice will grow only half as quickly. Also, the whole purpose of going solo is to make your own decisions without having to answer to anyone else.
Having said that, we know of several husband and wife teams who started together, as well as two colleagues who both have part time jobs at a academic center. When one doc is at the academic center, the other is at the private practice. Another possible combination would be two fields that don’t compete with each other for patients or have conflicts with referring doctors, such as oculoplastics and retina.
We also know of some docs who left a multispecialty group and then joined forces with a local solo doc for office sharing. They each have their own company and make their own schedules and business decisions but share rent, equipment (one leases to other) and sometimes even employees, but since they own their own companies they still make a lot of their own decisions. This probably works best when you located close to your previous practice, have a small or nonexistent noncompete clause, and have a lot of patients from your previous practice following you. If you are starting from scratch and the existing doc is still looking to grow their practice it might be more difficult for this arrangement to thrive.
What route do most people choose to go?
My unscientific estimation for our google group is that a 25% started from scratch like myself and Ho Sun, 40% started in conjunction with another part time job, and 35% purchased a existing practice.
A company approached me about setting up my practice. Should I use them?
Absolutely not. There are some companies known as PMPC (Physician Management Practice Companies) that promise you the independence of running your practice. They take care of your credentialing, billing, purchasing, and sometimes HR and hiring. Often you give up your tax ID number. They promise you that you can concentrate on what you’re good at- being a doctor, while they take care of what they’re good at- the business side of things. They talk about the efficiencies of scale. Go back and read my efficiencies post.
Even if the company promises you the moon about your independence, they may eventually sell your practice to private equity, who might have different ideas such as booking evenings and Saturdays. Don’t do it.
Another version of this is “my friend who is a savvy businessman offered to set up my practice in exchange for 5% equity.” So you’re going to give away 5% of your revenue forever? Over 20 years that’s 100% of collections- for the typical practice that’s twice your salary. Even a consultant can do all this for $50,000, but how do you know that your friend or a consultant will do a good job? Go back and read Ho Sun’s post about consultants…