Associates vs owning practice: pros and cons

[thefootfixer]

Figured it would be a nice way to kick off the new year in helping practicing docs and soon t be attendings really gauge what way they want to go. I know we have plenty of people on here that have experience in these areas. Some may be current associates, former associates, current owners and future owners. Let’s get this thread going and hear some pros and cons of whatever area of podiatry you’re in …and what newcomers can learn to make the best informed decision for themselves in this crapshoot of a field! Let’s get it!

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[pod squad]

As a 3rd year associate the only 'pro' that I'm seeing is not worrying about the stresses of running a business/overhead. But I think anyone with a little business acumen and ability to tolerate risk would be better off owning their own practice compared to being a PP associate. Making $0.40 for every dollar I bring in (with no benefits/malpractice coverage) is getting old...

 

[podiatryresident]

I think a lot of new graduates want to open practice but they don't know how to start. Wondering if any Attending here can open the consult service for new practices. I'm willing to pay to get the real help from experienced attendings here. Thank you

 

[Adam Smasher]

If you want to go solo straight out the gate, find someone who's retiring or close to retirement and buy them out. It will cost more, but you'll be taking over an established practice with equipment/staff. You'll be busy, you'll have to overhaul all the old stuff, and you'll hate yourself for funding this dude's retirement, but it's safer than risking everything on a fresh solo venture.

I'll write a longer answer to this question, stay tuned...

 

[Feli]

Associate work is beneficial to learn how to bill and run a biz (assuming you pick decent employer/mentor), might be only choice in many metros since a startup is highly expensive + risk, or might just fit some ppl personality better if they want to have little responsibility and predictable hours (and contrary to what gets posted on here, plenty of fair/good paying PP associate jobs - esp big groups).

PP owner is better if you like to be your own boss, in almost any rural or areas where startup is affordable, if you want to make more of what you bring in, if you can't find a high/fair pay employ job with PP or hosp, etc.

 

[heybrother]

Pros of being an associate:
-You enjoy having anxious diarrhea and being told what to do
-You want to keep yourself available for employment at a VA, hospital, or MSG
-You enjoy the thought of making $75-100K in diverse cities across the country
-You enjoy supplementing your income with nursing home work
-You enjoy challenges like being limited in what hardware you can use or where you can perform surgery
-You don't want to worry about saving money - you won't make any and you won't have a 401k to put it in
-You can live near your family in NY/NJ and be unhappy just like all the people there
-You enjoy volunteer work taking free-call at emergency rooms and hospitals near and far from your clinic.
-You like the idea of just completely uprooting yourself and moving 50 miles away for a year or two at a time
-You want to learn someone's system for pushing tolcylen, laser, custom orthotics, etc on every patient
-You want to complicate your path to trying to get ABFAS certified by spreadingyour case load across practices that won't share your records with you

 

[icebreaker32]

Associate pros:

You can potentially walk away for a better organizational job without too much lead time.

You MIGHT get your surgical numbers for boards faster than if you opened on your own practice, but you better get copies of all the notes and paperwork needed for this before you announce you will leave.

You can SOMETIMES learn practice management skills which really helps if you might open your office someday.

You are OCCASIONALLY in a fair situation for partnership or attainable bonuses and can avoid all the headaches and cashflow concerns of opening a business.


Associate cons:

Non compete if you leave and want to stay in area

Longterm job security (can be let go at almost anytime for any reason)

Too many others to list....half of the posts on this this forum discuss the potential cons of working as an associate


OWNING

PROS:

More upside potential/more income generating opportunities.

Many potential tax advantages if doing very well.

You make all the decisions

CONS:

Usually negative cash flow in the beginning

Risk of bankruptcy if does not take off fast enough

You pay for all your benefits and payroll taxes (not that associate benefits are usually great to begin with)

Some insurance plans can be hard to get on

You make all the decisions from the big ones to the small petty ones like having to creatively and cautiously settle arguments with staff

You will likely wear many hats in addition to being a doctor. HR, marketing, IT and a dozen other things in the beginning. You will pay for more and more of these services as you grow, but to minimize expenses you will do what you can to save money.

Loans can be hard to obtain

Good employees can be hard to find. It takes time to train when employees turnover which reduces efficiency.

Temptation to do scammy things to improve cash flow.

Depending on peers in the area coverage might be hard to obtain when you are out of town. Sometimes there are very friendly peer relations in an area and sometimes it is very much the opposite and very dirty business tactics against competition.

You might not take many vacations the first few years.

Very hard to move/switch jobs

You likely will not have every type of insurance, but are vulnerable to so many situations where you could have a period of negative cash flow. Everything from malware, natural disasters, an injury to self, employee theft, and employee that leaves and important stacks of paperwork can not be found. You can save some of those headaches by having a billing company, but they need to be monitored also.

 

[dtrack22]

might just fit some ppl personality better if they want to have little responsibility and predictable hours (and contrary to what gets posted on here, plenty of fair/good paying PP associate jobs - esp big groups).

Unfortunately not the norm but let’s pretend…

You are an associate. Basic benefits are covered. You get 40% of collections in a reasonably busy practice. You have $800k in collections. You primarily work 9-5. You have zero business or admin responsibilities. Just show up, treat patients, do notes and leave. You get paid $320k before taxes. Sure, you never “own” anything but neither does a hospital employee. And you probably aren’t getting retirement match, but you could fully fund a 401k and still have a gross income of $300k. Really not a bad gig and makes being a permanent associate a lot more appealing.

The problem is that 40% of collections is way more rare than it should be in podiatry. You are much, much, much more likely to be getting something more like 30-33% collections as an effective pay rate. When that’s the case, as it most often is, then permanent associate-ship is not very appealing.

 

[pod squad]

Really not a bad gig and makes being a permanent associate a lot more appealing.

Now imagine you're the owner making 480k off of the associate's work with almost no change in your overhead...talk about appealing!

 

[619]

I think a lot of new graduates want to open practice but they don't know how to start. Wondering if any Attending here can open the consult service for new practices. I'm willing to pay to get the real help from experienced attendings here. Thank you

The Top Practices Podiatry Practice Management Program Mission

Management can make or break a practice’s success. Rem Jackson, Dr. Peter Wishnie, & Tina DelBuono teach you the skills to run a great and growing office.

www.toppractices.com

Not endorsing them in anyway and I never used them to open my practice. But this sounds like what you are referring to. Good luck!

 

[619]

This thread is full of cons of being an associate so I don't know what else to add. If after reading all the cons of being an associate then taking a step into the unknown world of being a practice owner seems like a no brainer (to me). I started as an associate like most here, typical podiatry practice with $100k base and the usual % in bonus collection. Learnt a lot as an associate in PP before i decided to go solo.

To be clear, I had a good experience as an associate, nice boss and nice colleagues however I knew that I was not going to pay back my student loans, or buy a house or take care of my family the way I envisioned with an associate contract. Podiatry is a long schooling time and sacrifice to earn less than a nurse.

My advice to anyone will be the same as what I did. Work as an associate fresh out of residency to learn everything from treating patients to billing. Interact with all the staff and learn a lot from the experienced MAs. I mentioned before that my MA said to be that I was too independent because I did not mind doing all the things that they did. I did not wait for them to set up my procedure tray. I did it myself. I did not wait for an MA to be in the room to assist me in procedures. I did it myself. Those skills were needed when I went solo because I did not hire an MA. I was 100% confident with all the back stuff. Only hired one front desk staff at the beginning. I will not be able to do this if I did not first work as a associate.

You will likely wear many hats in addition to being a doctor. HR, marketing, IT and a dozen other things in the beginning. You will pay for more and more of these services as you grow, but to minimize expenses you will do what you can to save money.

Being a business owner is a natural skill. It can't be taught. It is true that you have to be ready to wear many hats. If you are worried about not being able to a vacation then you have no business owning a practice let alone any kind of business.

Employer vs employee mindset is totally different. However once employees taste the sweet fruit-juice of keeping 100% of your earning after overhead then you will never want to work for a soul again.

 

[Adam Smasher]

Associate pros:

You can potentially walk away for a better organizational job without too much lead time.

You MIGHT get your surgical numbers for boards faster than if you opened on your own practice, but you better get copies of all the notes and paperwork needed for this before you announce you will leave.

You can SOMETIMES learn practice management skills which really helps if you might open your office someday.

You are OCCASIONALLY in a fair situation for partnership or attainable bonuses and can avoid all the headaches and cashflow concerns of opening a business.


Associate cons:

Non compete if you leave and want to stay in area

Longterm job security (can be let go at almost anytime for any reason)

Too many others to list....half of the posts on this this forum discuss the potential cons of working as an associate


OWNING

PROS:

More upside potential/more income generating opportunities.

Many potential tax advantages if doing very well.

You make all the decisions

CONS:

Usually negative cash flow in the beginning

Risk of bankruptcy if does not take off fast enough

You pay for all your benefits and payroll taxes (not that associate benefits are usually great to begin with)

Some insurance plans can be hard to get on

You make all the decisions from the big ones to the small petty ones like having to creatively and cautiously settle arguments with staff

You will likely wear many hats in addition to being a doctor. HR, marketing, IT and a dozen other things in the beginning. You will pay for more and more of these services as you grow, but to minimize expenses you will do what you can to save money.

Loans can be hard to obtain

Good employees can be hard to find. It takes time to train when employees turnover which reduces efficiency.

Temptation to do scammy things to improve cash flow.

Depending on peers in the area coverage might be hard to obtain when you are out of town. Sometimes there are very friendly peer relations in an area and sometimes it is very much the opposite and very dirty business tactics against competition.

You might not take many vacations the first few years.

Very hard to move/switch jobs

You likely will not have every type of insurance, but are vulnerable to so many situations where you could have a period of negative cash flow. Everything from malware, natural disasters, an injury to self, employee theft, and employee that leaves and important stacks of paperwork can not be found. You can save some of those headaches by having a billing company, but they need to be monitored also.

I agree 100% which is why I don't feel like I need to add anything else

 

[Pronation]

tldr; you will get screwed hard if you're an associate.

 

[Feli]

Unfortunately not the norm but let’s pretend…

You are an associate. Basic benefits are covered. You get 40% of collections in a reasonably busy practice. You have $800k in collections. You primarily work 9-5. You have zero business or admin responsibilities. Just show up, treat patients, do notes and leave. You get paid $320k before taxes. Sure, you never “own” anything but neither does a hospital employee. And you probably aren’t getting retirement match, but you could fully fund a 401k and still have a gross income of $300k. Really not a bad gig and makes being a permanent associate a lot more appealing.

The problem is that 40% of collections is way more rare than it should be in podiatry. You are much, much, much more likely to be getting something more like 30-33% collections as an effective pay rate. When that’s the case, as it most often is, then permanent associate-ship is not very appealing.

I agree fully.

I have met more than a handful of ppl who have a high-earner spouse and want time with kids, etc, though... associate or "junior partner" works ok for them (at least for awhile). Some do entrepreneur or hospital job if those lanes are open to them, but many just don't want those hours or on-call.

 

[diabeticfootdr]

I became a Hospitalist podiatrist in California.

I was in private practice but did only hospital work. My outpatient office was the wound care center, but it could be any HOPD. I did admits, consults, and surgeries at the hospital. I didn’t have to pay any typical overhead.

I worked out an income guarantee with the hospital (standard at California hospitals) for $270,000 (in 2009) which included $30,000 in expense reimbursements (malpractice, health insurance, billing, etc).

The hospital divided the guarantee by 12 and paid me at the end of each month by this formula: Monthly guarantee - actual collections that month = payment.

The guarantee goes on for 1 or 2 years and then you pay it off by time (staying an additional 1 or 2 years).

At the end of the guarantee you should be up and running as a hospital-based private practitioner.

I’ve always advised young podiatrists that this is one of the best ways to get started in PP and you’re in charge from day 1.

Of course, you don’t really own anything, like a building (creating equity) or equipment, but you also don’t have any overhead.

 

[Pronation]

I became a Hospitalist podiatrist in California.

I was in private practice but did only hospital work. My outpatient office was the wound care center, but it could be any HOPD. I did admits, consults, and surgeries at the hospital. I didn’t have to pay any typical overhead.

I worked out an income guarantee with the hospital (standard at California hospitals) for $270,000 (in 2009) which included $30,000 in expense reimbursements (malpractice, health insurance, billing, etc).

The hospital divided the guarantee by 12 and paid me at the end of each month by this formula: Monthly guarantee - actual collections that month = payment.

The guarantee goes on for 1 or 2 years and then you pay it off by time (staying an additional 1 or 2 years).

At the end of the guarantee you should be up and running as a hospital-based private practitioner.

I’ve always advised young podiatrists that this is one of the best ways to get started in PP and you’re in charge from day 1.

Of course, you don’t really own anything, like a building (creating equity) or equipment, but you also don’t have any overhead.

What on earth is a hospitalist podiatrist??

Also I would highly advise against anybody taking a job with an “income guarantee” which is much different than a “guaranteed salary” - the first is a loan while the latter is your money no matter what. An organization could have you trapped for years with a huge loan if things don’t work out.

Physician Compensation: Income Guarantee vs. Guaranteed Salary | Physician Career Planning

 

[Scrantonicity]

What on earth is a hospitalist podiatrist??

Also I would highly advise against anybody taking a job with an “income guarantee” which is much different than a “guaranteed salary” - the first is a loan while the latter is your money no matter what. An organization could have you trapped for years with a huge loan if things don’t work out.

Physician Compensation: Income Guarantee vs. Guaranteed Salary | Physician Career Planning

Maybe...but either one is worlds better than joining a podiatry practice as an associate. Now that I'm finally out of that environment, if someone told me I had to either go into landscaping for the rest of my life, or be an associate again...I'd go sharpen the lawn mower blades

 

[diabeticfootdr]

What on earth is a hospitalist podiatrist??

Also I would highly advise against anybody taking a job with an “income guarantee” which is much different than a “guaranteed salary” - the first is a loan while the latter is your money no matter what. An organization could have you trapped for years with a huge loan if things don’t work out.

Physician Compensation: Income Guarantee vs. Guaranteed Salary | Physician Career Planning

California is a corporate practice of medicine state. Most hospitals are prohibited from paying any doctor a salary (Government and foundations are exceptions).

The income guarantee is the common and only way to get doctors started and it’s a loan paid back with time.

Hospitalist podiatrist = DPM who only works in a hospital

Don’t worry everyone, it’s not a new subspecialty or a CAQ, just a reference to where you work.

 

[Pronation]

Maybe...but either one is worlds better than joining a podiatry practice as an associate. Now that I'm finally out of that environment, if someone told me I had to either go into landscaping for the rest of my life, or be an associate again...I'd go sharpen the lawn mower blades

You would think but if the business isn’t there, you can easily accumulate a huge debt. Now going into year 2 or 3 with 100-250k in debt they will surely chop your salary to begin recovering their money. So now imagine being potentially trapped at this job now making only 120k while you pay off a 200k debt over a few years.

 

[AttackNME]

California is a corporate practice of medicine state. Most hospitals are prohibited from paying any doctor a salary (Government and foundations are exceptions).

The income guarantee is the common and only way to get doctors started and it’s a loan paid back with time.

Hospitalist podiatrist = DPM who only works in a hospital

Don’t worry everyone, it’s not a new subspecialty or a CAQ, just a reference to where you work.

What type of inpatient medical stuff are you managing when you admitted those patients?

 

[LossToFollowUp]

Private podiatrists have primary admitting privileges? I understand hospital employed/residency programs having to admit but...private???

 

[NatCh]

Pros of being an associate:
-You enjoy having anxious diarrhea and being told what to do
-You want to keep yourself available for employment at a VA, hospital, or MSG
-You enjoy the thought of making $75-100K in diverse cities across the country
-You enjoy supplementing your income with nursing home work
-You enjoy challenges like being limited in what hardware you can use or where you can perform surgery
-You don't want to worry about saving money - you won't make any and you won't have a 401k to put it in
-You can live near your family in NY/NJ and be unhappy just like all the people there
-You enjoy volunteer work taking free-call at emergency rooms and hospitals near and far from your clinic.
-You like the idea of just completely uprooting yourself and moving 50 miles away for a year or two at a time
-You want to learn someone's system for pushing tolcylen, laser, custom orthotics, etc on every patient
-You want to complicate your path to trying to get ABFAS certified by spreadingyour case load across practices that won't share your records with you

Don't forget:
- You get to hand out foot-shaped cookies to referral source's offices every holiday season while wearing a stupid Santa hat.
- You get to be bossed around by your boss' spouse whenever they make their monthly rounds through the office.

 

[diabeticfootdr]

What type of inpatient medical stuff are you managing when you admitted those patients?

In California, we were in a private hospital with no residents (for podiatry or anyone else). We wrote all orders for their home meds, insulin management, anticoagulation, etc and consulted medicine for clearance or changes in condition.

At UT, we are the admitting service, start the process with orders for necessary tests (labs, imaging, ECG), but Family Medicine has a large training program and consults on every patient. We focus on the antibiotics, anticoagulation, pain, hemostasis.

In either case, being the admitting service, we coordinate the entire care by getting necessary consults in the right order, timing of echos/cardiac stress tests/revascularization vs the urgency of pod surgery. Then we coordinate the discharge. And hopefully all that happens under the GMLOS.