Private Practice versus Hospital Employed

[Mehena]

This particular topic has been discussed before as it pertains to procedure/surgical related specialties. Asking if anyone from experience or research to suggest the pros and cons of each setting within a scope of oncology practice?
Do private practices such as those managed by the US oncology or AON always compensate oncologists more than non-academic hospitals? i.e. the potential pay ceiling is higher?
What are some of the telltale signs of private practices likely to be gobbled up by a hospital consortium?

FYI, I looked at the following threads and more.

pros/cons of academic vs hospital-employed jobs?

there's lots of threads about PP vs. academics but I can't find anything on academics vs. hospital employed. so far what I've gathered: academics pros: don't have to worry about billing, malpractice insurance is provided, residents handle some of the call responsibility, research opportunities...

forums.studentdoctor.net

The bad and the ugly of Private Practice

Junior resident here, probably a little early for such a question, but I’m very curious. What are the major cons of private practice that we might not foresee or be aware of while we are housed within academia for most of training? i always figured I’d be an academic, but the farther I get I to...

forums.studentdoctor.net

Private Practice vs. Hospital Employee

Hi All, I'm trying to make a decision about jobs. One is with a small private practice; another offer is as an employee of a community hospital. Can any of you offer insight about your experiences? Some of the factors I'm considering include: - Compensation - Autonomy (vacation, setting...

forums.studentdoctor.net

Private practice vs. hospital employed

So it appears that there is a trend for new doctors to go into hospital employment vs. pp for the past few years. My understanding is that hospitals are trying to "buy out" private practices. My question is-with the new obamacare law going into effect soon, and the influx of millions of...

forums.studentdoctor.net

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[solidonc2020]

This thread didn't get much traction before, but I would also be interested in hearing opinions on working for private practice oncology groups (with partnership opportunity) compared to hospital based positions.

 

[gutonc]

Employed - More stable, less work, less pay (but still a crapton)
PP (where you eat what you kill) - You eat what you kill. You work your ass off and get paid for it.

That's pretty much it.

 

[IMres85]

Something I’ve always been concerned about with hospital employed is these hospitals (at least where I’m at) seemingly change owners every 5 years. And God knows how the new hospital will treat employees as compared to the last one. I want no part of that kind of stability.

Local hospital where I am recently changed owners and I’ve talked with several physicians who said they would be taking a 6 figure pay cut. One is now commuting 4 hours away during the week

 

[Mehena]

It helps to be in subspeciality currently in demand and a cash cow such as Hematology/Oncology.
I inquired about the above topic during my job search. For Hem-Onc, the typical private practice model is unfortunately becoming more a rarity than the norm. Private equity firms are salivating on the prospect and have encroached and spread their tentacles into previously stand alone private practices in some form or the other. I found little differences between the two settings, may be except for the AGI ceiling. Finally, I decided to take my trades to the devil-I-know AKA Hospital system than to an organization led by some Mr. Donald Smart-Pant, MHA,MBA & his/her boardroom gangsters.

Some info for your curiosity at your leisure : Oncology: Private Equity Investment in Cancer Care - VMG Health Solutions

 

[solidonc2020]

Yeah, I get the bare bones comparison of Hospital employed = less work, less pay (still good compared to academics) but less headaches with overhead, HR decisions, stability, etc, but there are more nuances here right? And is the pay gap between hospital employed groups and PP groups a bigger or smaller gap than the work expectations?

For example, if you're making 50% more at a PP group (say as a partner), I'm guessing that doesn't equate to seeing 50% more patients in hospital employed settings.

 

[DoctorDontStop]

Yeah, I get the bare bones comparison of Hospital employed = less work, less pay (still good compared to academics) but less headaches with overhead, HR decisions, stability, etc, but there are more nuances here right? And is the pay gap between hospital employed groups and PP groups a bigger or smaller gap than the work expectations?

For example, if you're making 50% more at a PP group (say as a partner), I'm guessing that doesn't equate to seeing 50% more patients in hospital employed settings.

Not exactly. In PP in which you partner and have stake in infusion revenue, you could see the same number of patients as Hospital Employed and make way more.

 

[Mehena]

Yes, in theory it would make a lot of financial sense that having a stake in infusion services or real-estate mean more income generated, but I found these financial details are heavily guarded secrets, albeit understandably, from fresh job applicants to make decisions based on comparative potential $income I would be interested to hear what practicing PP oncologists have to say about this topic. I believe there are topics on other subforums about this particular topic, but I still think oncology practice has some distinct edges.

 

[HemeOncHopeful19]

Yes, in theory it would make a lot of financial sense that having a stake in infusion services or real-estate mean more income generated, but I found these financial details are heavily guarded secrets, albeit understandably, from fresh job applicants to make decisions based on comparative potential $income I would be interested to hear what practicing PP oncologists have to say about this topic. I believe there are topics on other subforums about this particular topic, but I still think oncology practice has some distinct edges.

What kind of secrets are you looking for?

The highest paying job is PP with a stake in infusion revenue because this is the model that has the fewest middlemen. I think there are fewer true PP Oncologists on this forum than in other sub forums.

 

[Mehena]

What kind of secrets are you looking for?

The highest paying job is PP with a stake in infusion revenue because this is the model that has the fewest middlemen. I think there are fewer true PP Oncologists on this forum than in other sub forums.

Yes please start by sharing us your last year gross income from your PP and breakdown of income from E/M billing versus infusion i.e services generated.
Thanks in advance

 

[HemeOncHopeful19]

Yes please start by sharing us your last year gross income from your PP and breakdown of income from E/M billing versus infusion i.e services generated.
Thanks in advance

I’m still in fellowship.

I guess I just don’t understand what all that detailed information would give you. Are you saying you don’t believe PP would offer higher potential upside and want numbers to prove it? Or are you just curious how much better the money can be so you can decide if it’s worth it?

 

[gutonc]

Yes, in theory it would make a lot of financial sense that having a stake in infusion services or real-estate mean more income generated, but I found these financial details are heavily guarded secrets, albeit understandably, from fresh job applicants to make decisions based on comparative potential $income I would be interested to hear what practicing PP oncologists have to say about this topic. I believe there are topics on other subforums about this particular topic, but I still think oncology practice has some distinct edges.

It's going to be far too variable across practice situations to generalize. The best thing you can do is to find jobs that interest you and then ask these questions specifically of them.
For PP groups, you need to include things like:

• time to partnership
• % of people that make it to partner
• buy-in cost
• what's included in the partnership (some will have separate buckets for the practice, infusion and real estate with opt-in/out for each, others will be all in/out)
• What share of decision making is included in your partnership
• median annual comp for partners X years out (X=3-5 is a good number)
• anticipated capital expenditures (last thing you want is to buy-in the year before they decide to drop $25M on a new clinic/infusion space)
• overall financial health of the business (ask to see the books including P/L reports and cash-on-hand)

And importantly, what are the plans of the most senior partners? If you've got a couple of senior/founding partners who are nearing retirement, and a local MSG or hospital group hungry for another infusion revenue stream, you can almost guarantee a sell-out in a couple of years if those guys have a majority voting interest.

 

[Mehena]

Thanks @gutonc as always for the sage advice and will certainly help future job applicants. The question was not about PP oncology is more lucrative or not, rather knowing about the nuances of running and being part of such business in the current climate and its potential financial or other implications as a new entrant employee to the market. The business of medicine has changed a lot in the past decades and destined to change, more for some specialties than others. Regardless I'm not suffering from analysis- paralysis and I signed for hospital employed job which I found for the time being to be the best fit for my circumstances, it may change in the future though.

Let me share you, a "real-world " experience from a prior PP oncologist. Forgive me in advance, if cross pollination from a different forum is not allowed.

Failed Private practice - The White Coat Investor Forum - Investing & Personal Finance for Doctors

Has anyone here opened up their own private practice but it did not work out very well. Would you share your view as to why you think you couldn’t make it ? And any advice to someone who might consider it one day thanks

forum.whitecoatinvestor.com

'If the cost of doing business comes close to or sometimes even exceeding your expenses, you only options are to close it down or sell to a hospital group.
I was quite successful in PP hem/onc when the others in town were also PP. Unfortunately the two hospital systems bought out the two groups out and also bought out all the PCPs and specialists like GI and pulm and so there went away my referral base. Also, the hospitals get 340b pricing on drugs which their employed hem/oncs use on even their private insured patients ( when the initial intent was that it was for indigent patients) . So they buy low and sell high. I, on the other hand, am forced to buy high and sell low ( poor reimbursements).

In today's climate I would not start a PP hem/onc practice. I could join the hospital if I wished. But luckily, I learned to be a squirrel during my early PP life and knew the winter was coming. I have saved enough that I could practice for fun / keeping my brain still ticking. I have no idea if you would consider this a failure of PP"

 

[gutonc]

If you had a soapbox you wanted to get up on, you could have just started there and saved me the trouble.