Private practice vs. hospital employed

[Mark ENT]

Hey guys. I'm in my fifth year of residency and starting to plan my life with my wife. I've been looking to settle in a particularly underserved area in the midwest. There are two hospitals in particular (about 20 miles from one another) who have each been starving for an ENT for a number of years. I've already interviewed at one of them and gotten an offer and I'm waiting to interview at the second before deciding. There is only one other ENT in a third town who serves the entire county of about 100 000. He's busy as hell and nearing retirement, which is why the two other hospitals are trying to get in on the action.

Anyhow, each of the two hospitals are offering hospital employment with a sick salary guarantee, with RVU bonus, tons of benefits, with the option of transitioning to private practice at some point if I so choose. If I decide to go the PP route, they'll provide me some sort of medical management resources.

I'm a pretty entrepreneurial type of guy with a lot of motivation. I want to start doing allergy tests (no competition in the county), hire an audiologist and sell hearing aids....maybe even a sleep center, or even Botox services. Again, there's little to no competition.

The question really pertains to the current realities of running a solo private practice. I don't know if the income I would make from my work and the ancillary stuff could match what they're offering as an employee which is 350-400K per year. If I'm going to be running all these extra services, employing people and so on, I want it to be worth my time and effort....if it's only for an extra 50k a year then it may not be. What do you guys think? As a solo guy, would it even be feasible to employ a full-time audiologist? Thanks.

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[OtoHNS]

Hey guys. I'm in my fifth year of residency and starting to plan my life with my wife. I've been looking to settle in a particularly underserved area in the midwest. There are two hospitals in particular (about 20 miles from one another) who have each been starving for an ENT for a number of years. I've already interviewed at one of them and gotten an offer and I'm waiting to interview at the second before deciding. There is only one other ENT in a third town who serves the entire county of about 100 000. He's busy as hell and nearing retirement, which is why the two other hospitals are trying to get in on the action.

Anyhow, each of the two hospitals are offering hospital employment with a sick salary guarantee, with RVU bonus, tons of benefits, with the option of transitioning to private practice at some point if I so choose. If I decide to go the PP route, they'll provide me some sort of medical management resources.

I'm a pretty entrepreneurial type of guy with a lot of motivation. I want to start doing allergy tests (no competition in the county), hire an audiologist and sell hearing aids....maybe even a sleep center, or even Botox services. Again, there's little to no competition.

The question really pertains to the current realities of running a solo private practice. I don't know if the income I would make from my work and the ancillary stuff could match what they're offering as an employee which is 350-400K per year. If I'm going to be running all these extra services, employing people and so on, I want it to be worth my time and effort....if it's only for an extra 50k a year then it may not be. What do you guys think? As a solo guy, would it even be feasible to employ a full-time audiologist? Thanks.

If you're an entrepreneurial guy and willing to work hard, the sky's the limit in terms of $$$ you can make in that situation. If you're busy doing a good volume of sinus (especially in-office balloon) as well as busy allergy/audiology/sleep ancillary business, you will kill it and can realistically make double or more of your salary offer.

A new practice will take some time to get started and build up though, even if you have little or no competition. You will have to be aggressive at marketing to and educating your referring docs. If they are not used to having an ENT around, you will need to educate them on what you can do. I.e. they may just medically manage recurrent sinusitis patients forever or never refer septal deviations because they have never had good access to a specialist.

Also, your earnings will depend a lot on the payor mix in the community. Lots of people with private insurance is better. Lots of Medicare and Medicaid is less good.

Obviously, the benefit of starting your own practice is being your own boss and having total control over what you do and how your practice runs. The downside is the uncertainty and potential lean times at first while you are building things up, as well as the absence of support. You will have to work your butt off just figuring out how the business side of things work at first. THIS BOOK is good and helpful for learning the basic nuts and bolts of running a practice.

It may be a good option to start your own practice with hospital support, but make sure you understand what strings are attached to that deal.

The benefit of being an employee is the guaranteed paycheck every month and the side benefits (401k, health insurance, etc). Also, you will probably work fewer hours and have a better lifestyle than running your own practice (which is really a 24/7 commitment). The downside is the loss of control over your practice and bureaucratic BS that you'll have to deal with.

Sounds like you're in a good situation either way. I joined at the beginning of this year with an older partner in a much more competitive market in a bigger city, so it's been more of a slow buildup for me. I think in your situation, you should get busy and start making $$$ pretty quickly.

 

[Pir8DeacDoc]

Consider your own lifestyle choices carefully. If you are someone that likes to take vacation a lot then that's hard to pull off when in solo practice. Who will take care of your surgical complications while you are gone? Your nurses and staff will still need to get paid and the lights will be on, but no one will be there to generate income while you are gone (which underscores the need for hearing aid and allergy services- though a physician has to be there while shots are being given). In my practice I get 6 weeks off per year. That works because I have three other partners. We can take time here and there and the practice never misses a beat. We also have a patient population that is very loyal to our practice, not any one specific provider (i.e. they are happy to see any member of the group).

I was where you are just a year ago and I know there is a lot to think about. I'm just throwing out a few things to consider. Good luck and let me know if I can be of any help

 

[Fah-Q]

Go solo. You have the perfect situation. You will make much more money solo than you ever could as an employee. You will have complete control of your practice and you will have both hospitals bending over backwards to earn your business. Tell them to eff off and build your own surgery center!!! The only downside to not becoming an employee is they could always just recruit someone dumb enough to take their employment offer to compete against you.

Work your ass off for 2-3 years and then recruit a partner. A population of 100,000 will easily support 3 ENT's.

 

[Mark ENT]

Thanks everyone for the great input. I think I'll be employed for a year or two and take advantage of the great up front salary, while developing a reputation, learning how to start a PP and so on. Then when I actually do open up shop, I'll be immediately busy. One potential problem is the payer mix. Like I mentioned, the county as a whole is fairly rural, punctuated by a couple of colleges. I was told that about 50% of the population is privately insured, with the rest being medicare, medicaid, or no insurance. How unfavorable is that percentage??

 

[resxn]

Thanks everyone for the great input. I think I'll be employed for a year or two and take advantage of the great up front salary, while developing a reputation, learning how to start a PP and so on. Then when I actually do open up shop, I'll be immediately busy. One potential problem is the payer mix. Like I mentioned, the county as a whole is fairly rural, punctuated by a couple of colleges. I was told that about 50% of the population is privately insured, with the rest being medicare, medicaid, or no insurance. How unfavorable is that percentage??

It's a short wave for the solo practitioner these days. Remember that in 2015, hospital presidents will control your reimbursement directly, not insurance companies (at least for inpt care). The president will receive a lump sum of money for the thyroidectomy a patient got and divide it up among his staff, the radiologist, the pathologist, the surgeon, the lab, etc. If you're a solo guy in a town where no one else lives, you're fine. If you're competing, remember it's now open free market. If your competition has better rates or more leverage, you may be in trouble. A solo fish in a small pond will still thrive, but lots of solo fish will quickly be whittled away.

Careful of moving from a salaried hospital system to PP. If you're the lone act in town, you'll be fine. But increasingly there is pressure on systems to refer within systems. If you have competition in that system, your referral base may be pressured to refer to your competition. Even worse, if your rates go up, or you don't serve the needs of the hospital as well as they'd like, it would be very easy with their far deeper pockets to bring in a guy into their system on their dime and take all those referrals away day 1.

Think like you own the hospital or the insurance company, not like your a great doc with a good reputation who should receive patient referrals. Medicine is no longer more than a business. Pt's will be sent where the money gets into the tougher and/or smarter hands.

 

[Mark ENT]

Hi guys, I've got a follow-up question for you. I'm going to sign a contract for a hospital-employed position I had mentioned previously, in the next couple of weeks. The draft contract states that the hospital will receive everything that I bill which is fine because I get a nice guaranteed salary plus RVUs. The problem is that I want to do some Botox and filler to make some extra cash. I also want to do some simple things in the O.R. like blephs. What kind of agreement do I have to put into the contract? I don't want the hospital touching the profit from cosmetics....otherwise there's no point in doing any if the hospital is going to get the cash. I'm going to see an attorney next week, but I was wondering what you guys thought. Thanks.

 

[Fah-Q]

Hi guys, I've got a follow-up question for you. I'm going to sign a contract for a hospital-employed position I had mentioned previously, in the next couple of weeks. The draft contract states that the hospital will receive everything that I bill which is fine because I get a nice guaranteed salary plus RVUs. The problem is that I want to do some Botox and filler to make some extra cash. I also want to do some simple things in the O.R. like blephs. What kind of agreement do I have to put into the contract? I don't want the hospital touching the profit from cosmetics....otherwise there's no point in doing any if the hospital is going to get the cash. I'm going to see an attorney next week, but I was wondering what you guys thought. Thanks.

You would probably have to do cosmetics in a separate office and any cash pay procedures in a different OR.

Why would they agree to let you use their office, employees, and supplies to earn money for yourself? You work for them now. You are an employee and your job is to make them money. Anything that does not make them money will not be allowed, pure and simple.

 

[resxn]

You would probably have to do cosmetics in a separate office and any cash pay procedures in a different OR.

Why would they agree to let you use their office, employees, and supplies to earn money for yourself? You work for them now. You are an employee and your job is to make them money. Anything that does not make them money will not be allowed, pure and simple.

Agree with paragraph 2, but disagree with paragraph 1 only if they have a noncompete which would be absolutely ******ed of them not to have. You would have to do cosmetics so far away from your hospital that it will make it financially inefficient and not worth it. If they are dumb enough not to have a noncompete, you may be able to have a separate office with separate staff with separate overhead. Botox and fillers probably will not cover the cost of that, but you'll be free to investigate the option. Make sure your attorney reviews that particular option very very closely if you really plan on doing it.