Do i say anything?

[bonehead]

what do you think the reason is?

For those starting own practices - student loan debt, saturation of markets in many specialties, declining insurance and medicare reimbursements without advantage of SOS differentials that hospitals have, minimal experience in business management. In established group practices - predatory practices who abuse new hires, have questionable ethics otherwise, or are mismanaged - parts that aren't fully known until after working within the practice for some time.

15 years ago, many procedures I currently perform were reimbursed at a substantially higher rate. To run a practice with the same procedures now can afford very little practice business management mistakes and overhead.

[Tim]

I do not want to argue but the upside is only limited by how much you want to work when you own the practice. Any employee can be fired or have benefits cut. Personally the best part of ownership is being able to decide your own work schedule.

Time is a finite resource and the productivity is limited. Hard work is not the only factor. Working smarter vs harder has a ton of validity.
Hatton
You ran a very efficient practice business wise, self taught. Some specialties actually flounder outside of a hospital organization.
Compensation, job, location. Two out of three in PP, job and location. Owner you control the last two, the comp happens and has limitations.
My point is that if it was so easy, solo practice would dominate the healthcare profession. Successful PP can be really hard.

[Hatton]

Time is a finite resource and the productivity is limited. Hard work is not the only factor. Working smarter vs harder has a ton of validity.
Hatton
You ran a very efficient practice business wise, self taught. Some specialties actually flounder outside of a hospital organization.
Compensation, job, location. Two out of three in PP, job and location. Owner you control the last two, the comp happens and has limitations.
My point is that if it was so easy, solo practice would dominate the healthcare profession. Successful PP can be really hard.

I did not say it was easy.

[Otodoc]

What people dont like are the terms and costs of said partnerships. Theres zero reason why someone wouldnt want a partnership if the terms were reasonable.

What people dont want is 3-5 years of sub average pay and crappy call, just to pay an insane premium of "goodwill" to an aging partner looking for a golden parachute, which is far too common.

Many of these practices end up shuttered as they cant be sold at what the ego of the retiring doc wants, and its frankly cheaper for some to start their own places. Goodwill, and pt panels just arent things anymore, and really werent ever as valuable as projected, and it doesnt work anymore.

This is the only real disconnect.

Change the terms and you'll have takers.

what zaphod said is the correct observation.

[Lordosis]

As a private practice Family physician there is no way I would be able to make my salary with my work alone. I would also have to make money off of other hired physicians or midlevels. The argument is that the hospital would not pay me more then I bring in with my billing. Except they would because we make the system a lot more money though labs/ studies/ and referrals then we do directly with our billing.

[jacoavlu]

goodwill can still be a thing.

Come to my town and try to start a radiology practice. Or anesthesia. Or ED. Or cardiology. Exclusive contracts all around. Established practices. Steady work. Good hospital relationships. Good payer mix in the community.

All those things have value and that’s what you’re buying or earning into.

[dayman]

goodwill can still be a thing.

Come to my town and try to start a radiology practice. Or anesthesia. Or ED. Or cardiology. Exclusive contracts all around. Established practices. Steady work. Good hospital relationships. Good payer mix in the community.

All those things have value and that’s what you’re buying or earning into.

Not arguing whether or not goodwill is "fair". I'm sure you're right that it'd be hard to start a radiology practice in your town. But it would not be hard to join a radiology practice in a different town with a group that doesn't make you pay goodwill.

Ultimately the big buy-in with goodwill just makes a group less competitive for recruits, unless there are other factors at play like excellent location, great pay with a normal workload, etc.

[jacoavlu]

Not arguing whether or not goodwill is "fair". I'm sure you're right that it'd be hard to start a radiology practice in your town. But it would not be hard to join a radiology practice in a different town with a group that doesn't make you pay goodwill.

Ultimately the big buy-in with goodwill just makes a group less competitive for recruits, unless there are other factors at play like excellent location, great pay with a normal workload, etc.

note I didn’t say anything about a big buy in. True value of goodwill would come more into play if someone wanted to buy our practice.

and a buy in in and of itself not really to be afraid of. People talk like the money just goes to other owners and it’s gone.

But a buy in results in basis in your corp stock or partnership interest which eventually comes back out of the business tax free in the case of retirement or if some year you take distributions in excess of business income

[TheDangerZone]

Employers cut benefits too. I know lots of people whose 401k matches got suspended this year. They can only put $19.5k in their plans, while I can put $57k in mine. And "bonuses" could be reframed as earnings on your part for which payment on your employer's part is discretionary. Sounds like a crummy deal to me.

I put 14.25k and my employer puts in 42.75k. Seems like a pretty good deal to me..

[Dont_know_mind]

Again, I don't dispute your experience. My experience is that I've done "OK" as a regular employee with minimal hassle. I think there is a reason physicians are moving toward being employees and away from private practice.

Probably the expected return in a lot of areas is lower than say 20 years ago.
You can do very well either way as you say. Many roads to Dublin.
It also depends on your personal preference and what you feel comfortable with.

[Dont_know_mind]

Interesting - can you expand on that?

I don't know about other areas but in mine (psychiatry) there has been an uptick in telehealth work, covid related anxiety, and possibly more work related adjustment disorder/ptsd/work injury medicolegal in the future. There may be some early 60's practitioners who retire early due to the pandemic. I'm not interested in picking up more work at this point in my life but if I was 10 years younger, I probably would.

In other areas where there is a bigger PE/hospital contract effect, medicare for all, if it occurs, could be a game-changer. Even the current pandemic induced changes have been pretty significant. In my field anyway, the early solo PP is ideally suited to start and adapt in this environment. Next after this the small group. In many ways, the small group is more consistent with patient demands for availability nowadays. But any group, can't move as fast as an individual.

No one will tell you explicitly where their excess returns are, because competition tends to erode this. You can get an indirect view of other people's business model and how busy they are by just talking to them.

[afan]

Many of these practices end up shuttered as they cant be sold at what the ego of the retiring doc wants, and its frankly cheaper for some to start their own places. Goodwill, and pt panels just arent things anymore, and really werent ever as valuable as projected, and it doesnt work anymore.

This is the only real disconnect.

Change the terms and you'll have takers.

Apparently, my friend's group is one of the very few independent practices left in their area. Almost everyone else has been bought out. Friend has lots of offers to sell but doesn't want to stop practicing and cannot imagine shifting to being someone's employee. Hopes to stay on their own as long as possible, then retire. The sales proposals always include staying on as an employee for a few years.

[Zaphod]

Apparently, my friend's group is one of the very few independent practices left in their area. Almost everyone else has been bought out. Friend has lots of offers to sell but doesn't want to stop practicing and cannot imagine shifting to being someone's employee. Hopes to stay on their own as long as possible, then retire. The sales proposals always include staying on as an employee for a few years.

I wouldnt want to be anyones employee either, I'd want to sell and be out or transition that way. Selling to a hospital or PE firm unless getting a great premium and short stay on period isnt very desirable for many.

Thats why it would be nice to have had a partner earlier with clear terms that allowed you to transition out according to your own plan.

Being one of the last likely makes anything other than being bought out extremely unlikely.