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What is the best practice setting? It looks like it is becoming employed.

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  • What is the best practice setting? It looks like it is becoming employed.

    There is a strong trend in medicine for becoming employed.  It seems the private practices are becoming extinct - especially solo private practice.  I have worked in many practice environments.  I'm most happy in my current job which is employment in a non-profit healthcare delivery system (AKA hospital network).  I have a flexible and supportive workplace.  I'm paid fairly well with minimal business headaches.  It works well for me.  Do others agree?  Any of you feel that only private practice or academia or nonclinical jobs are the way to go?  I wrote out some pros and cons from my experiences in different environments.  http://wealthydoc.com/blog/types-of-medical-practice-employment-options-where-and-how-should-we-work

  • #2
    I too am an employed physician in a multispecialty group.

    I too am paid well and I have few business-related headaches.

    If they continue to pay me this well and provide me with this level of autonomy, I am happy to stay. The downside is I have very little in the way of tax-protected space ($18K) and no match either.

    If the winds change, I feel my maximum income potential (for my field anyway) would come in the form of a low-overhead, solo cash/boutique/cosmetic private practice.

    On the other hand, if I am able to keep up my savings rate of ~50% of gross income, that may allow me more flexibility to return to academics and give back to my specialty.

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    • #3
      I'm planning on going from employed to self-employed in about 2-3 years. Not all trends are applicable within all specialities.

      I think medicine will become more two-tiered within the next decade: employed physicians that take insurance, and the self-employed physicians that are third-party free and take cash/credit cards only.

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      • #4
        PSA all the way for me!

        I LOVE my set up.. I'm a IC in a group of 6 that has a professional service agreement with the hospital. Only group in town.

        With the PSA all practice expenses are covered by the hospital. Clinic is attached to hospital. Collections don't matter. I get paid strictly on RVUs. Stay busy and I get paid. Minimal headaches. get the tax breaks with 1099 status. Still have complete autonomy with my schedule. I work as little or as much as possible. Have some admin meetings but get paid hourly for those. Have to answer to admin only when docs out of line.



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        • #5
          I'm in academics. Large hospital system. Benefits of a nice IPA. Great benefits and a lot of good tax retitrment benefits. i had no desire to open my own practice and deal with the overhead. Also wanted to be in academics anyway

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          • #6
            I work for a great employer.  39k of tax protected space + 4% match (also a small HSA match) + pension.  However, I have limited flexibility with my schedule and as I get closer and closer to FI, I dislike working full time, especially on weekends.  If I can't find a good part time position I might switch to locums in a few years to take more time off.
            “Work” is a four letter word for good reason.

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            • #7
              I get around $65k tax deferred space thru work (this includes a generous match). I get to make my own schedule/templates.

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              • #8
                Part time IC here. Love my large tax advantaged space and flexibility to work more or less. Works great with having young kids.

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                • #9
                  Although I can't comment on the original question, I'll offer up a related thought. Doctors considering leaving employment to open a practice should carefully consider the pro's and con's before making the leap. While I am (obviously) a strong advocate of autonomy and believe self-employment generally has the greatest prospects for overall growth of wealth, the "headache" potential is fairly directly correlated. Some people have the temperament for owning businesses, others are better suited for being employed - neither is right or wrong.

                  Probably the most common complaint of business ownership is dealing with employee issues. Doctors seem to have an especially deep dislike, although I don't have any stats to back that up, just anecdotal evidence. I've yet to meet a business owner who likes hiring, firing, and discipline. In complicated medical office settings, however, this aversion frequently leads to employee theft.

                  Doctors are trusting and want to believe that office employees are handling everything perfectly so they don't have to be concerned with mundane tasks like billing and collection. They're also busy and overloaded with paperwork and so don't have time to inquire and examine. When the theft is discovered, there is usually no prosecution - too embarrassing. And the employee is let go with lots of experience to work their charms in another office.

                  Most employees are dedicated, honest and trustworthy. But doctors' offices seem to be a magnet for people who know how to work the system. Am I wrong?
                  Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                  • #10
                    Depends on the market. Cash Botox Doc might feel differently about his "best practice setting" if CVS or Walmart start offering it. Solo private practice in a non-competitive market (wider profit margins, don't necessarily need much business acumen) is different from going solo in a competitive market (narrow margins, absolutely need business skills) is different from starting solo in a market dominated by a large healthcare corporation (sounds absolutely miserable). Different Sharpe ratios, so to speak.

                    I have an employed clinical job in a large hospital system that has some features of an academic setting without the traditional "publish or perish" mentality. Salary is competitive for the city, but not for some other parts of the country. 36k tax-deferred space + match is only average in the spectrum between "employed for-profit w2" to "business owner with side gig", but it also means the wife has a dream job with another 36k + match + pension + insane benefits. Love the set up for now, though I could see it changing with a different set of variables.

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                    • #11




                      Although I can’t comment on the original question, I’ll offer up a related thought. Doctors considering leaving employment to open a practice should carefully consider the pro’s and con’s before making the leap. While I am (obviously) a strong advocate of autonomy and believe self-employment generally has the greatest prospects for overall growth of wealth, the “headache” potential is fairly directly correlated. Some people have the temperament for owning businesses, others are better suited for being employed – neither is right or wrong.

                      Probably the most common complaint of business ownership is dealing with employee issues. Doctors seem to have an especially deep dislike, although I don’t have any stats to back that up, just anecdotal evidence. I’ve yet to meet a business owner who likes hiring, firing, and discipline. In complicated medical office settings, however, this aversion frequently leads to employee theft.

                      Doctors are trusting and want to believe that office employees are handling everything perfectly so they don’t have to be concerned with mundane tasks like billing and collection. They’re also busy and overloaded with paperwork and so don’t have time to inquire and examine. When the theft is discovered, there is usually no prosecution – too embarrassing. And the employee is let go with lots of experience to work their charms in another office.

                      Most employees are dedicated, honest and trustworthy. But doctors’ offices seem to be a magnet for people who know how to work the system. Am I wrong?
                      Click to expand...


                      You're not wrong and I think you hit on the main reasons why. As far as best set up goes, that will wildly vary based on specialty, sub specialty, acuity level desired, benefits you personally want, and lifestyle. No single thing is best, just better for yourself and your particulars.

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                      • #12
                        Define "best."

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                        • #13




                          Although I can’t comment on the original question, I’ll offer up a related thought. Doctors considering leaving employment to open a practice should carefully consider the pro’s and con’s before making the leap. While I am (obviously) a strong advocate of autonomy and believe self-employment generally has the greatest prospects for overall growth of wealth, the “headache” potential is fairly directly correlated. Some people have the temperament for owning businesses, others are better suited for being employed – neither is right or wrong.

                          Probably the most common complaint of business ownership is dealing with employee issues. Doctors seem to have an especially deep dislike, although I don’t have any stats to back that up, just anecdotal evidence. I’ve yet to meet a business owner who likes hiring, firing, and discipline. In complicated medical office settings, however, this aversion frequently leads to employee theft.

                          Doctors are trusting and want to believe that office employees are handling everything perfectly so they don’t have to be concerned with mundane tasks like billing and collection. They’re also busy and overloaded with paperwork and so don’t have time to inquire and examine. When the theft is discovered, there is usually no prosecution – too embarrassing. And the employee is let go with lots of experience to work their charms in another office.

                          Most employees are dedicated, honest and trustworthy. But doctors’ offices seem to be a magnet for people who know how to work the system. Am I wrong?
                          Click to expand...


                          You are right Johanna.  I unfortunately know of a lot of cases of theft and embezzlement in medical practices in my area.  Some of them were huge amounts over many years.  Several of them could have been prevented with simple due diligence (more thorough background checks) and separation of duties (separate person collecting, posting, depositing etc).  Basic accounting processes were not in place.

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                          • #14




                            Define “best.”
                            Click to expand...


                            Yes I think that is the key.  Each of us need to decide our own priorities and values and decide what best is.  Is it the love of learning?  Then maybe academia is "best" for you.  Is making the most money the most important factor? Then probably private practice is the way to go.  etc.

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