Private practice vs hospital employed

[Uromamba]

What are the advantages and disadvantages of private practice urologist vs hospital employed: financial, work life balance

[ENT Doc]

Private Practice

Advantages
-Control of personnel, schedule, etc.
-Upside potential of more income
-Opportunity for ownership of and capturing different revenue streams
-Employment fairly well solidified once an owner
-Entrepreneurial zeal can be taken more advantage of
-Opportunity for more tax advantages (cash balance plans, passive income offset with real estate, maxing 401k)

Disadvantages
-Potential interest alignment problems depending on corporate structure, ownership of assets, cost allocation
-Less relative money for marketing investment
-Need to work more to build/maintain practice given lack of referral control
-Downside risk of equity ownership with downturns (and simple fact that income occurs on the margins)
-No initial guarantee of ownership with potential to be taken advantage of
-Need for revenue cycle oversight
-Incentive to not take breaks/vacation because income is on the margin

Hospital

Advantages
-More stable income (also income isn’t earned on the margins after expenses paid)
-More stable referral base
-Hospital deals with marketing and has more relative money to do it based on payment structures we have
-Don’t have to deal with revenue cycle management (pay is typically based on work regardless of collections or payer mix)
-Breaks/vacation affects income less

Disadvantages
-Contracts more frequently with no long term guarantee of employment
-Less income upside
-Expectation of additional roles, possibly not compensated
-Administration can be burdensome and/or have poor decision making with little ability for you to do anything about it
-Incentive alignment with other parties not under your control (staff effort, OR turnover times, Anesthesia efforts towards efficiency)
-Lack of ability to hire/fire

This isn’t comprehensive by any means, but it’s a start.

[Hatton]

Carefully consider ENTDocs pro and con list. Another Pro is the sense of achievement that you created something (if you start the practice).

You will have no control over your schedule or personnel. You can be fired. These are significant negatives.

[ACN]

Pendulum has swung hard to hospital employed positions in the last several years. I'd expect it to start swinging the other way again soon.

Our PP group has started to receive numerous inquiries from fellows/residents about open positions. We've basically started turning everyone away as we don't have room anymore.

Definitely a lot more stress with PP, but if you find a great group, the upside of being your own boss and owning everything with lucrative ancillary income is great.

[Medstud21]

I can comment on employed position as a sub specialty surgeon.

pros:

1) income guarantee which will be between 25th-50th percentile of MGMA. Most places will continue to guarantee 80 percent of your production for the following year after initial guarantee is over.
2) malpractice is covered. Most places will cover tail as well.
3) in house referrals as most hospitals will have a large network of PCPs.
4) easy to get to 50th percentile productivity to get average income
5) don’t have to worry about any admin stuff including hiring/firing/marketing and day to day operations. Show up, work, and leave.
6) wRVU based income, easy to understand and navigate.

Cons:

1) less independence, rely on mid level managers to make decisions on daily basis. Something as little as a new dragon for dictation can take a few days to get approved.
2) generally less income, easy to get to 50 percentile. But difficult to get over 75th percentile.
3) administration is always unhappy about one thing or another, they are always adversarial in some way, whether it be your production, or customer satisfaction, or inability to cover more call.
4) on the same token, you never get answers from administration, they will skirt around, have meetings and more meetings but little gets done. I have a go getter personality, let’s make a decision and LFG.
5) silly restrictions, something as little as shaking hands with independent PCPs in your community can rustle the admin. You’ll realize that administrators are some of the dumbest people.

[DynamicHipScrew]

Pendulum has swung hard to hospital employed positions in the last several years. I'd expect it to start swinging the other way again soon.

Our PP group has started to receive numerous inquiries from fellows/residents about open positions. We've basically started turning everyone away as we don't have room anymore.

Definitely a lot more stress with PP, but if you find a great group, the upside of being your own boss and owning everything with lucrative ancillary income is great.

Interesting take. I've been under the impression that PP is a dying breed. You think it could come back around even with the current administration?

For reference, I'm still a resident so I have experience in neither.

[Hatton]

I can comment on employed position as a sub specialty surgeon.

pros:

1) income guarantee which will be between 25th-50th percentile of MGMA. Most places will continue to guarantee 80 percent of your production for the following year after initial guarantee is over.
2) malpractice is covered. Most places will cover tail as well.
3) in house referrals as most hospitals will have a large network of PCPs.
4) easy to get to 50th percentile productivity to get average income
5) don’t have to worry about any admin stuff including hiring/firing/marketing and day to day operations. Show up, work, and leave.
6) wRVU based income, easy to understand and navigate.

Cons:

1) less independence, rely on mid level managers to make decisions on daily basis. Something as little as a new dragon for dictation can take a few days to get approved.
2) generally less income, easy to get to 50 percentile. But difficult to get over 75th percentile.
3) administration is always unhappy about one thing or another, they are always adversarial in some way, whether it be your production, or customer satisfaction, or inability to cover more call.
4) on the same token, you never get answers from administration, they will skirt around, have meetings and more meetings but little gets done. I have a go getter personality, let’s make a decision and LFG.
5) silly restrictions, something as little as shaking hands with independent PCPs in your community can rustle the admin. You’ll realize that administrators are some of the dumbest people.

The further along you go in your career you will find you really want input into hiring and firing of people who directly work for you. You may not want to do the firing but you want some input. You also will get tired of the lack of control over how your day is structured.
I do not know how you could be ok with an administrator telling you who you could shake hands with (pre-covid).

[ENT Doc]

Forgot to add under pros of hospital employment (much to my chagrin):

-ability to get loan forgiveness

[Sundance]

The further along you go in your career you will find you really want input into hiring and firing of people who directly work for you. You may not want to do the firing but you want some input. You also will get tired of the lack of control over how your day is structured.
I do not know how you could be ok with an administrator telling you who you could shake hands with (pre-covid).

This has become a big thing that I’ve noticed. Administrators will push that they want you to be a “a physician leader”. It’s all nonsense.
there’s a good quote A military podcast I was listening to the states in order to be a leader the people under you have to be accountable to you or you have to have the ability to hold people accountable.

As a hospital employed physician you can’t do any of that. You’re not their boss. They don’t answer to you you. And any interaction with them only put you at risk. Over time that gets super annoying.

[Sundance]

Interesting take. I've been under the impression that PP is a dying breed. You think it could come back around even with the current administration?

For reference, I'm still a resident so I have experience in neither.

Fat pigs get slaughtered.

Eventually physicians will figure this out. Eventually some of the restrictions placed on private practice groups who ease up as the financial stakeholders realize they can save money that way.

Hospital/administrators have been so out of control For so long now, I think it’s only a matter of time at before the pendulum will swing back and that the people (admin) that produce nothing and contribute nothing will finally have what’s coming to them.

At least I hope so.

[afan]

Depends heavily on your field. In some specialties and some locations, corporate is taking over and those private practices that still exist are headed for extinction. If you have made partner, then you might get a good deal when the practice sells. If this happens before you are a partner, your investment in getting there may end up worthless.

If you have not worked for a hospital, you may not realize the extent to which the doctors are not in charge. Even with some physicians in leadership, the decisions get made by administrators who have no idea what they are doing and have no accountability for the consequences.

We had a good co-worker who came from private practice and ended up leaving. Could not stand the number of doctor decisions that were completely out of the hands of any doctor.

A few DAYS to update the transcription system? In our dreams. Try years. With minimal physician input. The input they did got was ignored. Then countless thousands of hours of physician time wasted trying to make an inferior system work.

Some hospital-bases surgeons can still be in the high end of compensation. They do this the same way as in private practice. Build a busy practice. The hospital will pay to keep the beds and ORs filled. Hospital will pay for physician extenders and admin support to make the practice efficient. As long as you keep the hospital in the black on your service, they will treat you well. Plus, a well established surgeon can always pick up and move if they are unhappy. Hospitals pay to avoid seeing their knee replacement service, for example, from decamping across town.

Some no surgeon proceduralists can be in the same position. Or can set up their own outpatient facilities.

[Medstud21]

Depends heavily on your field. In some specialties and some locations, corporate is taking over and those private practices that still exist are headed for extinction. If you have made partner, then you might get a good deal when the practice sells. If this happens before you are a partner, your investment in getting there may end up worthless.

If you have not worked for a hospital, you may not realize the extent to which the doctors are not in charge. Even with some physicians in leadership, the decisions get made by administrators who have no idea what they are doing and have no accountability for the consequences.

We had a good co-worker who came from private practice and ended up leaving. Could not stand the number of doctor decisions that were completely out of the hands of any doctor.

A few DAYS to update the transcription system? In our dreams. Try years. With minimal physician input. The input they did got was ignored. Then countless thousands of hours of physician time wasted trying to make an inferior system work.

Some hospital-bases surgeons can still be in the high end of compensation. They do this the same way as in private practice. Build a busy practice. The hospital will pay to keep the beds and ORs filled. Hospital will pay for physician extenders and admin support to make the practice efficient. As long as you keep the hospital in the black on your service, they will treat you well. Plus, a well established surgeon can always pick up and move if they are unhappy. Hospitals pay to avoid seeing their knee replacement service, for example, from decamping across town.

Some no surgeon proceduralists can be in the same position. Or can set up their own outpatient facilities.

kind of disagree with this. I have seen so many dumb administrators getting in a rift with surgeons to keep them in check, with disastrous results. But they never learn. As soon as they recruit new talent, they repeat the cycle. One of my buddies is an ortho, nicest guy in the world. Just left his employed position along with 3 of his partners because new CEO cut the OR and clinic staff to save cost. When they complained, he doubled down and demanded the same production. They all left and now the hospital is losing millions of dollars. They are paying locums to cover trauma call, no elective surgery.

I have seen this happen repeatedly, they antagonise the existing physicians and push them to leave, only to then lose millions of dollars and running services with locums. And when they are able to recruit again, cycle restarts. Just in my system currently, we have no neurologists, or endocrinologist, while our competitor has no trouble hiring them. They keep bringing it up in meetings and I said, how about paying more? CMO literally said we can’t do that and we have to keep the salaries where they are to sustain the system. Ok good luck then.

[Tim]

Pendulum has swung hard to hospital employed positions in the last several years. I'd expect it to start swinging the other way again soon.

Our PP group has started to receive numerous inquiries from fellows/residents about open positions. We've basically started turning everyone away as we don't have room anymore.

Definitely a lot more stress with PP, but if you find a great group, the upside of being your own boss and owning everything with lucrative ancillary income is great.

PP: Depending upon the size or the group, the more you need to learn to run a business. Everything business decision is made by the practice. As with most relationships, the relationship can deteriorate. Keeping business relationships health takes work by the partners. There is an additional layer of work besides practicing medicine. The structure of the partnership and governance is a challenge.

[EastBayHand]

I agree 100% PP is not going away any time soon, probably not ever. Pendulum may already be swinging back. The benefits are NUMEROUS and the cons are not guaranteed. For example, the list put up is a great one. But the "cons" of Employed is "hard to get above 75% MGMA.... deal with administration... etc". Those are 100% guaranteed. Yet, the cons of PP are "more stress, need to work more, etc" but those are not necessarily true. Many (most?) private practices have great set-ups with admin/staff who manage the mundane tasks and when you control your overhead, you don't need to work more to make more money. Further, the pros of PP are often modestly stated as "upside potential of more income" which makes it sound like we're talking about 20-30% higher. However, in many cases we are talking about 2x-5x more income when you account for ancillary opportunities, real estate, retirement account options, etc. These are asymmetric risks.

I think the loud voices who advocate for PP (mine, and many others) will continue to be heard by new residency/fellowship grads and disenchanted employed docs. If you're willing to take what FEELS like a little risk, the rewards are well worth it.

[Notsobad]

Pendulum has swung hard to hospital employed positions in the last several years. I'd expect it to start swinging the other way again soon.

Our PP group has started to receive numerous inquiries from fellows/residents about open positions. We've basically started turning everyone away as we don't have room anymore.
.

I am not so sure it is not still swinging the hospitals way. In many markets they are control more of the referral stream through their primary care network. We are still having a tough time recruiting.

on the other hand, payers are starting to wise up to the cost difference, so I hope you are right.