Single Older Female DO: How To Start Niche Private Practice Fresh Out of Residency?

[Sereia]

WIC newbie here. I'm in my last year of ONMM residency (Osteopathic Neuromuscular and Manipulative Medicine) and in need of some financial guidance. I am admittedly late to the financial game and have been learning so much after discovering WCI, but still overwhelmed because my career goals and opportunities are not as 'traditional' as other specialties. BACKGROUND: I am an older (39) single woman, no kids. I will move back to coastal CA to be closer to my aging parents and to have my one non-negotiable self care indulgence (surfing). For work/life balance and to extend the length of my working career (since OMM can be very physically taxing on the body), I plan to work both 1) part time starting my own private practice, which will take time to build (3-8 yrs seems to be the range) and hopefully as a 2) part time adjunct professor at an osteopathic medical school (which will require a 3 hr commute). I do both love clinical and academic work, LOVE my field, and want to share it with as many patients, students, and colleagues as possible.

FINANCES:
* No debt besides $303,000 in Student Loans. I am currently in REPAYE (though deferred due to federal action), however I do not think I will qualify for PSLF as a professor because the medical schools are for-profit organizations.
* $19,000 in Savings
* $90,000 in Total Investments: $8,000 in an old employer's 403b, $39,000 in a Rollover IRA, $10,000 and $32,000 in two different Roth IRAs.

Being a first generation child of single parent/labor immigrants, I am already very frugal and risk/debt averse, but slowly trying to let go of this fearful 'survivalist' mentality and make smarter financial decisions, though they still seem very uncomfortable given my cultural background. I have no problem 'living like a resident' for the rest of my life, though I know this may change if I have a family one day. My amazing mother has graciously saved $183,000 for me to use (independent of her retirement funds), but neither of us are financially saavy to know the best way to allocate it given the uncertainty of my first couple years post residency and the likelihood that my earnings potential will not substantially increase throughout my working lifetime (academia doesn't pay great and my practice can't scale the same way other specialities can). Since I'm older, I also don't have as many working years left, though I hope to work until I die as long as I'm enjoying it. I look forward to a simple life, with 'mini-retirements' along the way.

QUESTIONS: Put most/all to paying off my loans and how much? Save some for a rainy day and how much? Invest some/all of it? If so, in what? Would buying a mixed-use property be a good idea to double for saving on rent to live and as well as rent for an office space, especially since I plan to be there for at least the next 5+ years? (Unlike most doctors' practices, a DO practicing OMM can only see 1 patient at a time and needs nothing besides an OMM table and computer, so my overhead costs are minimal and I can only scale by seeing more patients one at a time). There is one mixed use property I am looking at that would cost ~$600K (including some necessary renovations), but has 2 separate units. Or just use it as seed money to live while I build my practice and just rent separate living and office spaces? Also, if I don't get benefits as part time adjunct professor, what healthcare options do I have and how should I be factoring this into my budgeting?

The area I am moving back to has alot of potential demand, but not alot of awareness of service, so I would need to do a fair bit of community outreach and marketing. I do have a small network there with a couple doctors and wellness professionals excited to refer me to patients. It seems my field is mostly a patient referral/word of mouth thing because 1) not alot of medical and wellness professionals know about it in CA and 2) few DOs can afford to take insurance given how poorly it is reimbursed.

I am already maxing out my Roth IRA, but besides this I am pretty much living paycheck to paycheck. I do have some time during residency but have had difficulty finding any side gig work since I am only board eligible, not certified yet and my specialty isn't recognized in alot of side gig opportunities (moonlighting for urgent care, even online surveys!). I'm not sure what else to be doing now to maximize my financial situation. Is there any reason to transfer the 403b into the rollover IRA? Any other suggestions/advice? THANK YOU so much in advance for taking the time to read and respond!

[jfoxcpacfp]

I think we might able to be more helpful if we had some clarity about your projected income from academia and the (realistic) estimated income trajectory for your practice. This year could be an ideal opportunity for Roth conversions, but maybe not, given that it appears you expect relatively low income throughout your career.

Good luck - I admire your tenacity and determination. And welcome to the forum!

[Sereia]

Thank you so much for the response and support! I am still trying to get an accurate estimate, but here are my rough calculations (still waiting to hear back from people in the field who know much more):

Academia
FT professor ~$195,000 + benefits (would require weekly 6 hour commute, but would have some time to slowly build my private practice)
PT adjunct professor ~$100/hr, unsure what benefits, if any. Not sure how many hours I could secure.

Private practice
Working out of colleague's office with her referrals:
15 patient care hours ~$7,000

I'm still working on my business plan to figure out an appropriate rate given the demographics (retirement, college, and laborers) and rural/suburban area. There are only a few DOs that practice OMM in the area. They are in different situations because they are boarded in other specialties (FM, OB) and use their other income to support their OMM practice.

I recognize I will be fresh out of residency, but I'm also specialized in this area. I do know that in urban CA areas, physicians who specialize in OMM in private practice charge upwards of $300-400+ for initial visits, slightly less for follow-up, and still have year long waiting lists (at least the established good ones). Most of the ones I know inherited a practice so couldn't comment on how many years it took.

Back of the envelope calculation:
Average rate $250/visit x 5 patients/day x 3 days/week x 44 weeks/year = $165,000
Office rental in a shared space (utilities included) $350 - 450/month x 12 months = $4,200 - 5400
I still need to figure out how much other business costs like malpractice, etc. are but from Pamela Wible's Ideal Medical Care, bare bones can be done for $3,000 (https://www.idealmedicalcare.org/ope...did-heres-how/)

Obviously it would take time to build to this. I think initially it would be slow, but once patients start seeing results, I have confidence from my residency experience that things could scale up fairly fast, hopefully within a year.

I know the easy answer would just be to take the academic job, but they lack clinical opportunities and I want to continue to maintain and improve my skills as well as help people now that I've seen how potent OMM can be in so many conditions. I also really don't want to live FT at any of the medical schools because they are all 2-3+ hrs from the beach.

Anyway, thanks again for any help/support! I feel so blessed to have found this space

[VagabondMD]

I do not recall reading a post here by anyone from that background (ONMM) and had to look up what it is. Most of the physician forum members are in traditional medical fields, either group private practice, hospital-employed or academic.

To me, the numbers look quite alarming. You will graduate from training at age 40 with $300k in debt and the intention to start your own practice in a field that most people do not know anything about. You will live on the California coast (VHCOL), and pay rock bottom rent for space with negligible operating expenses, working 5 hours/day treating cash only patients, 3 days per week. I think that there are some very optimistic assumptions in your plan and little margin for error if things do not break your way.

Normally, I would recommend using your mother’s cash to pay down your student loan, but given some of the uncertainty I have with the overall plan, it might be wise to keep some additional cash on hand in case your business does not ramp as you expect. As for the real estate, I might wait until the practice stabilizes before committing to a property investment.

[CordMcNally]

I don't know anything about ONMM but I do not it's incredibly uncommon for anyone to build a successful business on a part-time basis.

[AR]

I don't know anything about ONMM but I do not it's incredibly uncommon for anyone to build a successful business on a part-time basis.

I don't disagree with this, but just because the business is open part of the time, that doesn't mean that work on the business isn't being done. One my friends (who is incredibly business savvy) started like this. His office was closed 4-5 days a month so that he could go to a city 3 hrs away and bang out a bunch of surgeries to supplement his income. He wasn't busy enough that he was really losing patients from his office closures. And plenty of nights and weekends were spent on practice management. The practice was ultimately (and continues to be) incredibly successful and it was started from scratch.

[CordMcNally]

I don't disagree with this, but just because the business is open part of the time, that doesn't mean that work on the business isn't being done. One my friends (who is incredibly business savvy) started like this. His office was closed 4-5 days a month so that he could go to a city 3 hrs away and bang out a bunch of surgeries to supplement his income. He wasn't busy enough that he was really losing patients from his office closures. And plenty of nights and weekends were spent on practice management. The practice was ultimately (and continues to be) incredibly successful and it was started from scratch.

By part-time basis I wasn’t talking about the actual hours. I was talking about the work behind the scenes. It’s likely going to be much more work than she thinks and will teeter on a single referrer.

[MPMD]

I do not recall reading a post here by anyone from that background (ONMM) and had to look up what it is. Most of the physician forum members are in traditional medical fields, either group private practice, hospital-employed or academic.

To me, the numbers look quite alarming. You will graduate from training at age 40 with $300k in debt and the intention to start your own practice in a field that most people do not know anything about. You will live on the California coast (VHCOL), and pay rock bottom rent for space with negligible operating expenses, working 5 hours/day treating cash only patients, 3 days per week. I think that there are some very optimistic assumptions in your plan and little margin for error if things do not break your way.

Normally, I would recommend using your mother’s cash to pay down your student loan, but given some of the uncertainty I have with the overall plan, it might be wise to keep some additional cash on hand in case your business does not ramp as you expect. As for the real estate, I might wait until the practice stabilizes before committing to a property investment.

i am in complete agreement.

OP is deeply in debt despite claiming to be risk averse.

moving to a VHCOLA partly to indulge a hobby?

3-8 years of what OP describes as physically demanding work to establish a practice?

a 3 hour commute for a non-PSLF "academic" job?

does OP even know what docs in their field make? it sounds like they only have very rough estimates of a very idiosyncratic field?

i'm a bit unclear what the actual plan is here. this sounds a lot like chiropractic and my sense is that chiros who make a lot of money do a bunch of other stuff (PT, massage therapy, med spa stuff) not just see one pt at a time.

sorry to be harsh but this sounds like a disaster waiting to happen. OP you cannot commute 3 hours one way to indulge teaching desire while you need to build a PP. if nothing else your travel expenses are going to be astronomical.

i'm sorry i don't see much of anything good here, i think your plan needs a major reality check.

[Lordosis]

I agree with the hesitancy above. You can probably get to this ideal practice but not from where you're starting. You are estimating a very optimistic pay structure and very low overhead cost. You will likely have very slow referrals to start and if you are lucky May build that over time. It might take several years to generate a profit. My suggestion would be stirred in a traditional position and save until you can take the hit.

My prediction is you will likely enjoy or at least tolerate the traditional approach and not ever want to take the hit.

[Brains428]

Wouldn't it have been better to have done FM then the 1 year ONMM fellowship?

I'd honestly just take the faculty position FT and live where that school is (I don't know anything about Pomona or Clovis, though... unless there is a new DO school in CA, which is possible). Maybe you could also look into working in an office with physiatrists, sports med docs, or any other subspecialists who may streamline a patient base your direction.

I went nearly the complete opposite direction of you (DO radiologist), but I do see the value of OMT to a variety of conditions and patients. I ultimately think you need to pick between going all in in building a practice, or commit to academia.

[AR]

I'm not loving the plan either, but the biggest benefit here is that you're single. You can take a lot more risk if you don't have a family and multiple kids to worry about. You can also really tighten the belt if needed. So if this is some sort of dream, give it a shot. If it doesn't work just get a real job and/or move. There have to be other places you can surf.

[Hank]

Can you drive three hours from a full time academic job to surf on the weekends?

[White.Beard.Doc]

I think the success of your plan is possible, but uncertain until you give it a try.

Until you have been working on building your practice for a while, it will be hard to know where things are headed. In your shoes, I would start by subletting office space from another physician to keep overhead as low as possible. That can work when you have a part time practice.

I would only consider buying a building down the road, once the practice income potential becomes clear. And maybe begin with a higher salary from the teaching position and then ratchet that down stepwise as the private practice builds patients.

I had a full time academic job and a side gig. As the side gig grew, I reduced my academic hours to part time, and eventually gave up the academic job as my outside activities generated far more income than the academic physician position at the big university hospital.

Best wishes to you. Your plan could potentially work, but I might take a guaranteed income and plan to build the practice on the side. One question, how many days per week would you have to do the very long commute? That commute would be too much for me to tolerate for very long.

[Hatton]

I started my own practice but I had worked for 4 years in a private practice. I had patients at this point. One thing to keep in mind is that the lower you can keep your overhead the more money you will keep. I might take the academic job for a few years to pay down debt and build some savings. In this time period you hopefully can acquire the skills you need to run a business if you read this site and others. No way could I handle the commute you mention.

[MWPT]

I am a manual physical therapist and have trained with DOs who practice manual medicine. Have you looked into the VA or Indian Health Service? The ones I have met have practiced in those settings. Perhaps there are debt reduction prospects there as well. Good luck!