,The last several years have been a period of consolidation in healthcare. Many small, independently owned medical practices have been purchased by hospitals, health systems and private equity shops. This trend has caused many physicians to wonder: is private practice still a viable model?
The answer is yes. However, there are a few key considerations to take into account before making the entrepreneurial leap.
Is your specialty a good fit for private practice?
Specialties positioned for success in private practice have diversified revenue streams. This includes all cash or a combination of cash and insurance-based services, a variety of office visit and procedure-driven revenue, manageable overhead costs and marketability.
Do you have a structure in place to contain costs?
One of the advantages you have as a small business is agility. You have a blank slate to design workflows that use technology to improve efficiency and reduce cost, allowing you to maximize your profitability. However, as a small practice you typically won’t receive the same reimbursement rates as a large, established group. A well thought out business plan is mission critical to establishing a successful private practice. This is a great place for you to invest in a consultant to make sure you’ve crossed your t’s and dotted your i’s.
What is your definition of success?
The single largest driver for most physician entrepreneurs is to be able to practice medicine on their own terms. This means dictating your schedule, what services you offer, how many patients you see, what technology you incorporate, etc. It’s possible to do this and make a lot of money in the process, but it can take a new practice the better part of a year (or longer ) to ramp up. In other words, if you won’t be satisfied with earning less than you do in your employed position for the first year (or more), you should reconsider private practice.
What’s the “political” climate in your proposed location?
It is important to consider the competitive landscape and some cities/towns/metro areas are more friendly to private practice than others. Is there a large health system that owns controls the healthcare market in your area? Do they offer competing services, or could they be a potential referral source? Are there IPAs or other organizations that can help your practice?
Are you are considering whether private practice is the right fit for you? Reach out to schedule a consultation call. There’s a lot to consider and sometimes it helps to have a sounding board. If you decide to take the plunge into physician entrepreneurship there is a lot we can do to help lay the groundwork for a successful practice.