I've been given the offer to take over someone's practice, and I will be working in private practice, (though it is not my own) in a few weeks. My father owned a private practice and I worked in it for a few years. His practice went down the tubes in profitability with the healthcare changes of the late 80s, but he keeps it running today even though it's losing money. (Insurance didn't want to pay specialists who saw patients as their PCP). My uncle also owned a private practice that he folded because the state offered retirement benefits that could not match what he made in private practice.
Owning a private practice is for all intents and purposes, owning a small business. It's not like you can just rent an office and do psychiatry. You have to have some knowledge on running an office, hiring and firing employees, the legal requirements, and be committed because these are YOUR patients.
In usual hospital practice, once you're done with your patients, you discharge them and the social worker and several other staff members handle most of the odds of ends. Unless you hired someone to do it, you have to handle the odds and ends.
Just to give one example, someone I know (who is not African-American) had a private practice and he fired his secretary (who was African-American). He had his daughter work as his secretary until he could find a new one. In the meantime, the secretary found out about this, but didn't know the fill-in secretary was his daughter. She sued the doctor claiming racism.
OKay, now what if you were a resident and this happened to you? How the heck are you going to handle this lawsuit while you have residency obligations!?!?! Get my point? The above is just one example.
Another example, what if you don't get the snow on your sidewalk by your office shoveled, or even if you did, some schmuck slips and falls and now he's suing you. Again, do you want this headache as a resident? How the heck will you be preparing your grand rounds while having to juggle with issues like this? Okay, so you pay someone do to the sidewalk for you. Great, next day the guy doesn't show up to do the sidewalk till 5 pm. The schmuck slipped and fell at 4pm.
Lawsuits aside, there's still plenty of issues people have to be prepared for that medschool or residency does not teach you. What are you going to do if your patient cannot pay? Deny services? Will you be violating the law in doing so? What if the patient promises to pay you later? Then it's 1 year later and you still haven't got the money. These things happen in a private practice.
I have not owned a private practice, but I have owned and run a few small businesses. You just can't walk into this as if it's going to be a money-making dream. I think most residents wanting to do their own private-practice are walking into a situation that's over their heads, and by the time they've figured that out, they probably wouldn't have even made much money, but are now legally committed to providing the patient services the resident had no idea or intention of providing.
I'm going to bring it up again. I've been watching Ramsey's Kitchen Nightmares and have seen almost every episode of the BBC version. What Ramsay brings up is very true of small businesses. I could imagine most residents starting a private practice (which I do not even believe is legal) becoming the unfortunate person in one of those episodes.
Here's an example of one episode (part 5 of 5)
You can however, just get to the point I'm trying to make by going here, start at 5:10...
http://www.youtube.com/watch?v=lbIyJlLi7YU&feature=related
Here's another episode where the owner knew how to serve great food, but didn't know what she was getting into.
http://www.youtube.com/watch?v=G5dfm3bWxsc
Despite the happy ending, I read up on her. Later on, she lost everything. Ramsay saved her, taught here where she was messing up, she fixed it, she then did well, but then she expanded the business after the episode, and didn't know how to handle it.
Would I recommend a private practice? Yes, if you know what you are getting into, want to run a small business, and have a plan on dealing with billing, the legal requirements, running an office, etc. I do not, however, know how the upcoming healthcare bill changes will change private practices.
The reality of the situation is, as an attending, even if you don't have good business skills, you will likely profit enough to keep things afloat because with a 6 figure income, you can waste $50K because you don't know WTF you are doing. E.g. you can overpay the secretary because you will still be in the black. You can afford patients who can't pay here and there, but it'll have to come out of your pay. But if you actually knew what you were doing, you'd be $50K ahead and a lot happier. That's what happened to my father. Because he didn't know how to run an office, while he made money, he wasted about $100K a year, and his employees walked all over him. Even after his business was not making money, he kept his secretaries for years because they didn't have retirement and had no where else they could work. He allowed that to drain his money for years.
As a resident? Forget about it. You could only likely devote 10-20 hrs a week before the practice drove you nuts anyway assuming your program is only working you 40 hrs a week. I hate sounding harsh, but I wouldn't let a resident of mine do this if I were a PD, out of concern for them, not because I was trying to rule with an iron hand. If a resident of mine had a private practice, and there was a lawsuit against them from their private practice, I would be taking several steps to build a wall showing there should be no legal connection between the resident and the program, and I would strongly consider kicking the resident out for starting a practice over the program's head even if the resident wasn't already kicked out in the "building a wall" phase.
And let's just say that resident did start a practice and everything at the practice was going well. If the resident couldn't perform his resident duties because of the private practice, then the private practice has to fold, or the resident is out.
