If a family doctor starts their own private practice, how much money will the doc make per year?

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justsomething

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AFTER taxes and AFTER malpractice insurance and AFTER practice expenses. Basically, how much money would the family doc that owns the practice take home?
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Good question, i would also like to ask about location. I prefer to start in a small town. Is a small town with less than 10-15k people considered rural if there are no large cities nearby?
 
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Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
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The answer to this question is very complex since it depends on many factors such as location, the payor mix, how much will you be working and how many patients you'll be seeing, and most importantly how good you are in running a business.

That's being said, I read in the FM forum that Medicare reimburses ~$74 for a routine follow up visit, Medicaid pays much lower (around $45 in some states) and private insurance pays higher ($100+). I also read that if you see an average of 22-25 pts/day, you will need at least 3 employees. One for the front desk, one for charting and taking vitals, and one for billing.
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
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That is ridiculous. In general, patients don't question what of physician you are.
 
Ibn Alnafis MD said:
The answer to this question is very complex since it depends on many factors such as location, the payor mix, how much will you be working and how many patients you'll be seeing, and most importantly how good you are in running a business.

That's being said, I read in the FM forum that Medicare reimburses ~$74 for a routine follow up visit, Medicaid pays much lower (around $45 in some states) and private insurance pays higher ($100+). I also read that if you see an average of 22-25 pts/day, you will need at least 3 employees. One for the front desk, one for charting and taking vitals, and one for billing.
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Soo.. let me get this straight. If I were a family doc and saw 20 patients in a day, and only took private insurance, I would get $100 per patient. THat would be 100*20=$2,000 per day. *5= $10,000 per WEEk. *4 weeks= $40,000 PER MONTH.

Let's say I hire a receptionist and pay her $2,000 a month (about $12/hour). Let's say I hire two medical assistants, and pay them $40,000 per year each. That is a total of $104,000 per year on employees. If I were to make $40,000/month from the private insurance seeing 20 patients in a day, I would net $480,000 per year. Then, I would subtract $104,000 per year for my workers.

And let's say I don't rent the space, I own it.

So I would make $376,000 per year? Sounds a bit too good to be true. Something must be missing, right? I mean, a family doc usually makes 200k a year, not 376.
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
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Most doctors will have the specialty under their name such as:

Dr. Jane Smith,DO
Family Medicine

Pretty sure that patients would know that Jane Smith is a Family Medicine doctor
 
Ibn Alnafis MD said:
The answer to this question is very complex since it depends on many factors such as location, the payor mix, how much will you be working and how many patients you'll be seeing, and most importantly how good you are in running a business.

That's being said, I read in the FM forum that Medicare reimburses ~$74 for a routine follow up visit, Medicaid pays much lower (around $45 in some states) and private insurance pays higher ($100+). I also read that if you see an average of 22-25 pts/day, you will need at least 3 employees. One for the front desk, one for charting and taking vitals, and one for billing.
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25 patients per day times 60 dollars average for each patient times 260 working days per year = $390,000. It would seem hard to stretch 190,000 to cover all other expenses. This assumes five day work weeks and no vacation.
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
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I think you misunderstand your clientele.. Most people don't know/don't care what kind of degree you have as long as you have the credentials to practice medicine and are willing to take them as a patient. Don't assume that everyone has spent half their lives researching medicine as a career or even knows how medical education works. When people ask me where I'm starting med school they sometimes follow up with, "what specialty is that school for?"..

It doesn't necessarily make them ignorant, the vast majority simply don't care. How many times have you seen Jane Smith, M.D. F.A.C.P, F.A.C.O.G, ETC and simply not cared what all the damn letters mean? (I know what they are now 😀)
 
Sorry I didn't mean to offend, was just trying to be realistic. You're right most patients don't care, but imagine you weren't a premed, and you never heard of a DO before.
 
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justsomething said:
Soo.. let me get this straight. If I were a family doc and saw 20 patients in a day, and only took private insurance, I would get $100 per patient. THat would be 100*20=$2,000 per day. *5= $10,000 per WEEk. *4 weeks= $40,000 PER MONTH.

Let's say I hire a receptionist and pay her $2,000 a month (about $12/hour). Let's say I hire two medical assistants, and pay them $40,000 per year each. That is a total of $104,000 per year on employees. If I were to make $40,000/month from the private insurance seeing 20 patients in a day, I would net $480,000 per year. Then, I would subtract $104,000 per year for my workers.

And let's say I don't rent the space, I own it.

So I would make $376,000 per year? Sounds a bit too good to be true. Something must be missing, right? I mean, a family doc usually makes 200k a year, not 376.
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You forgot to add in the malpractice insurance (~15K/year), payroll taxes, utility bills, and equipment costs. Besides, it's highly unlikely that you'll only see privately insured patients. If you are a business savvy, you probably could pull 250K/year working 48 weeks as an FM doc.
 
This question is Almost impossible to answer. How many patients will you see a day. Are you making rounds at a hospital, how are you getting new patients, how are you paying off your student loans, how are you starting a practice on your own (almost nobody can), what procedures will you be doing, how much is malpractice insurance, how many days a week are you working, what kind of insurance do you take, etc etc etc.

With that in mind I would say anywhere from $1-$1,000,000
 
stlrams22 said:
25 patients per day times 60 dollars average for each patient times 260 working days per year = $390,000. It would seem hard to stretch 190,000 to cover all other expenses. This assumes five day work weeks and no vacation.
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$60 per visit is on the low end, unless you are working in an area that is heavily populated by people insured by Medicaid.
 
stlrams22 said:
25 patients per day times 60 dollars average for each patient times 260 working days per year = $390,000. It would seem hard to stretch 190,000 to cover all other expenses. This assumes five day work weeks and no vacation.
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You also have to take into account paying for nurses, insurance, and rent for your practice. It's incredibly unrealistic to start a practice on your own. You would work way too much, and not make enough money. I can't even imagine how often you would need to be on call. Best thing you can do is take a job making 150-200k and hope to become a partner within 5 years
 
Ibn Alnafis MD said:
$60 per visit is on the low end, unless you are working in an area that is heavily populated by people insured by Medicaid.
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Good point, I'm always a little conservative with my estimates. I also considered the expansion of Medicaid because of obamacare. My guess is that reimbursement rates will decrease on average as more people go to Medicaid.
 
stlrams22 said:
Good point, I'm always a little conservative with my estimates. I also considered the expansion of Medicaid because of obamacare. My guess is that reimbursement rates will decrease on average as more people go to Medicaid.
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From what I read, the ACA (obamacare) requires states to increase Medicaid reimbursement rates to match Medicare.
 
Ibn Alnafis MD said:
From what I read, the ACA (obamacare) requires states to increase Medicaid reimbursement rates to match Medicare.
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increase in medicaid reimbursements by 74% as part of the law, if I'm not mistaken
 
justsomething said:
Soo.. let me get this straight. If I were a family doc and saw 20 patients in a day, and only took private insurance, I would get $100 per patient. THat would be 100*20=$2,000 per day. *5= $10,000 per WEEk. *4 weeks= $40,000 PER MONTH.

Let's say I hire a receptionist and pay her $2,000 a month (about $12/hour). Let's say I hire two medical assistants, and pay them $40,000 per year each. That is a total of $104,000 per year on employees. If I were to make $40,000/month from the private insurance seeing 20 patients in a day, I would net $480,000 per year. Then, I would subtract $104,000 per year for my workers.

And let's say I don't rent the space, I own it.

So I would make $376,000 per year? Sounds a bit too good to be true. Something must be missing, right? I mean, a family doc usually makes 200k a year, not 376.
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Gotta take breaks sometime.... minus taxes, etc.
 
Chillywilly said:
Sorry I didn't mean to offend, was just trying to be realistic. You're right most patients don't care, but imagine you weren't a premed, and you never heard of a DO before.
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On the contrary, it's pre-meds who are even aware of a difference. Doctors are just Doctors to 99.99% of the population, and they are going to assume the D.O. is some fancy extra title rather than an alternative to being an MD if they even pay those letters any attention at all. I think you're spending too much time on SDN...if you hang up a sign that says "Dr. Chilly Willy, D.O., Family Physician", practically no layperson is going to think, "DO? What's that? That must not be a REAL doctor!" They're just going to see "Dr." and "Family Physician" and know it's a doctor's office.
 
guylewis said:
increase in medicaid reimbursements by 74% as part of the law, if I'm not mistaken
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Do you mean 74% increase over what it has been, or increase to 74% of Medicare rates? If it is the former, then that's a huge reward to docs who treat Medicaid patients.
 
Insurance companies can also downcode your billing. So if you bill a level 3 visit for $100, the insurance may decide that the visit is worth a level 2 visit instead of a level 3 visit and pay you $60 instead of $100. If you want that extra $40, you may have to appeal (and submit documentations). Now add hundreds to thousands of patients where this happen. And do you have adequate documentations (a headache in itself). And insurance can sometimes reject the claim (of course you already provided service, and it can be a few weeks later that the insurance companies tell you that they are denying the claim). Again, if you want that $100, you will have to appeal.

And some states are notorious for late reimbursements. Illinois can take as long as 270 days to reimburse your office for medicaid claims. Some commercial insurers can take several months to reimburse your office. And you will need a good book-keeper/accountant to keep track of the delayed payments, the downcoding, and the denials (as well as the appeals).

And while you wait to get paid, your bills will add up. For employees, you will have to pay the employer payroll tax (half of their social security and medicare taxes). Will you also offer health benefits? What about retirement benefits?

In addition to rent/utilities, you will have to pay for the medical office equipments (one time expense unless you lease/rent those), ongoing medical expenses (gloves, tongue depressors, otoscope covers, etc), as well as the usual business insurances (liability insurance if someone slips and falls in your office, or if someone sues you for sexual harassment or racial discrimination). Plus you have to maintain all the proper permits and inspections as required by local, state, and federal agencies.

All this in addition to your medmal insurance, license, board certification fee/MOC, ongoing CMEs, DEA license, etc.

And federal mandates can be expensive. EMRs can cost hundreds of thousands of dollars for a small office to upgrade. That will eat into your cost/profits. Maintaining immunizations at control temperature (and checking to see which are expired). Inventory control is important.

Basically you're a small business owner. Your income will be what's left after what you collect (or manage to collect) minus all your expenses.

Do it right, and you can make lots of money. Do it wrong, and you may just barely break even, or even run in the red.

*the hard part is the initial start-up cost since the cost will be high, and you may not have a consistent revenue stream for several weeks if not months. Sometimes it is easier to buy an existing practice (with an already established patient base, but you pay for that), or buy into a partnership.
 
Bill Brasky said:
On the contrary, it's pre-meds who are even aware of a difference. Doctors are just Doctors to 99.99% of the population, and they are going to assume the D.O. is some fancy extra title rather than an alternative to being an MD if they even pay those letters any attention at all. I think you're spending too much time on SDN...if you hang up a sign that says "Dr. Chilly Willy, D.O., Family Physician", practically no layperson is going to think, "DO? What's that? That must not be a REAL doctor!" They're just going to see "Dr." and "Family Physician" and know it's a doctor's office.
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I don't know about white American patients, but definitely Asians and Indians will think that (who make up a good Percentage of the medical field besides whites)
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
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Really? You really believe that?

I'm constantly shocked how many times I'm asked what type of nurse I want to be after I introduce myself as a medical student, TO PEOPLE WHO WORK AT THE HOSPITAL!

If random Techs and nurse assistants etc. don't even know that med-school and nursing school are different, nobody is going to care or realize that DO is a different set of letters than MD.

That and the fact that even in a highly DO-unfriendly state such as the one I'm in right now, better than 10% of the "top-docs" in my hospital region (as rated by patient survey) happen to be DO's tells me you're vastly overstating yourself here. By the way, DO's are so few here that I seriously doubt they even represent 2% of doctors in the area.
 
Chillywilly said:
I don't know about white American patients, but definitely Asians and Indians will think that (who make up a good Percentage of the medical field besides whites)
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The family physician, DO I shadow will see many Indian and Asians every week in a very high end part of town and is voted top doctor every year by this community........so the validity to this statement seems to be quite the unfounded hasty generalization.
 
Chillywilly said:
Sorry I didn't mean to offend, was just trying to be realistic. You're right most patients don't care, but imagine you weren't a premed, and you never heard of a DO before.
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are you calling yourself realistic? only ppl who takes damn care of the DO or MD title is pre-med. once you get out, no one gives damn about it
 
Chillywilly said:
I don't know about white American patients, but definitely Asians and Indians will think that (who make up a good Percentage of the medical field besides whites)
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This is so ignorant.... I can't even..


group_theory said:
EMRs can cost hundreds of thousands of dollars for a small office to upgrade.
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The primary care office I worked for went completely electronic and the EMR cost a cool MILLION.
 
Chillywilly said:
I don't know about white American patients, but definitely Asians and Indians will think that (who make up a good Percentage of the medical field besides whites)
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I agree to this statement to a certain extent...being from CA, I know that there are Asians patients who only care about their doctor's prestige so they will only see MDs that graduated from Stanford, UCLA, UCSF, Harvard, etc, which means they won't even see an MD that graduated from NYMC or any middle or lower tier MD schools. However, there are also plenty of Asian patients who don't care about the doctor's background as long as they are competent and have good bedside manners. Its interesting cause one of the FM DO in my area that owns a private clinic has so many patients (mostly Asian ones) that they can't take any new ones. (I know this because I tried to go see her but was denied)
 
Chillywilly said:
Um, just to keep in mind, most patients don't know what a DO is. So if you own your own practice, with your name "Dr. Jane Smith, DO" on a sign, I don't think most patients will come to you, because they wouldn't know what a DO is in the first place.

As for me, I intend to work in a hospital setting since I need drama and fast-pace work environment in my life. Plus, you treat patients without most questioning your degree.
Click to expand...

You probably don't put your name on the sign like that. You would put "Family Physician" or something like that as a sign on the front. Most likely, you'll be employed by a private practice group and then buy into the equity later. It's much harder to fly solo.
 
This is an impossible question. There are docs here in sf that have a marijuana practice charging 80 a visit with nearly no overhead and just a college kid making minimum wage as a secretary. These people pull easy 300k+. I even met an omm guy with 4 month waiting list making 200 bucks for 30 min visits. This is easily a 400k operation. If you want to make money in medicine, there are ways.
 
AlbinoHawk DO said:
This is an impossible question. There are docs here in sf that have a marijuana practice charging 80 a visit with nearly no overhead and just a college kid making minimum wage as a secretary. These people pull easy 300k+. I even met an omm guy with 4 month waiting list making 200 bucks for 30 min visits. This is easily a 400k operation. If you want to make money in medicine, there are ways.
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The marijuana doctors might be in big trouble when California legalizes it (either this year or by 2016 for sure). I'm sure it'll be hard for them to go back to regular practice after so many years of handing out weed prescriptions. Just my prediction, I could be wrong
 
Ibn Alnafis MD said:
Nice!

The only bummer is that it's only for 2 years and then it expires. I hope they keep extending it.
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That is scary indeed with this worthless congress that refuses to do anything that helps strengthen the ACA. Fortunately the doctors do have a fairly strong lobby. That's how they got this provision in in the first place
 
guylewis said:
The marijuana doctors might be in big trouble when California legalizes it (either this year or by 2016 for sure). I'm sure it'll be hard for them to go back to regular practice after so many years of handing out weed prescriptions. Just my prediction, I could be wrong
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Enough states are thinking of playing with medicinal marijuana. I think a smart doc would just move.
 
AlbinoHawk DO said:
Enough states are thinking of playing with medicinal marijuana. I think a smart doc would just move.
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True but then the endgame will be when all states legalizes it or the federal government gives up prohibition of it. It's going to happen eventually and when it does, those doctors will have no where to run to. They best save up as much as they can now
 
I'm guessing if you did FM->Sports medicine you could do OMM on a large percentage of your patient population and make decent money.
 
One thing to keep in mind is a family medicine D.O. doesn't have to be the one working in their practice 8-6 M-F. One that I shadowed goes to his family practice a few times a week, Hospital ER, his aesthetic clinic once or twice a week and also does hospice and palliative care. Granted this didn't happen overnight and he works like a madman but, he is making substantial amounts of money and truly loves being a doctor and the patient interaction. He always tells me, "hey when you get done with school, if your lazy and want to work for someone else and make someone else rich, look me up." LOL.... he always makes me laugh great guy, great personality and nice to learn the business side of the game from someone who also has the biggest sense of compassion for his clientele. He also put D.O. schools in perspective for me personally and pointed me down the right path, I have met some great family med D.O.'s and it is an attractive option for me thus far.
 
Bacchus said:
Asthethics is where its at. I just feel like its selling out. :\
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Just think of it as helping the Dermatologist/Cosmetics guys out so their not so busy :laugh:
 
NontradCA said:
Check this out:

http://forums.studentdoctor.net/threads/are-fp-residents-familiar-w-direct-primary-care.1047025/
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I was going to post this until I saw you had. Pre-meds fear not, a viable and sustainable business model for primary care exists. Click the link NontrdCA posted and learn about direct care.

Patients pay a monthly membership fee so theres no insurance headaches. That FP has on average 8-10 patients a day and hes clearing $200k. He also said he does admin stuff during his work day so you could see more patients than he does in this model and make more $$.

I think I would be very happy in this practice and his patients are too.
 
NontradCA said:
I'm guessing if you did FM->Sports medicine you could do OMM on a large percentage of your patient population and make decent money.
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This sound incredibly appealing to me.
 
guylewis said:
True but then the endgame will be when all states legalizes it or the federal government gives up prohibition of it. It's going to happen eventually and when it does, those doctors will have no where to run to. They best save up as much as they can now
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That is true, but these are also the same type of doctors that will probably turn to things like tattoo removal. If you get money from the government to remove tattoos of former inmates, that can make a lot of money. You only need a nurse to do the procedures (an LPN even) and you can open up branches to make a lot of money.
 
AlbinoHawk DO said:
That is true, but these are also the same type of doctors that will probably turn to things like tattoo removal. If you get money from the government to remove tattoos of former inmates, that can make a lot of money. You only need a nurse to do the procedures (an LPN even) and you can open up branches to make a lot of money.
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LOL this thread is turning into "How to make money as a physician doing things slightly related to medicine"
 
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