Is starting your own PP financially worth it?

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Drhappyface

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I keep hearing keep mixed things. Some say no given reimbursement are decreasing yearly while others say its the only way to get close to a high 6 figure/low 7 figure income.
 
Following this. I plan on starting my own soon and I want to see other's insights. With the way things are going its going to be a huge headache but I still think its better than being screwed by hospitals or PE.
 
Depends on where you want to hang up your shingle and what kind of pain practice. I feel like most people who are thinking about their own practice are in areas where there are already a fair number of pain physicians and the ideal job doesn’t exist. So from a practical standpoint, the question is how are you going to build up your patient volume. If you are an opioid-free practice, that’s great- but harder to woo referrals away from the doctors who already have established relationships and an army of midlevels writing refills. You can try to develop a relationship with personal injury/ambulance chasing law firms for supplemental cash as they will not expect you to write for pain pills. Those contracts can be competitive as well.

On the flip side, if you run your own practice and prescribe pain medication, you’ve created two ways to effectively never enjoy vacation time again. Someone always needs/wants a refill, expects you to be available immediately, has a prior authorization headache, etc. You live and die by how good your staff is, and it is very hard to find good staff who will stick with you for the peanuts you offer with no benefits compared to the hospital system or bigger groups. You can’t just be a doctor and do the doctor stuff, you have to be HR and admin. If you’re not business-minded that part can suck.
 
Drhappyface said:
I keep hearing keep mixed things. Some say no given reimbursement are decreasing yearly while others say its the only way to get close to a high 6 figure/low 7 figure income.
Click to expand...

Different strokes for different folks.
Time is a finite precious resource and someone needs to offer a fair value proposition for me to give it to their cause.

Strongly encourage you to break things down to total comp/hour worked (not just “salary,” but also retirement contributions, benes, PTO) in the context of the work environment when comparing job opportunities. In many markets, the math tends to favor hospital jobs these days. I know several hospital docs making >700k.

I would not recommend starting up a private practice solely for financial reasons as starting will be tough, there’s no guarantee of success (and legit risk involved), and you will be working mega hours both clinically and also as a business owner. However, if the idea of opening a practice means more to you than just the potential to earn massive coin, then it can be a great decision. You’re the boss and call the shots with how the place runs, who you see and how you practice is 100% up to you, no useless meetings with admin, and no insufferable yearly modules you have to do.
 
Absolutely. More tax-efficient than straight W2 income. You can take advantage of owner-occupied real estate and other investment opportunities. You can juice your pre-tax savings and retirement through HSAs, IRAs, and employing family members—most of all--freedom.

Fifteen years ago, running a private practice was a challenging endeavor. Now, you can run it off your phone--cloud-based EHR, revenue cycle management, payroll, and time-keeping, etc.

If you don't like the payer rates, don't take them! Just offer cash prices and be out-of-network. Patients' eyes pop out when they see their EOBs for the HOPD.
 
drusso said:
Absolutely. More tax-efficient than straight W2 income. You can take advantage of owner-occupied real estate and other investment opportunities. You can juice your pre-tax savings and retirement through HSAs, IRAs, and employing family members—most of all--freedom.

Fifteen years ago, running a private practice was a challenging endeavor. Now, you can run it off your phone--cloud-based EHR, revenue cycle management, payroll, and time-keeping, etc.

If you don't like the payer rates, don't take them! Just offer cash prices and be out-of-network. Patients' eyes pop out when they see their EOBs for the HOPD.
Click to expand...
yeah. they say "wow", look how much having insurance saved me from paying....... and your stem cells will cost me 5K drusso? ummm.......
 
I live in a rural area. Started 2 years ago. Very little competition, but what i learned is bad competition is better than no competition. All competition is hospital based, slow, and expensive. Our patients like efficient, less expensive, less BS than provided by hospital. Massively financially worth it.
 
SSdoc33 said:
yeah. they say "wow", look how much having insurance saved me from paying....... and your stem cells will cost me 5K drusso? ummm.......
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Arthroscopy. 2020 Jul;36(7):1983-1991.e1.
doi: 10.1016/j.arthro.2020.02.004. Epub 2020 Feb 14.

What Is the Appropriate Price for Platelet-Rich Plasma Injections for Knee Osteoarthritis? A Cost-Effectiveness Analysis Based on Evidence From Level I Randomized Controlled Trials​


Abstract​

Purpose: To identify the price of treatment at which platelet-rich plasma (PRP) is cost-effective relative to hyaluronic acid (HA) and saline solution intra-articular injections.

Methods: A systemized review process of the PubMed, Embase, and MEDLINE databases was undertaken to identify randomized controlled trials comparing PRP with HA and saline solution with up to 1 year of follow-up. Level I trials that reported Western Ontario and McMaster Universities Arthritis Index Likert scores were included. These scores were converted into utility scores. Cost data were obtained from Centers for Medicare & Medicaid Services fee schedules. Total costs included the costs of the injectable, clinic appointments, and procedures. The change in utility scores from baseline to 6 months and 1 year for the PRP, HA, and saline solution groups was divided by total cost to determine utility gained per dollar and to identify the price needed for PRP to be cost-effective relative to these other injection options.

Results: Nine randomized controlled trials met the inclusion criteria. A total of 882 patients were included: 483 in the PRP group, 338 in the HA group, and 61 in the saline solution group. Baseline mean utility scores ranged from 0.55 to 0.57 for the PRP, HA, and saline solution groups. The 6-month gains in utility were 0.12, 0.02, and -0.06, respectively. The 12-month gains in utility from before injection were 0.14, 0.03, and 0.06, respectively. The lowest total costs for HA and saline solution were $681.93 and $516.29, respectively. For PRP to be cost-effective, the total treatment cost would have to be less than $3,703.03 and $1,192.08 for 6- and 12-month outcomes, respectively.

Conclusions: For patients with symptomatic knee osteoarthritis, PRP is cost-effective, from the payer perspective, at a total price (inclusive of clinic visits, the procedure, and the injectable) of less than $1,192.08 over a 12-month period, relative to HA and saline solution.

Level of evidence: Level I, systematic review.
 
Yes. It is a lot of work though. I work twice as hard, maybe more. There is much more clinical work, but there is now admin tasks. My wife has to work a lot managing the staff.

But it is much more tax efficient and I have control and the opportunity to continue growing. My income was never going to advance as a hospital employee.
 
Yes it is worth it. I started my practice 3 years ago in a competitive area and have no regrets. As mentioned above, I work at least twice as hard as hospital docs. Also have to be a personable / likable person if you expect to market yourself effectively.
 
Painologist said:
Yes it is worth it. I started my practice 3 years ago in a competitive area and have no regrets. As mentioned above, I work at least twice as hard as hospital docs. Also have to be a personable / likable person if you expect to market yourself effectively.
Click to expand...
Hospital doc. New EHR is Cerner.
Spent the last month seeing 8 per day.
Will ramp up to 28 patients a day over next few months.

Half day today- seeing 9 including a post-op.
No surgery tomorrow.
No change in pay.
Pension building nicely.
No chance or need to grow the practice.
Just a cog in the wheel.
My 1099 income went up with the boredom in the office and my outside work.
 
lobelsteve said:
Hospital doc. New EHR is Cerner.
Spent the last month seeing 8 per day.
Will ramp up to 28 patients a day over next few months.

Half day today- seeing 9 including a post-op.
No surgery tomorrow.
No change in pay.
Pension building nicely.
No chance or need to grow the practice.
Just a cog in the wheel.
My 1099 income went up with the boredom in the office and my outside work.
Click to expand...
? pension? is that still a thing?

is it an average of percentage of your top income for a few years like in the public sector? that a nice benefit
 
Ducttape said:
my pension is the average of the last 5 years worked then adjusted for years worked.
Click to expand...
your hospital system offers a pension plan? do you pay into it in lieu of a 401k?
 
drusso said:
I didn't know you were so opposed to defined benefit contribution plans.
Click to expand...
im not. im opposed to "holier than thou" commentary.

i love the idea of a pension, but it only makes sense when you dont have to fully fund it yourself.
 
lobelsteve said:
Hospital doc. New EHR is Cerner.
Spent the last month seeing 8 per day.
Will ramp up to 28 patients a day over next few months.

Half day today- seeing 9 including a post-op.
No surgery tomorrow.
No change in pay.
Pension building nicely.
No chance or need to grow the practice.
Just a cog in the wheel.
My 1099 income went up with the boredom in the office and my outside work.
Click to expand...
5 days a week or 4 days a week?
 
I work less than 35 hours/week including running biz.

For other pp peeps- anyone use anything other than quickbooks for your bookkeeping? I keep it in house and have 6 entities. Subscription is $1000/yr
 
nvrsumr said:
I work less than 35 hours/week including running biz.

For other pp peeps- anyone use anything other than quickbooks for your bookkeeping? I keep it in house and have 6 entities. Subscription is $1000/yr
Click to expand...

Surprisingly, there is no single "enterprise solution" for medical practices that integrates revenue cycle management, payroll and HR, benefits, and accounts payable into a single platform. We use our EHR for revenue and QuickBooks for accounts payable.
 
lobelsteve said:
Hospital doc. New EHR is Cerner.
Spent the last month seeing 8 per day.
Will ramp up to 28 patients a day over next few months.

Half day today- seeing 9 including a post-op.
No surgery tomorrow.
No change in pay.
Pension building nicely.
No chance or need to grow the practice.
Just a cog in the wheel.
My 1099 income went up with the boredom in the office and my outside work.
Click to expand...

Were you in private practice before?
Whats your 1099 side gig?
 
Lets say if were to start my own practice in an area without too much competition, how long would it take to break even compared to an HOPD making 500k a year?
 
I think you will make $500k year one no problem if you have any existing contacts or the other physicians are all C tier.

Rent, c arm/furniture loan payment, utilities, emr is $10,000 per month. Billing, disposables, staff, is $20,000 per month for a single doc/start up practice. That is 250 office visits to break even. Then every procedure/additional office visit goes into your pocket.

This only works if you are an A tier doc.
 
BobBarker said:
I think you will make $500k year one no problem if you have any existing contacts or the other physicians are all C tier.

Rent, c arm/furniture loan payment, utilities, emr is $10,000 per month. Billing, disposables, staff, is $20,000 per month for a single doc/start up practice. That is 250 office visits to break even. Then every procedure/additional office visit goes into your pocket.

This only works if you are an A tier doc.
Click to expand...
IMO you’re underestimating expenses.
 
Very dependent on where you live. My lowest paid employee gets $27/hr plus benefits
 
it is pretty accurate for my first year excluding the unnecessary nurse practioner I had at the time. It is also excluding probably about $150k in misc start up costs.

The rent/utilitiites/c arm payment/emr payment is accurate. It is what I pay now.

Employee costs are variable though.
 
In your example you make 120/patient avg visit so 3000 visits cover your costs. You need another 4166 visits to make 500k more pretax. That’s a lot of visits. Or need to increase $ per visit with some $tem cell$ etc
 
Ronin1 said:
In your example you make 120/patient avg visit so 3000 visits cover your costs. You need another 4166 visits to make 500k more pretax. That’s a lot of visits. Or need to increase $ per visit with some $tem cell$ etc
Click to expand...
If you’re doing in-office procedures it’s going to be a lot more than $120/patient. Even a Medicare epidural is about $250, bilateral 2 level MBB I think about $500 and RFA about $1000
 
callmeanesthesia said:
If you’re doing in-office procedures it’s going to be a lot more than $120/patient. Even a Medicare epidural is about $250, bilateral 2 level MBB I think about $500 and RFA about $1000
Click to expand...
I was using bobs example of 360k overhead needing 250 visits a month to cover costs. 250x120. 30k

Obviously your clinic/procedure ratio matters.

I know I would have to see a lot more volume than I do in PP to make what I do in HOPD world.

That said if you are young in your career the time to open up your own shop was yesterday. U will reap the long term benefits
 
Is there any good resources you guys recommend on how to help set up a PP? There seems to be lots of steps eg getting insurance contracts, billing, equipment etc etc thats hard for a newbie.

So about 250 visits at $120/visit should cover cover the 30k but for a physician starting out, how long would it take to ramp up to average atleast 250 visit in a month? Weeks? Months? >1 year+?
 
For insurance contracting, everyone here uses the same consultant. Billing, you would outsource that. My billing company CEO helped set up my practice. So that might be a good contact for you when you are ready. Equipment to me is fun/easy. I think I have a long detailed post about the equipment in my post history from 2022 or 2023.

I started billing on my own July 1 2022. I was only in clinic 1 day a week for the first 3 months. In October, I began having a NP there every day. I still worked at the hospital.
We collected around $300k in those 6 months. Which despite being low paid the costs, and you have a 6 week minimum delay in A/R. So total money collected from the work done over those 6 months is more than that.
 
Here are the actual numbers
July 1 - 31, 2022 $2305.22 all copays, over $500 was that from one patient self paying for office visits and a procedure

So no insurance payments at all the first month.

July1-Aug31 $29,173.52

So we are still in the hole minimum $30k

July1-Sep30 $76,782.21

Barely climbing out of the hole. Down $25k still minimum

July1-Oct31 $104,553

Remain down $15,500

July1-nov30 $191,577

🕺 out of the hole and profitable

July 1-Dec31 $272,092

July 1 - Jan31 $382,548
I became “available” 4 days a week starting in January. Took a long vacation to Colorado somewhere in that month.

July1-Feb28 $488,167

Now available 5 days a week and focused only on my private practice

July1 to June30 $1.388M total first year collections.
 
BobBarker said:
Here are the actual numbers
July 1 - 31, 2022 $2305.22 all copays, over $500 was that from one patient self paying for office visits and a procedure

So no insurance payments at all the first month.

July1-Aug31 $29,173.52

So we are still in the hole minimum $30k

July1-Sep30 $76,782.21

Barely climbing out of the hole. Down $25k still minimum

July1-Oct31 $104,553

Remain down $15,500

July1-nov30 $191,577

🕺 out of the hole and profitable

July 1-Dec31 $272,092

July 1 - Jan31 $382,548
I became “available” 4 days a week starting in January. Took a long vacation to Colorado somewhere in that month.

July1-Feb28 $488,167

Now available 5 days a week and focused only on my private practice

July1 to June30 $1.388M total first year collections.
Click to expand...
Very impressive that you were able to get enough volume in year one to make those numbers. Most of the people I talk to (who granted are in areas with a fair bit of competition) take well over a year before they're booking 20+ patients/day.
 
There is lots of completion here.
Doesn’t mean it is anything to be worried about.

Things that helped:

My hometown is about an hour away. I have complete loyalty from patients from my home county. They either know me, my wife’s family, or my cousins with maybe 2 degrees of separation at the most. All of my teachers from school come in to see me. They like coming to see me, get something to eat, then go to Sam’s Club.

I had already lived in the city of the new practice for over 2 years. So made my own local friends, acquaintances that sent people over.

I had also been working 1 day a week through a friends practice using his secondary site that was being underused here. Most of those patients followed me to my own practice. I don’t think he tried to keep any, but things happen. Not all of them made the transition.

I had been very impactful at the hospital 45 miles away for years. Surgeons already knew my name. Now they could reasonably send me patients from the metro. No reason to send a patient from the metro to a rural hospital employed doctor.

I had many patients followed me from my old practice despite the distance. Now we trade patients back and forth in a friendly fashion. A lot of my patients in this group have died of old age or drifted back to the hospital as they have gotten older due to ease of access.

We had two med only doctors die. I did see and try to help these patients. Very challenging but I had time to deal with the needed, difficult discussions. Some are still in the practice.
 
Thank you for such a detailed response.

How are you doing now 2-3 years out? Is your collections the same? Did you grow your practice to add additional services? How's your payor mix? (You mentioned a rural area so I assume a lot of medicare?)
 
BobBarker said:
Here are the actual numbers
July 1 - 31, 2022 $2305.22 all copays, over $500 was that from one patient self paying for office visits and a procedure

So no insurance payments at all the first month.

July1-Aug31 $29,173.52

So we are still in the hole minimum $30k

July1-Sep30 $76,782.21

Barely climbing out of the hole. Down $25k still minimum

July1-Oct31 $104,553

Remain down $15,500

July1-nov30 $191,577

🕺 out of the hole and profitable

July 1-Dec31 $272,092

July 1 - Jan31 $382,548
I became “available” 4 days a week starting in January. Took a long vacation to Colorado somewhere in that month.

July1-Feb28 $488,167

Now available 5 days a week and focused only on my private practice

July1 to June30 $1.388M total first year collections.
Click to expand...

BobBarker said:
There is lots of completion here.
Doesn’t mean it is anything to be worried about.

Things that helped:

My hometown is about an hour away. I have complete loyalty from patients from my home county. They either know me, my wife’s family, or my cousins with maybe 2 degrees of separation at the most. All of my teachers from school come in to see me. They like coming to see me, get something to eat, then go to Sam’s Club.

I had already lived in the city of the new practice for over 2 years. So made my own local friends, acquaintances that sent people over.

I had also been working 1 day a week through a friends practice using his secondary site that was being underused here. Most of those patients followed me to my own practice. I don’t think he tried to keep any, but things happen. Not all of them made the transition.

I had been very impactful at the hospital 45 miles away for years. Surgeons already knew my name. Now they could reasonably send me patients from the metro. No reason to send a patient from the metro to a rural hospital employed doctor.

I had many patients followed me from my old practice despite the distance. Now we trade patients back and forth in a friendly fashion. A lot of my patients in this group have died of old age or drifted back to the hospital as they have gotten older due to ease of access.

We had two med only doctors die. I did see and try to help these patients. Very challenging but I had time to deal with the needed, difficult discussions. Some are still in the practice.
Click to expand...
I think the ramp up definitely was an outlier since you worked in the area before and had referral patterns already built in, but nonetheless, it still takes time to build those connections that the OP might not have starting out.
 
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