Joining Small Solo Practice

[GatorCHOMPions]

I am a fellow on the job search now and one intriguing offer was joining a doc in solo practice whereby I would essentially create my patient base from scratch. He would simply offer me a percent of collections (TBD) and handle all the overhead. He admitted that marketing was never his strong suit or interest and most new patients are from finding him on an insurance list. I am looking for how to manage expectations and identify any pitfalls. I like the idea of being somewhat in control of my own destiny without taking on the debt of renting/owning a building, supplies, and staff. I have a bit of money saved already from being an attending a few years prior to going back into training, and was thinking I could work some EM shifts per diem as things would probably take a little while to ramp up. A little bit about the practice below:

It is located in a city of about 50k and the surrounding county has a population of 800k. There is a major medical center within a mile radius and a half dozen or so pain practices I have identified on Google within a 5-10 miles radius. I found the job by cold calling the office. He wasn't actively seeking anyone but is looking to retire in 3-5 years and so was open to meeting with me. He floated the idea of selling the practice (to me) when the time comes. He works about 2.5 days doing pain in the office and anesthesia the other times at other offices not affiliated with the pain practice. Aside from the building itself he owns a C-arm, US machine, RFA (outdated), centrifuge (new), and in-house PT services which come about twice per week. Procedures are done in the office except for SCS which is at a local hospital. I do not know the extent of his office staff and/or ability to ramp up as I grow, but this will be part of the next round questions I ask.

What are some other things I want to know before jumping in, and are there any red flags with what I have described so far? What is a fair percent of collections to negotiate? What is a reasonable collections figure target in year 1 , and how long would it take to reach steady state? Is the juice usually worth the squeeze in these types of arrangements?

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[nvrsumr]

I would just start ur own practice. U can get an sba loan easy if purchasing real estate as well and have easy ER side gig for income while u ramp up and to qualify for loan

That set up is all the bad of pp and little of the good.

Almost everything you need info wise to start is searchable in the pain forums

 

[Dr. Ice]

I think you can probably do whatever you want in Florida..agree with start your own stuff

 

[GatorCHOMPions]

I would just start ur own practice. U can get an sba loan easy if purchasing real estate as well and have easy ER side gig for income while u ramp up and to qualify for loan

That set up is all the bad of pp and little of the good.

Almost everything you need info wise to start is searchable in the pain forums

All the bad meaning hustling to find referral sources? At this time in my life it's just too much of a commitment to start a practice from scratch and feel this setup could be the next best thing. After fellowship I am moving across country, buying a house, and have a couple young kids. Are you able to provide guidance on what to ask or expect in joining a small PP as described above?

I think you can probably do whatever you want in Florida..agree with start your own stuff

This is not in Florida, but what do you mean by that?

 

[nvrsumr]

I am a solo PP doc but my setup is different. Good luck

 

[Ferrismonk]

It could work, but realize that this practice seems to by dying and you're basically already starting from scratch, but with the old practice pattern/layout/policies in place. It all depends on the specifics. Could be a diamond in the rough if managed well.

Here are my red flags:
1. He obviously doesn't care about the practice. He doesn't market, uses old equipment, and even splits his time doing anesthesia late in his career.
2. Relying on insurance referrals in a saturated market (which is what you describe) means he's getting the bad insurances. It'll be hard to make it work financially if you're collecting percentage of collections.
3. Is he leaving his office empty half the time so he can work anesthesia? If so, that's wasted overhead. Bad sign about practice decisions.
4. If he sells the practice to you, he'll still be your landlord and be collecting rent. Make sure you'd be okay with this arrangement. Is he updating the building or letting it rot as well?

That being said, it IS a list of patients which is nice when first starting out. Here's my advice:

1. A reasonable pay by percent collections depends on what the overhead is and what he means by "handle all the overhead". You need to understand roughly how much the overhead is (as a percentage of office collections). The devil is in the details, but I think a negotiated pay rate would be somewhere around 40-45% of your collections, assuming he's handling ALL the overhead.
2. If you're doing marketing as well, that's overhead. Maybe you'll need to negotiate a higher percentage if you'll be doing this yourself (which you probably should.)
3. Be clear how new patients are handled. Don't let him cherry pick the good referrals/stims and give you the Medicaid.
4. If you're interested in purchasing the practice, that should probably be discussed and negotiated before you sign, aka before you build up the patient base and make the practice much more profitable.
5. Discuss if PT or any ancillaries are part of your potential reimbursement. He's likely getting paid to be medical director of the Physical therapist as well as charging rent to this therapist while totally not having any conflict of interest in referring to this specific therapist.