Solo private practice straight out of residency

[Boba Foot]

Hello all,

Long time lurker here, since the pre-pod school days. I'm going into PGY-3 and have been thinking about the real world post residency for about 6 months now. I've seen lots of good advice on here, and the majority of yall seem to think practice ownership is the best route to take, as far as private practice goes, rather than becoming an associate. This really clicks with me, as the primary reason I decided to become a physician and go into podiatry was to ultimately be my own boss and be on my own eventually. The thought of still working for other people, especially for poor compensation, after all this work makes me want to vomit.

Can anyone offer some resources and advice for starting solo practice straight out of residency? Things to plan for, putting together a business plan, etc. Ideally I would like to start a solo practice with very low overhead and build up from there. In addition, what are the odds of security loans and financing for a solo practice straight out of residency? And would looking for a part time gig to supplement my own practice be a good idea?

Open to any and all advice offered. I've seen some good stuff on here.

---

Members don't see this ad.

 

[Feli]

I would avoid it fresh from residency (and this is from someone who seriously considered it... very glad I did not). Unless your residency was EXTREMELY strong in office rotations and billing, you need to pick up a lot of ideas, tactics, etc by being an employee at a good (or even fairly good) office. If your training was strong on that to the point where you know the codes, modifiers, etc etc etc... then that means it was probably mediocre on med/surg stuff (esp with COVID)... and you still might want to practice as an attending doc in a low-stakes environment of being an associate for at least a year or so.

"There are two ways to learn: from your mistakes or someone else's. One's quicker, and one's cheaper... and they're the same one."

The perspective you get from being a part of a private practice gives you that huge and permanent advantage in billing, staffing, marketing, etc. I think it is just too hard to do all of that and develop your patient care style at the same time alone and fresh out of training. You want to see the same office day after day and figure out what style works for you (many pts and many staff vs minimalist, multiple offices vs one, hospital consults and call or not so much, etc etc etc). You simply don't know those things until you try. Maybe there are exceptions, but nearly every successful owner doc does it that way (works employed in group/hospital/etc and then breaks off later solo... or buys out that employer doc).

Oh, and there's the whole thing of credit not being exactly liquid or A+ credit when you have huge student debt. Ask yourself if you enjoy doing nursing homes until your office is busy enough. There is also a factor of MAs being $20/hr+ in many areas right now since there is endless govt stimuli and long term unemployment from COVID making folks just sit at home, so it's tough to find/keep staff unless the job offer is enticing. EMR fees are not getting any cheaper, insurance are not easy, etc. COVID is still a huuuge wild card. It is not "over," vaccinated people will continue to die (esp from certain strains), and it remains as something that will most likely have mild/severe waves and could potentially close offices or neuter PP patient volume$$$ every winter or two for all we know. Many PP were crippled this time last year and grasping at straws for state bail-outs or tele-visit trickle income, and the DOW was in the toilet. Don't underestimate that. There is still a lot we don't know. Furthermore (and highly important), if you are in an area where non-compete isn't too enforced, then being an associate (or hosp employee) for even a year or two has huge advantage of giving you foothold on local payers/hospitals before you hang your own shingle.

...if you want books, Medical Entrepreneur by Hacker or Starting Your Practice Right by Fawcett are ok. There are none specific to podiatry that I know of... just newsletters, AAPPM meetings, making connections, etc. Don't get me wrong, the training wheels need to come off at some time and owner/partner/hosp/MSG should be the end goal, but there is zero shame in being an associate for a couple years, having stable income floor, developing your patient style, getting some surgery on your logs for boards, seeing how COVID plays out, and keeping your eyes open on how the business runs (and could run better!) before trying the solo gig. Think of it as a few years making $150k to gain the potential to make $500k instead of $350k per year for decades when you do leave the nest. GL

 

[heybrother]

I have more to say when I can, but my concern for right now is that you are late to the game. ie. the amount of things to be done and plans to be made cannot be accomplished with what you have going on.

ie. setting up, credentialing, choosing your city, office design etc.

I'm not saying it can't be done - I'm just under the impression that most people who attempt to do this start essentially their first year of residency and go into it with a plan already in place.

My suspicion is you are going to have to be an associate somewhere. Now - here's the real issue. Some associate jobs are tailor made to help you become an owner. ie. if people show you how the business works ie. you want to be able to enter your own billing/coding, you want to see how things are paid and the things that go wrong along the way. If your OM is leaving contracts with insurance renewals etc on your desk this is where you acquaint yourself with fee schedules, what insurance demands etc. In short - its nice to be coddled, but if people show you how the sausage is made by showing you the process along the way it will help you attack the process on your own. Others though are not. I've got friends who don't do any of their own billing and can't see any of the behind the scenes action.

The bummer is - I honestly think a lot of PP associate jobs are bordering on negative money. The idea that you'd make $150K for a few years and then start your own thing - there's tons of associates who never make that. They start. Build from scratch never being paid. Leave owing tail. The malpractice companies don't take into account that you got paid nothing or only saw 8 people a day your first year.

Briefly though - we all go on about PP ownership because being an associate sucks so hard. PP is still hard. You have to market. You have to do a good job. And you constantly have to review everything related to your billing and what's getting paid and not getting paid. The other day I was the only person who noticed that we weren't getting paid by an insurer in our area. It turned out to be way more complicated and was "fixed". Except I reviewed the fix and it was botched too to our detriment. I then reviewed it with our OM who was still like - no, see, we got paid and I was like - no, we didn't. I also caught that 2 major surgeries were never submitted to insurance. And then I caught a case where the insurance asked for more paperwork, but no one ever sent the paperwork and the surgery was about to expire. It just goes on and on and if you are the owner the idea that "someone else should be doing it" while technically true doesn't really apply - the only person who cares that you get paid is you. Maybe your wife who you should definitely hire, much to your future associates chagrin.

 

[619]

Feli said it best. I currently own my practice however I worked for about 18 months as an associate before branching out. The experience I learnt as an associate is priceless even though the pay was low. I was also making $100k base and obviously did not hit my bonus the first year but I knew my end goal was to open my own practice sooner rather than later.

Being an associate in the first few years; you learn, unlearn and relearn. OP can PM me if you have any questions.

 

[GreenHousePub]

Can anyone offer some resources and advice for starting solo practice straight out of residency?

Contact Mike Crosby.

Welcome To Our Practice

Brentwood Podiatrist. Provider Resources LLC is a podiatry office in Brentwood, call us today at (602) 614-2767!!

www.providerresourcesllc.com

When our private practice takeover fell through, he set us up to start a new practice with a business plan, what to expect and outlined everything. Very affordable and well worth every penny.

You can start up a practice with a loan of about 50k and take home about 100k within a year.
You can do it without sitting as an associate for 2-3 years, you'll have some bumps along the road but you'll get it with time.

 

[Boba Foot]

Contact Mike Crosby.

Welcome To Our Practice

Brentwood Podiatrist. Provider Resources LLC is a podiatry office in Brentwood, call us today at (602) 614-2767!!

www.providerresourcesllc.com

When our private practice takeover fell through, he set us up to start a new practice with a business plan, what to expect and outlined everything. Very affordable and well worth every penny.

You can start up a practice with a loan of about 50k and take home about 100k within a year.
You can do it without sitting as an associate for 2-3 years, you'll have some bumps along the road but you'll get it with time.

You're speaking my language. How much can Crosby do as far as setting up a practice? Like what falls within his service as opposed to what I need to do on my own or possible farm out to someone else?

 

[dtrack22]

I’ve had Mike help with valuations for practices/partnerships but didn’t know he did any practice management consulting.

That’s really what you need coming out of residency. Someone who can walk you through setting up employee manuals, inventory systems, hiring/employment help, navigating credentialing/contracting, DME licensing, workflow strategies, billing/coding, obtaining equipment, providing common forms like ABNs and financial policies and HIPAA releases, etc. They will cost you ($10-15k pretty easily), but I don’t think you have a choice if you’re starting up right out of residency without learning (and taking) a lot of that stuff from a previous job as an associate.

Most of the folks I know who started their own clinic at least did some nursing home work/house call type stuff for other people right out of residency while getting their own practice set up. I’m not sure how feasible it is to do all of this while you are a 3rd year resident. Because if you want to see patients in your own practice within 3-6 months from graduating you can’t “start” the process of setting up a practice on July 1

 

[deleted1138023]

does anyone else have any experience starting their own private practice right out of residency? difficult/near impossible to do without any business experience?

 

[Feli]

does anyone else have any experience starting their own private practice right out of residency? difficult/near impossible to do without any business experience?

It's not just the biz exp, it's the financing and that there are literally 100 boxes to check to start a solo office. I get PMs about it a lot.
It can be daunting even with exp in PP. That is why it's so popular for hospitals or MSGs to "help" a young DPM - or even an exp one - basically build them a F&A office from scratch (which the facility then owns and can install subsequent DPMs... original DPM merely builds their own job). I got that PM this past week.

Worst of all, even if one has the money to do it and they get an office going, how will they know if they are doing poor/good if they have no basis for comparison? Somebody could run an inefficient office for years with a biller stealing from them, competitors taking all of the best payers, numerous staff and supply and overall inefficiencies, etc.

Even if an associate or hospital employed year or two or ten is not fun (few will say that it is!), you will perform much better on billing/coding, you have exp, you might have boards done, and you have savings and retirement built up as cushion. That is why you see startup podiatry office done that way again and again and again. It's because that is the best way.

Sure, you see the occasional person do it right out of residency. They almost universally have "independent" or family $$$ help. That does two important things: money is not much of a worry AND profitability was never the huge goal since they had $$$ covered all along. Most people coming out of DPM residency are absolutely not in that boat.

 

[bloxxeeey]

It's not just the biz exp, it's the financing and that there are literally 100 boxes to check to start a solo office.
Worst of all, even if one has the money to do it and they get an office going, how will they know if they are doing poor/good if they have no basis for comparison? Somebody could run an inefficient office for years with a biller stealing from them, competitors taking all of the best payers, numerous staff and supply inefficiencies, etc.

Even if an associate or hospital employed year or two or ten is not fun (few will say that it is!), you will perform much better and have savings and retirement built up as cushion. That is why you see startup office done that way again and again and again.

Sure, you see the occasional person do it right out of residency. They almost universally have "independent" or family $$$ help. That does two important things: money is not much of a worry AND profitability was never the huge goal since they had $$$ covered all along. Most people coming out of DPM residency are absolutely not in that boat.

I've spoken to a couple of attendings who have started a practice right out of residency, and they made less their first year than associates. They would have benefited from the extra money and experience of working as an associate first then making the jump to their own practice.

 

[Feli]

I've spoken to a couple of attendings who have started a practice right out of residency, and they made less their first year than associates. They would have benefited from the extra money and experience of working as an associate first then making the jump to their own practice.

Yes. At the end of the day, it's just not fun for most to sweat that they are close to bouncing their employee paycheck, that they might be missing things left and right, or that their family is eating mac-n-cheese and taking zero vacations so that they can buy another month's rent or run a few more facebook ads and hope it picks up.

Again, if their name is Kraft or mommy and daddy have the DPM's back or they were a uber successful attorney before DPM school or something, it's different. It was also fairly different pre-GFC market crash 2008 when lending was a lot more loose and student loans weren't as massive.

Nobody needs 500k saved to open up shop, but you still need some equipment and some financial buffer. It can be done, but like any venture, knowledge and savings are quite helpful. That is why banks want a business plan and a budget. One thing I'll also say is that it never hurts to learn the area payers and area doc refer patterns and competition before one hitches their wagon with 10 chains to that city/suburb/town. That can be done a bit with Google, but there's no better way to truly learn than working in or near where you might open. The obvious exception is if it's a place with large and enforced non-competes. For most residents, though, the only area they know the podiatry politics/methods for is their residency city, which is almost universally a poor or very bad or horrible place to practice in terms of saturation and entrenched competitors. And even there, residents don't know what they don't know. Doing a couple employed years, starting solo and doing well, and thinking, "I should've done this sooner" is not bad. Jumping into solo without financial stability or knowledge can have as many pitfalls as the day is long.

Take home:
Not being able to find a job you like is not a good reason to automatically start solo (assuming you're not independently wealthy).
Working job(s), finding out what you like and don't like, gaining intel, gaining savings... THEN starting solo is much more classically tested and successful.

 

[GaftAndToe]

I am interested, for people who opened their own practices, what did you do about insurances? I started as an associate and some insurances take 7+month to get approved, even though it was approved for the other doctor in the practice. My understanding that they have to approve me, they just take forever because another doctor in the office is on the same insurance. However if I open my own and not buy a retiring practice, some insurances can just refuse to accept me as a new provider.

I am not seeing enough patients at all as a new associate, some days 5-6 patients. I do not think location is great. My boss wants me to drive around and market. Honestly its been very annoying to have super slow days and do weekly marketing for someone else's practice. Not sure if that's the norm, but I also confused why would someone hire a person if there is not enough patients.

I do not expect any bonus, but I am not even sure what my productivity is, and what I am bringing in with so slow days.

I was thinking more about opening a practice or buying out a retiring person's practice. I think I would be more motivated to do marketing and invest my time and effort into the practice. I am honestly very frustrated about the whole situation.

 

[pod squad]

Welcome to associate life, it's real glorious. Look into joining an IPA (independent physician association) to help get on plans with decent rates. Process usually takes 3-4 months.

 

[619]

Welcome to associate life, it's real glorious. Look into joining an IPA (independent physician association) to help get on plans with decent rates. Process usually takes 3-4 months.

This is the way. Most times, you open shop with only being credentialed with medicare, medicaid and maybe BCBS. Aetna, Cigna, UHC etc will come in later and you have to accept you may not get in all the plans. Joining an IPA will definitely help. At the end, you just have to deal with the cards you have in hand.

That is why it's important to start small with no fancy equipment, no expensive EHR, 1 or 2 staff with small office space to help minimize cost and grow from there.

 

[GaftAndToe]

This is the way. Most times, you open shop with only being credentialed with medicare, medicaid and maybe BCBS. Aetna, Cigna, UHC etc will come in later and you have to accept you may not get in all the plans. Joining an IPA will definitely help. At the end, you just have to deal with the cards you have in hand.

That is why it's important to start small with no fancy equipment, no expensive EHR, 1 or 2 staff with small office space to help minimize cost and grow from there.

Would you recommend buying someone else's practice and have them there for transitioning process? Or start off completely new?

 

[icebreaker32]

This thread probably speaks more to what a career in podiatry is like than older attending trying to explain things.

There is no easy way when or how to start a practice. We tell others to consider it, but then warn you about it. Sadly it is the most honest way to talk about it.

1. As mentioned there are almost unlimited things ones needs to do to open a practice.

You usually need a physical address for credentialing and changing a physical address is a hassle. Credentialing is a pain and many pay other people to assist with this. Some plans do not accept new providers. You will get on Medicare and Medicaid, but it may take a month longer than however long you were told it was taking new providers or even longer if you filled out some form wrong.

Some new providers take patients and do not charge if they feel they are getting close to getting on the plans or others just wait until they are on the plans to accept those patients.

Yes you need to keep expenses low. You can start part time (even with a full time employee and full lease). It is actually advised to schedule patients close together even if you are only enough to see 5 patients three days a week. You schedule the 5 patients 3 different days (maybe 2 mornings and an afternoon or 2 afternoons and 1 morning within a couple hour window.

2. A source of income is obviously necessary to not only cover expenses but to live on. There are many sources such as a spouse, family money, savings, nursing home work etc.

Every market is different and you could take twice as long as someone else to get busy even if you will eventually be very successful. If you only have 6 months to cover your office and living expenses and you have a family to support it could be very stressful, so stressful that you are changed for life in certain ways and can easily repeat the cycle of really underpaying an associate and having no remorse about it when you finally are doing well. It does not make it right, but you will also understand the temptation many podiatrists have to do scammy things.....to get by in the beginning or to do well later on. Be careful!

Some private practice experience will help with number 1. Most work as an associate for a couple years or at the very latest are planning their next move by the 2 years mark.

Other remarks:

I do not think it is impossible for an employer to lose money on an associate. The cost of an MD is so high they would not hire one in PP if they only thought were busy enough.

It is not impossible to go bust in solo PP also. It is just the risk to reward analysis makes it worth while if stuck in a poor associate job.

The original poster stated he saw himself as working for himself. That is a good sign. Anyone going into podiatry should know this is a real possibility.

You can start to understand why we advise others to at least consider becoming a PA, if they can not get in DO school.

If you can become board certified in surgery as an associate an option is to hold on an look for better jobs if you are geographically open. Once you start your own office it is much harder to leave.

As far as buying a practice it makes perfect sense on paper as banks will be more likely to loan the money. Many used to go this route. I have now mainly seen married podiatrists going this route and they were often geographically open in doing so for the right practice. The value of a practice is much less without a transition.

 

[619]

Would you recommend buying someone else's practice and have them there for transitioning process? Or start off completely new?

It depends on the sale price? If the retiring pod os realistic and not trying to sell his practice for a million bucks then you can go that route. Personally one of the reason to buy someone else is mainly for the office location depending on what city you are. A retiring pod who is already slowing over the years and maybe have 1-2 staff left then it's a good buy for a cheap price. You don't want to buy a big practice with 8-10 staffs so you have to take over the whole machine then it's more risky. At the end it comes down to price.

You are already working as an associate and hopefully currently learning a lot especially with billing etc. Right now is time for you to learn from the medical assistants and watch what they do. You should be able to run the back office yourself without a medical assistant. If you are confident in that then I don't see why you can't start solo, do your own marketing etc and have just one staff up front.

Even with buying a retiring pod, for the most part, you still have to somewhat start new by opening/registering your new company, set up your group NPI, set up your new LLC, get your own Tax ID, insurance credentialing under new tax ID etc. That's why I said the best reason to buy a retiring pod is the office location (if it is a congested metro). Most patients are not going to hang around which is a good thing. You want to see new patients coming in for new complains and acute pathologies. You don't want to be seeing the routine nail care of the old retiring pod.

 

[GaftAndToe]

It depends on the sale price? If the retiring pod os realistic and not trying to sell his practice for a million bucks then you can go that route. Personally one of the reason to buy someone else is mainly for the office location depending on what city you are. A retiring pod who is already slowing over the years and maybe have 1-2 staff left then it's a good buy for a cheap price. You don't want to buy a big practice with 8-10 staffs so you have to take over the whole machine then it's more risky. At the end it comes down to price.

You are already working as an associate and hopefully currently learning a lot especially with billing etc. Right now is time for you to learn from the medical assistants and watch what they do. You should be able to run the back office yourself without a medical assistant. If you are confident in that then I don't see why you can't start solo, do your own marketing etc and have just one staff up front.

Even with buying a retiring pod, for the most part, you still have to somewhat start new by opening/registering your new company, set up your group NPI, set up your new LLC, get your own Tax ID, insurance credentialing under new tax ID etc. That's why I said the best reason to buy a retiring pod is the office location (if it is a congested metro). Most patients are not going to hang around which is a good thing. You want to see new patients coming in for new complains and acute pathologies. You don't want to be seeing the routine nail care of the old retiring pod.

I see, for some reason I thought that if I joint retiring person and work with them for few months, I should be on all insurances they were on, since we are same entity. Since just the owner of the place will be changing. So what you are saying, that I still would need to get al the credentialing same way as I would start completely new?

 

[GaftAndToe]

This thread probably speaks more to what a career in podiatry is like than older attending trying to explain things.

There is no easy way when or how to start a practice. We tell others to consider it, but then warn you about it. Sadly it is the most honest way to talk about it.

1. As mentioned there are almost unlimited things ones needs to do to open a practice.

You usually need a physical address for credentialing and changing a physical address is a hassle. Credentialing is a pain and many pay other people to assist with this. Some plans do not accept new providers. You will get on Medicare and Medicaid, but it may take a month longer than however long you were told it was taking new providers or even longer if you filled out some form wrong.

Some new providers take patients and do not charge if they feel they are getting close to getting on the plans or others just wait until they are on the plans to accept those patients.

Yes you need to keep expenses low. You can start part time (even with a full time employee and full lease). It is actually advised to schedule patients close together even if you are only enough to see 5 patients three days a week. You schedule the 5 patients 3 different days (maybe 2 mornings and an afternoon or 2 afternoons and 1 morning within a couple hour window.

2. A source of income is obviously necessary to not only cover expenses but to live on. There are many sources such as a spouse, family money, savings, nursing home work etc.

Every market is different and you could take twice as long as someone else to get busy even if you will eventually be very successful. If you only have 6 months to cover your office and living expenses and you have a family to support it could be very stressful, so stressful that you are changed for life in certain ways and can easily repeat the cycle of really underpaying an associate and having no remorse about it when you finally are doing well. It does not make it right, but you will also understand the temptation many podiatrists have to do scammy things.....to get by in the beginning or to do well later on. Be careful!

Some private practice experience will help with number 1. Most work as an associate for a couple years or at the very latest are planning their next move by the 2 years mark.

Other remarks:

I do not think it is impossible for an employer to lose money on an associate. The cost of an MD is so high they would not hire one in PP if they only thought were busy enough.

It is not impossible to go bust in solo PP also. It is just the risk to reward analysis makes it worth while if stuck in a poor associate job.

The original poster stated he saw himself as working for himself. That is a good sign. Anyone going into podiatry should know this is a real possibility.

You can start to understand why we advise others to at least consider becoming a PA, if they can not get in DO school.

If you can become board certified in surgery as an associate an option is to hold on an look for better jobs if you are geographically open. Once you start your own office it is much harder to leave.

As far as buying a practice it makes perfect sense on paper as banks will be more likely to loan the money. Many used to go this route. I have now mainly seen married podiatrists going this route and they were often geographically open in doing so for the right practice. The value of a practice is much less without a transition.

Thank you for the detailed response. I am pretty set on the location, so I do not plan to re-locate. I mostly was thinking retiring practice is better because no need to hire new staff, set up new EMR, etc. Hiring new people could be very hard, especially now.

 

[619]

I see, for some reason I thought that if I joint retiring person and work with them for few months, I should be on all insurances they were on, since we are same entity. Since just the owner of the place will be changing. So what you are saying, that I still would need to get al the credentialing same way as I would start completely new?

The problem with the same entity is you take liability for all past, present and future problems with the entity. Such as any audit, insurance claw back etc you are responsible. If you start your own entity (new tax ID and new group NPI) and new insurance credentialing then you are not in any way, shape or form responsible for any liability (past, present or future) of the retiring pod entity.

Also all the former patients of the retiring pod will be a new patient to you (they all fill out new patient paper work etc) and you bill new office visit which is huge from a revenue standpoint when you open shop.

Besides the advantage of taking over the office location of the retiring pod, you also take over the phone line, fax line number, hopefully keep same referral streams. Old patients will call the same office number and local PCPs will send referral fax to same fax number and all that comes to you.

 

[GaftAndToe]

The problem with the same entity is you take liability for all past, present and future problems with the entity. Such as any audit, insurance claw back etc you are responsible. If you start your own entity (new tax ID and new group NPI) and new insurance credentialing then you are not in any way, shape or form responsible for any liability (past, present or future) of the retiring pod entity.

Also all the former patients of the retiring pod will be a new patient to you (they all fill out new patient paper work etc) and you bill new office visit which is huge from a revenue standpoint when you open shop.

Besides the advantage of taking over the office location of the retiring pod, you also take over the phone line, fax line number, hopefully keep same referral streams. Old patients will call the same office number and local PCPs will send referral fax to same fax number and all that comes to you.

Thanks again. That makes sense