Starting Your Own Practice/Buying One

[bulldogmed]

How feasible is it to start your own practice these days in GS? I know it's probably a lot harder than it used to be. How many physicians would you want in your group to effectively split call and share overhead? 4-5? Are the start-up costs outrageously high?

Alternatively, I assume it would be easier to join a practice with some aging physicians and eventually take it over yourself. I'm asking because I really like the idea of working for myself and not a hospital, which sadly, is where I see a lot of doctors heading.

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[Winged Scapula]

This is a complicated topic and is bound to change over the years. GSResident has catalogued his experience at opening a Plastic Surgery practice and I find that a lot of the information is relevant to any private practice: http://forums.studentdoctor.net/threads/first-2-weeks-in-practice.542695/

What my partner did was to develop a marketing plan which showed the lack of coverage in our specialty in town, the training that she had that no one else in town at that time had, and she shopped it to local hospitals for assistance. She did not have a rich uncle or anyone to help her with start-up costs; one of the local hospitals provided it to her, much as you would a salary guarantee. However, by way of full disclosure, she did have a husband who had a good salary working for Intel to help her through those first few lean months.

Surgical practices tend not to have a lot of overhead; most of it will be spent on employees or any capital expenses (if you have equipment like an ultrasound in your office) and your EMR. You aren't going to be stocking medication, vaccines, EKG machines, etc. that an FP would.

In terms of "splitting call" and number of physicians, that is up to you. The more physicians there are in the practice, the less call you will have, but the more patients calling during each call day/night. We started with just us two and although a breast onc practice does not have a lot of "have to go to the hospital" type of call, the patients are needy so there can be a lot of calls. Now we have 6 partners and we split the call on weekends and holidays, with each individual surgeon covering their own office during the week. It works well for us but the weekends on call are certainly busier than it used to be with just the 2.

The true solo practice is difficult. My best friend is in a solo Plastics PP and she never has any time off, refuses to ask anyone to cover for her except when she goes to conferences (and then she still takes the calls) and is constantly busy.

 

[balaguru]

Your state medical association may be able to help. One of my buddies is using the consulting services offered by the TMA (Texas) to start his own practice. Fees are on the order of $10k. They also publish a book on the subject which I plan to order for my own use.

 

[Postictal Raiden]

In terms of "splitting call" and number of physicians, that is up to you. The more physicians there are in the practice, the less call you will have, but the more patients calling during each call day/night. We started with just us two and although a breast onc practice does not have a lot of "have to go to the hospital" type of call, the patients are needy so there can be a lot of calls. Now we have 6 partners and we split the call on weekends and holidays, with each individual surgeon covering their own office during the week. It works well for us but the weekends on call are certainly busier than it used to be with just the 2.

The true solo practice is difficult. My best friend is in a solo Plastics PP and she never has any time off, refuses to ask anyone to cover for her except when she goes to conferences (and then she still takes the calls) and is constantly busy.

How does call coverage work? Does each partner cover a whole week at a time? Or is each partner responsible for one night of the week and then everyone rotates for weekend coverage?

Thanks

 

[Winged Scapula]

How does call coverage work? Does each partner cover a whole week at a time? Or is each partner responsible for one night of the week and then everyone rotates for weekend coverage?

Thanks

We have 4 offices. So 2 of us cover the west side and north valley offices M-F, switching on a weekly basis; 2 other partners cover the central office and 2 others cover the east valley. Each of these locations corresponds to the main practice locale for each partner so calls will be mainly from ones own patients.

On Friday/holidays. the call is rotated between the 6 of us for the weekend, taking call for all 4 offices. We trade off holidays on a yearly basis (last year I was off for Thanksgiving, Xmas and New Years, so I'll be on this year and offMemorial Day, July 4th and Labor Day).

 

[bulldogmed]

This is a complicated topic and is bound to change over the years. GSResident has catalogued his experience at opening a Plastic Surgery practice and I find that a lot of the information is relevant to any private practice: http://forums.studentdoctor.net/threads/first-2-weeks-in-practice.542695/

What my partner did was to develop a marketing plan which showed the lack of coverage in our specialty in town, the training that she had that no one else in town at that time had, and she shopped it to local hospitals for assistance. She did not have a rich uncle or anyone to help her with start-up costs; one of the local hospitals provided it to her, much as you would a salary guarantee. However, by way of full disclosure, she did have a husband who had a good salary working for Intel to help her through those first few lean months.

Surgical practices tend not to have a lot of overhead; most of it will be spent on employees or any capital expenses (if you have equipment like an ultrasound in your office) and your EMR. You aren't going to be stocking medication, vaccines, EKG machines, etc. that an FP would.

In terms of "splitting call" and number of physicians, that is up to you. The more physicians there are in the practice, the less call you will have, but the more patients calling during each call day/night. We started with just us two and although a breast onc practice does not have a lot of "have to go to the hospital" type of call, the patients are needy so there can be a lot of calls. Now we have 6 partners and we split the call on weekends and holidays, with each individual surgeon covering their own office during the week. It works well for us but the weekends on call are certainly busier than it used to be with just the 2.

The true solo practice is difficult. My best friend is in a solo Plastics PP and she never has any time off, refuses to ask anyone to cover for her except when she goes to conferences (and then she still takes the calls) and is constantly busy.

Thanks, WS for your reply. I read through that forum, and it seems that GSResident stopped updating it quite a while ago, but it was a very interesting read nonetheless. I've got many years before I would be thinking about starting my own practice (M2 + military time), so I know that the healthcare landscape can change dramatically, especially with different political parties potentially coming into office.

Is there time during residency to have an elective or two for practice management? I know you can do that kind of thing in FM and probably the other PC specialties.

 

[Winged Scapula]

Thanks, WS for your reply. I read through that forum, and it seems that GSResident stopped updating it quite a while ago, but it was a very interesting read nonetheless. I've got many years before I would be thinking about starting my own practice (M2 + military time), so I know that the healthcare landscape can change dramatically, especially with different political parties potentially coming into office.

Is there time during residency to have an elective or two for practice management? I know you can do that kind of thing in FM and probably the other PC specialties.

Yes, its too bad its been awhile since he's updated the thread, but there is still some valuable information contained within as you note.

Surgical residencies don't have a lot of elective time built in, and almost all that is allowed is during the junior years. Since GS is not as PP oriented as FM, I'm not aware of any widespread elective in "surgical practice management" but that is rather meaningless as I would imagine that it does/could exist somewhere, or you could create it. I know that at ACS does have courses/seminars in practice management which you might find useful (when the time comes).

 

[bulldogmed]

Yes, its too bad its been awhile since he's updated the thread, but there is still some valuable information contained within as you note.

Surgical residencies don't have a lot of elective time built in, and almost all that is allowed is during the junior years. Since GS is not as PP oriented as FM, I'm not aware of any widespread elective in "surgical practice management" but that is rather meaningless as I would imagine that it does/could exist somewhere, or you could create it. I know that at ACS does have courses/seminars in practice management which you might find useful (when the time comes).

I would be interested in that when the time comes.

If you were to buy out someone's practice as they retire, what's an appropriate figure for that? Are we talking 6 figures, 7 figures?

 

[Winged Scapula]

I would be interested in that when the time comes.

If you were to buy out someone's practice as they retire, what's an appropriate figure for that? Are we talking 6 figures, 7 figures?

LOL…only if you're getting ripped off! In most cases, practices have very little real value. You cannot put a price on the patients, so most of the cost of "buying in/buying out" a practice are related to equipment, furnishings etc. Some will try and charge you for "goodwill" although this is rapidly becoming a thing of the past.

My partner and I each had the practice valued by independent sources: hers came in at about $15K more than my guy did (her guy tried to charge me for the furniture at the cost to replace - what you do for tax purposes - rather than the actual value of the furniture), so we split the difference and I paid about $30K which covered the cost of the 2 ultrasound machines, all the laptops/desktops, tvs in the waiting room and exam rooms, exam tables, etc. I agreed to pay some "goodwill" as part of that figure, although when I had joined the practice I was told that there would be no goodwill. Things change when you really start talking money.

I have seen practices ask for 6 figures, feeling that they "carried" the new surgeon for X number of months paying them a salary, so they were "owed" it back, when they became a partner. In one case I'm aware of, they either hadn't thought it through or were trying to rip him off, because by the time partnership came up he brought in far in excess of his salary guarantee, which of course they kept, so I'm not really sure they were "out" the $100K they wanted from him. He walked and is much happier.

At any rate, its very complicated and as much as it pains me to say it, you need to protect yourself and have an attorney, accountant and others who can help you figure this out when the time comes. No matter how much you like your colleagues and trust them, misunderstandings (or outright deceit) are common when it comes to money.

 

[bulldogmed]

Okay, that's a lot less than I thought. Thanks for all of the advice. I'll keep that in mind going forward.

 

[Pir8DeacDoc]

It's very common to try and screw the new guy. You haven't realized your full value to the practice and when coming out of training are just thrilled to make 6 figures. So it's common to leave money on the table. Whether intentional or not, money/greed makes people do things they wouldn't normally do. Try and hash out the details before you sign on. Once you are there and established in the community you have a bit less leverage and may be less likely to want to walk away. I've had some buy in issues at my place and am grateful my original contract has details about that in there. But ultimately I'm willing to walk away, which also maintains my leverage. The business side of things can suck sometimes but I like controlling my destiny and not having a hospital overlord.

 

[bulldogmed]

It's very common to try and screw the new guy. You haven't realized your full value to the practice and when coming out of training are just thrilled to make 6 figures. So it's common to leave money on the table. Whether intentional or not, money/greed makes people do things they wouldn't normally do. Try and hash out the details before you sign on. Once you are there and established in the community you have a bit less leverage and may be less likely to want to walk away. I've had some buy in issues at my place and am grateful my original contract has details about that in there. But ultimately I'm willing to walk away, which also maintains my leverage. The business side of things can suck sometimes but I like controlling my destiny and not having a hospital overlord.

When you buy into a practice, how much autonomy do you have? I suppose it's very practice dependent, but I'm guessing that you have to answer in some form to your other partners in terms of productivity. Is there a head/senior partner that has a say-so over everyone?

 

[DoctwoB]

When you buy into a practice, how much autonomy do you have? I suppose it's very practice dependent, but I'm guessing that you have to answer in some form to your other partners in terms of productivity. Is there a head/senior partner that has a say-so over everyone?

100% dependent on the individual practice. If your partnership is an "eat-what-kill" type model where you take home what you earn minus your share of expenses then your partners couldn't care less about your productivity. If all funds are distributed from a shared pot then they absolutely will care. Also if your lack of productivity means a shared capital resource (e.g. surgicenter time, imaging services, etc.) is underutilized then this will affect your partners who will likely give you flack over it.

With regards to authority/decision making, once again there's a million ways to structure a practice. You may have a full vote as a new partner, you may have a partial vote, or you may be only a partner from a finances perspective but not from a practice directing standpoint. Large practices with multiple partners may have different "levels"of partnership. How your partnership could be terminated and how you are recompensed for your share of the practice also needs to be spelled out in your contract.

The point is read (or better yet, have your lawyer read) your contract very carefully

 

[Pir8DeacDoc]

well said above. If your lack of making money doesn't change my ability to make money, then I probably don't care. If you being slow and not wanting to do anything changes my bottom line, then I could be pissed.

 

[bulldogmed]

100% dependent on the individual practice. If your partnership is an "eat-what-kill" type model where you take home what you earn minus your share of expenses then your partners couldn't care less about your productivity. If all funds are distributed from a shared pot then they absolutely will care. Also if your lack of productivity means a shared capital resource (e.g. surgicenter time, imaging services, etc.) is underutilized then this will affect your partners who will likely give you flack over it.

With regards to authority/decision making, once again there's a million ways to structure a practice. You may have a full vote as a new partner, you may have a partial vote, or you may be only a partner from a finances perspective but not from a practice directing standpoint. Large practices with multiple partners may have different "levels"of partnership. How your partnership could be terminated and how you are recompensed for your share of the practice also needs to be spelled out in your contract.

The point is read (or better yet, have your lawyer read) your contract very carefully

well said above. If your lack of making money doesn't change my ability to make money, then I probably don't care. If you being slow and not wanting to do anything changes my bottom line, then I could be pissed.

Thanks for your input. These are some great thoughts to keep in mind as I continue in my education.