Which is the preferred type of medical practice ownership in the US? According to a 2018 AMA Physician Practice Benchmark Survey, almost 46 percent of U.S. physicians owned a medical practice and 47 percent were employed. It seems there is an almost equal split between self-employed and unemployed physicians in the country.
However, looking at a more extended period of data tells a different story. Practice ownership was 72 percent in 1988 and 58 percent in 1994. That means there has been a steady decline in preference for practice ownership over the last three decades. One reason for the preference for employment by U.S. physicians has been the corporatization of healthcare. Large hospitals have outcompeted local practices on services, technology, and geographical reach.
On the other hand, in recent years, there is discernible support for local businesses. Communities are returning to group and solo medical practices. Compared to an extensive hospital system, local medical practices certainly deliver a more personalized approach to healthcare. Also, affordable web-based patient engagement technologies are enabling medical practices to offer value-based care. These include telemedicine, remote patient monitoring, and patient portals.
So is owning a medical practice an attractive proposition once again? For entrepreneur physicians, practice ownership is a chance to be their own boss, customize patient care, and provide greater healthcare access to (underserved) local communities. The scale of investment, administrative effort, and legal implications in launching a medical practice will depend on the type of medical practice you choose to launch.
Main Types of Medical Practice Ownership
You must evaluate which type of medical practice fulfills your professional and personal goals. If you want to become a medical entrepreneur in the true sense, you have two options – a solo practice or a group practice.
Solo or Private Practice
A solo practice means you don’t have any partners or employment affiliations with other medical organizations. A solo medical practice is more likely to have a small staff and a limited patient base. The smaller scale of operation (compared to a group practice) implies complete autonomy in the functioning of the practice. A personalized working relationship with your patients and staff is one of the joys of being a solo practice owner.
On the flip side, the entire responsibility of raising finance, hiring staff, ensuring compliance, and getting legal approvals to launch your practice rests squarely on you. You must simultaneously wear your physician and business head hats and assume all the risks that come with a new enterprise launch. Be ready to clock in long hours before the launch of your medical practice and in the first couple of years.
If you still have a sizeable educational debt, you may want to consider joining an existing group practice before starting your solo practice. Suburban and rural areas are better suited to start a solo practice. Also, check with local hospitals for a possible affiliate agreement to support their patient base via your solo practice.
Group practices can be single-specialty and multispecialty practices. If you are looking for a relatively less stressful experience in starting a medical practice, consider a group practice.
In comparison to a solo practice, a group practice would involve a lesser commitment of time, effort, and money. The more extensive combined patient base means it’s easier to obtain finance and manage the associated risks. The practice launch tasks (and thereafter the practice management responsibilities) can be delegated between the physician partners. Joining a group practice is a more attractive proposition for medical staff, and so you get a better pick of the available talent when hiring.
Post-launch, you will have other physicians to share in the burden of working on holidays, weekends, and late-night shifts. But the main drawback, in comparison to a solo practice, is that in a group practice, you must relinquish some degree of control. Business decisions require a consensus, and that opens the door to conflicts. Over time, larger practices tend to become bureaucratic and policy-driven, which may chip away at the joy of medical entrepreneurship.
If you are interested in urgent care, a hospital-owned business may be right for you. You work either as a medical consultant on a hospital’s premises or in a hospital-owned medical practice.
You enjoy the perks of regular work hours, a vast administrative support system, access to medical technology, and the safety of assured income. There is undoubtedly lesser freedom in decision-making than group practice or solo practice ownership. Additionally, you may be expected to contribute to the overall functioning of the hospital by serving on committees or participating in other organizational activities.
Federally Qualified Health Centers (FQHC)
You can start a medical practice within an FQHC that aims to provide primary care services in underserved areas. The launch experience will be like the hospital-owned route. But with FQHC you face other stringent requirements, such as providing care on a sliding fee scale based on ability to pay. (Here’s some more information from the Rural Health Information Hub).
If you are looking to start your own medical practice, we would love to help you with credentialing, EHR selection and implementation, and medical coding and billing. Also, as a revenue cycle management company that’s been working with US providers for nearly two decades, we understand the common challenges faced by medical practice owners. So let’s talk.