Employed vs. Private Physician

September 30, 2011

More physicians are opting for employment over the partnership track, hoping to avoid the headaches and hassles of owning a business. But is that that the right choice for you?

More physicians are embracing careers as employees rather than within independent practices as they wait out changes in government reform and reimbursement models.

In fact, however, both routes paths carry both risk and reward. Whichever you choose, your chances for career success may depend more on you than outside factors.

By eighth grade, Christopher Hofelich knew he wanted to be a physician.

That early planning continued throughout his young adulthood, and by the time he began a fellowship in interventional cardiology, he was eager to lock down the practice model he would pursue after his training was finally complete.

"As soon as I got the fellowship I started my job search," he says. "I wanted to know where we were going."

Hofelich and his wife drew a 300-mile circle around Louisville, Ky., where they had family, and began considering the types of practices available within that area.

Ultimately, Hofelich settled on hospital employment in Dayton, Ohio, the same city he was completing his fellowship.

Hearing stories of small group practices that purchased costly "brick and mortar" diagnostic equipment, only to have reimbursements crumble, convinced him to focus on the employment route.

"It seemed like [employed physicians] were working less and making more," he says.

Driving the trend

The employed career path has, indeed, gained tremendous speed in the wake of health reform and increased focus on accountable care organizations.

In a survey on physician hiring taken last year, the Medical Group Management Association (MGMA) found that more than 65 percent of established physicians and 49 percent of physicians coming out of training were placed in hospital-owned practices.

Higher starting salaries in hospital practices drove the trend, according to MGMA.

"Physicians are moving to hospital-owned practices for a number of reasons," president of B.E.L. & Associates, Inc., and survey advisory committee member Brenda Lewis said in a statement announcing the findings. "There is uncertainty of reimbursement for the future. Physicians are looking to sustain income to pay office overhead and have a paycheck to take home, and those with large Medicare populations are more likely to want to move to hospital-employed positions."

Jennifer Snider, network executive for the Halley Consulting Group in Dublin, Ohio, near Columbus, agrees that the political and economic landscape is a huge driver of the trend toward employment.

"There's a huge migration to the employment model as more private practices are looking to hospitals to affiliate with," she says. "Health reform is one reason. The government seems to be encouraging the accountable care organization model."

New physicians are also coming out of training with significant debt and training programs typically don't provide much business education, Snider says. Coupled with younger doctors' desires for more controllable schedules, all the trends are pointing toward employment.

Of course, employment has drawbacks - and plenty of detractors within the medical profession.

Sanford Brown, a California-based family practitioner, fears that physicians will lose not only compensation when financial pressures hit hospitals and other employers, but also their ability to practice the way they intended when they went through training.

"To give up your autonomy and ability to practice … is the easy way out," he says. "You'll get your vacation and benefits, but you don't realize that in three years when the contract is up you could be blackballed."

Snider says concerns about future salaries in the employment route, like Brown's, are indeed justified. "Hospitals are trying not to repeat the mistakes of the 1990s, when there were high guarantees and no ties to productivity," she says. "That model wasn't sustainable."

Still, Brown says he believes the solo practice model is all but dead. Others say it stands a chance - for the right type of practitioner.

Entrepreneurial spirit

Physicians coming out of training today are well aware of the threats to income that doctors face, says Roland Goertz, a family physician in Waco, Texas, and president of the American Academy of Family Physicians. He believes this knowledge weeds out a lot of players who entered the field predominantly for monetary reasons, and says he sees more altruistic students entering the field today.

"Solo and private practice is still viable, but you have to have that entrepreneurial, almost renaissance spirit to make it work," Goertz says. "And where you were once able to get out on your own and make some early mistakes, today you can't play games," meaning patients expect the latest technology and office management from independent physicians as those within larger healthcare settings.

Solo practitioners also need to be business savvy, something many aren't taught in medical school. In defense of medical-school curricula, Goertz says many educators believe the business side of the field can be learned later if physicians pursue more entrepreneurial settings, and that there are so many other, more crucial concepts, to be mastered during training.

"The mentality is that we don't have time to have physicians [in training] worry about practice management, but the reality is you need to learn the business side while you are learning the medicine side," says Goertz, who has a graduate business degree.

Concierge model

The business side of medicine is something family practitioner Charles Whitney is becoming more acquainted with. After seven years as an Air Force physician and six years in the University of Pennsylvania Health System, Whitney established his own concierge-medicine practice in 2003. His patients pay $2,000 ($3,600 per couple) annually for his services, but maintain their health insurance for tests, hospitalization, and other non-physician related services.

Today, his Revolutionary Health Services practice in Washington Crossing, Pa., has allowed him to work, volunteer, and be active in the lives of his four children, he says. He is a team doctor for a local high school and a volunteer coach for his children's sports teams.

Whitney also partners with a local dentist to offer a non-invasive screening procedure that evaluates soft plaque as a warning sign for cardiovascular disease - an entrepreneurial venture he says he never would have come up with if he was bogged down in a traditional private practice or in a hospital setting with restrictions on clinic activities.

"I recaptured my love for medicine when I did this," Whitney says of his decision to go the concierge route.

The idea of a concierge practice actually began as part of his work with the university system. When the university decided not to pursue the model, Whitney took it on himself because he felt it would give him more time with his patients and his family because he wouldn't have to deal with the administrative aspects of working with insurance companies.

A friend who is a business coach helped him establish his organization, and today the practice is thriving, he says.

"I've found that the more open access my patients have to me, the less often they tend to call," he says. "I've even had to scold some patients who waited over the weekend because they didn't want to bother me."

Though Whitney and Hofelich are in different areas of medicine and practice in completely different business models, both said family considerations were key in forging their career paths.

"I turned down a job that would have paid about $100,000 more but it was in Indiana," Hofelich said, because it was too far from his extended family.

Often, those family considerations lend themselves more to the employment model, (as they did with Hofelich) because it allows for more time off and set work hours, Snider says.

Academia

What about academic medicine?

With its prestige, protected time for research pursuits, and steady if lower salaries, the field is still attracting young physicians - at least for now.

In July, Curtis Weiss completed a fellowship in pulmonary/critical care at Northwestern University.

"I really enjoy the academic atmosphere and it's great to have about 75 percent protected time," says Weiss.

Still, he's not necessarily wedded to academics for life.{C}

"I graduated with about $100,000 in debt, and every now and then I think about the fact that I'll be paying that back until I'm in my '50s," he says. "And if for some reason I were to lose my research funding, it would be difficult to stay in academics."

Private practice, to this physician, would mean a more demanding clinical schedule, but also the allure of better pay and benefits.

Evaluating each practice opportunity's positives and negatives and staying open to switching models is essential to finding the right fit for you as your career progresses, Snider says.

If you decide you'd rather have the ease and predictability of employment, for example, you still need to keep an eye on productivity, she says.

"Employed physicians still need to consider how their productivity is being measured. Is the base salary a true guarantee or can it vary?"

Other questions to consider, Snider says, include how the practice is governed within the hospital or larger corporate owner.

"Who runs the day-to-day operations? How much autonomy is at the practice level? If your medical assistant isn't working out, how can you replace him? Do individuals earn RVUs alone or are they spread across a group?"

Also, whether considering an offer from a hospital or a large independent group, think about its location and whether your skill set is in demand there, she says. Eventually the business has to be there, whether you are building the practice alone or with hundreds of other providers.

If you do choose the employment route, think frankly about your own strategy if your employer suddenly pulls the plug.

"Look for organizations that engage their physicians as partners and have a transparent administration," Snider says. "It's a rare physician these days who wants to go it alone. You do occasionally see financial firms extend lines of credit to physicians in private practice, but it's more and more rare."{C}

In Summary

In response to increasing financial pressures and health reform changes, more physicians are considering an "employed" practice model. However, before you sign on the dotted line, consider whether other practice models would be a better fit. Here are some things to think about:

• If you are considering solo practice, first make sure you have the proper training in practice management and health information technology

• If choosing to work as an employee, you may give up financial stability and practice autonomy

• Practicing concierge medicine may give you more time to pursue other interests and more family time

Janet Kidd Stewart is a freelance writer based in Marshfield, Wis. She holds a bachelor's degree and master's degree from the Medill School of Journalism at Northwestern University. She can be reached at editor@physicianspractice.com.

This article originally appeared in the October 2011 issue of Physicians Practice.