AMA News Wire
What I wish I knew in residency about private practice
Apr 24, 2024
Many doctors completing residency these days are confronted by a daunting perception: Physician private practice is for the birds. They hear it from their attendings, their administrators and maybe even their peers. But this perception is not accurate. Yes, an increasing proportion of physicians are going the employment route, but private practice remains a financially viable option and can be the answer to some of the most pressing problems in the medical profession.
AMA member Daniel E. Choi, MD, knows this firsthand. A board-certified orthopaedic spine surgeon, he joined a group practice immediately after his fellowship and just a couple of years later decided to hang his own shingle. Now he’s practicing medicine the way he always dreamed he would, as the owner of Spine Medicine and Surgery of Long Island, in New York. He makes his own schedule, he doesn’t hassle with insurance contracts, and he isn’t burned out.
“Private practice is facing challenges as the health care system becomes more consolidated,” Dr. Choi said. “But as residents shadow me and I describe my practice operations and what we've been doing to stay viable, it's very clear to them that private practice is not dead at all. It could actually be a better fit than the majority of job options that are available to them.”
In an interview with the AMA, Dr. Choi laid out what he wished he knew about private practice when he was still a resident.
At the top of that list: Physician private practice can be more rewarding.
It gives you day-to-day control
“There are clear pros and cons to private practice,” Dr. Choi said, noting that one of the big draws to employment settings is the lack of administrative burden.
“It's typically a 9-to-5 job with very predictable call schedules that you share with your colleagues,” he said. “You get to focus on practicing medicine. If the roof leaks, if the toilet gets clogged, if the Wi-Fi goes down—none of that is your problem. For some physicians, that's all they want, and I think there is a big place for that in our medical community.”
The downside of that simplicity, however, is lack of autonomy.
“You lose control over how the system is designed, how efficiently care is delivered and how much things like documentation burden you. All of them are determined by someone else,” he said.
In private practice, you have that control.
“Being able to change something because you know it's going to be good for patients is so valuable,” he said.
Private practice can prevent burnout
While day-to-day control might sound like a luxury to some young physicians, Dr. Choi thinks it’s an essential part of the job.
“Unfortunately, corporations and private equity have taken over a huge share of the health care system, and they are usually driven by one motive—to maximize profit—so physicians end up being treated like cogs in a machine and measured entirely by profitability and productivity metrics. I think that’s the singular driving force behind burnout,” he said. “Don't get me wrong ... we need to service our student loans, and we have mortgages to pay. But the Hippocratic Oath says, ‘First, do no harm,’ so we are duty-bound to not let profit be our foremost motive.”
Private practice can be an answer to physician burnout, he said, because it is a patient-centric model that values what physicians bring to the table.
“Most of us chose this profession because we value the patient-physician relationship and we love to help people,” Dr. Choi said. “Hospitals are important. Nursing care is crucial too. But physicians have the most specialized knowledge in health care, and we understand exactly what patients need. In private practice, if I need to make changes that I think are going to streamline care, I can make those changes tomorrow without having to first go through a corporate entity that is going to ask: Wait, will that affect our profitability?”
It’s not as if working for yourself is stress-free, Dr. Choi noted. He always wanted to go into private practice, but he wasn’t always sure he would be able to pull it off, as his training did little to prepare him for the business of health care. Still, he was well aware of the perceived inevitability of burnout among physicians, and he was determined to avoid it.
“I wish I could go back in time and reassure myself that everything was going to be OK,” he said. “Those first 18 months were rough. In fact, there was nothing easy about it, and this remains a very tough path. But I hear about doctors and other health professionals complaining of burnout and I think: I’m not burned out at all. I'm the furthest thing from burned out. I’m thriving and my patients are happy. My practice’s employees are happy too, and I think we are all excited about the next day and what we're going to accomplish.”
It negates the need for side gigs
“I keep hearing on social media that medicine is a sinking ship and so many doctors are trying to get off of it,” Dr. Choi said. “But before they can do that, they have to pay off their student loans, and there is this assumption that the fastest way to do it is to earn your salary as an employed physician and then make additional income from some type of side gig, such as investing in real estate or Bitcoin or the stock market.”
He wishes young physicians would instead appreciate just how scarce their expertise is and learn to leverage it.
“Your most monetizable skill is the one you already have,” he noted.
Instead of trying to work overtime for a hospital, however, doctors should consider looking to private practice to help them pay off their student loans, Dr. Choi said.
“If you dive deeper into your own vertical of physician expertise, you can maximize your earning potential,” he said, noting that this includes being creative about how you get paid. His practice accepts insurance, but similar to a self-pay model, it is out of network, meaning “we price our services independent of what the government sets for us. That’s how any healthy market works, and small-business ownership allows you to do that.
“That’s what I wish more residents would understand—that if you really are worried about your financial situation, leveraging the skill set that you worked so hard to develop for eight or more years is the answer,” Dr. Choi added. “And there are lots of other advantages that come with starting your own business, such as tax benefits that come with being a business owner.”
There’s no shortage of help
Doctors looking to enter private practice for the first time—or to reenter it after years as employed physicians—might be apprehensive to take on the risk, and this is normal, Dr. Choi said. Fortunately, business resources abound.
“Private practice doctors these days are definitely willing to mentor younger physicians on how to start their own practice,” he said. “When I started my practice, I spoke to at least 10 other solo practice physicians that I had befriended either at AMA meetings or through social media. They said it was really hard to do what they did, but they wouldn't have had it any other way. And each of them shared their own techniques for getting where they got. I was able to take the best from each of those conversations.”
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In those days, that included a web-based service for developing business plans. But today, with AI services such as ChatGPT, “you can generate a business plan for any kind of private practice in just a few minutes. So, there are a lot of ways you can use technology to fill in your knowledge gaps,” he said.
Dr. Choi also recommends tapping into the AMA Private Practice Physicians Section, for which he is alternate delegate. The section works to preserve the freedom, independence and integrity of private practice.
And while he noted that there is no single website or book that will tell you everything you need to know about private practice, he recommends reading Suddenly Solo Enhanced: 12 Steps to Achieving Your Own Totally Independent Health Care Practice, by Richard A. Schoor, MD, a urologist in private practice in New York.
“If you are going to do this, it does have to be thought out. I don't think you should just jump into it. It takes preparation and understanding what you're going to spend money on and what your revenue sources are going to be,” Dr. Choi said. “That's what the business plan is for—so you can take a calculated risk. I took about six months to plan before I went on my own, and I think that was critical to my success.”
It takes astute clinical judgment as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.
Hire a lawyer early on
Of course, not all physicians completing residency or fellowship will be prepared to go into private practice immediately, so they should approach their employment contracts with an eye on keeping their options open, Dr. Choi said.
“I would highly recommend every resident and fellow obtain legal counsel and hire an attorney to review their contract,” he said. “Tell the attorney what your potential goal might be—that you may want to explore private practice down the line when you have more experience.”
An attorney should be able to negotiate terms for the restrictive covenant, also known as the noncompete, which prohibits a resigning physician from practicing within a certain geographic area for a specified length of time.
“I have to say, however, that that’s pretty difficult from what I've heard, especially if the corporate entity has a lot of market share in a given geographical location. It could be the biggest employer of physicians in an area and be unwilling to negotiate,” Dr. Choi said. “The restrictive covenant is one of the biggest potential barriers for physicians to leave their employers and pursue other options, so I would look very carefully at that.”
The AMA Physicians’ Guide to Hospital Employment Contracts (PDF), free for AMA members, provides expert guidance to physicians contemplating, entering into or working under employment contracts with hospitals or related entities.
At the 2023 AMA Annual Meeting, the House of Delegates adopted policy backing efforts to ban many physician noncompete provisions.
