While starting a private practice is an uphill battle for young physicians in 2023, many experts believe that it is still a viable, and even favorable, option for many with the right drive and mindset.
Question: Do you think that it is feasible for new young physicians to begin private practices in 2023, given the current healthcare and economic climate?
Taylor Cera. Chief Operating Officer of The Orthopaedic Surgery Center (Youngstown, Ohio): I know that it is feasible. There are many practices that have proven this model to be successful in the current climate. I'll pause and put an asterisk here — it requires the right leadership and the right young physician with an entrepreneurial mindset. But it's more than that. It's a collective group of like-minded physicians creating their own freedom. A system or model that drives efficiencies and creates freedom that also offers multiple revenue streams for physicians is an attractive model. This model will attract young physicians that aspire to have their freedom. Beyond the freedom, which may be the most important characteristic, having the opportunity to invest in multiple revenue streams such as ancillary income, real estate, and ambulatory surgery centers, sets a so-called unlimited ceiling for financial success.
As ASCs become more of a major player in the space, independent physicians' opportunity to have a majority stake in ASCs offer a game-changing strategy for independent success. I do believe there is an apparent dark side to this option for young physicians. In this model, there must be a willingness to work extremely hard. Due to the current healthcare and economic climate, inability to produce at a high level will cause physicians to struggle financially.
Rising administrative burdens, decreased payment rates and less negotiating power are a cause for concern to private practice. Private practice offers a solution to clinical and business complications that arise. The solution is the ability for physicians to make their own informed decisions. They can directly improve access to care and reinvest and enhance their own clinical platforms. There are undoubtedly physician-led enterprises that offer models of success without sacrificing autonomy and freedom.
Thomas Loftus, MD. Surgeon at Austin (Texas) Neurosurgical Institute: I do think it is feasible for new young physicians to begin private practice in 2023, but the headwinds continue to grow every year. It is increasingly difficult to negotiate fair contract pricing with insurance companies, and the delay tactics they employ in providing contracts make the first two years in practice particularly grueling. Hospitals tend to offer little assistance anymore since they prefer to employ physicians in order to control their referral patterns. So, starting a new practice requires more conventional lending from banks, which are not always with favorable terms. The legal minefields continue to grow in every aspect of healthcare delivery from licensing, prescribing, federal and state regulations, and Stark Laws further adding to the legal costs of simply maintaining compliance in running a practice.
All of that being said — and that is still an incomplete list of the challenges of private practice — the reward of having some semblance of independence from the often suffocating effect of hospital or large group practice employment is quite significant. For the independent-minded and business-savvy individual, the opportunity to begin and grow a practice still exists and can be very rewarding.
Thomas Schuler, MD. Spine surgeon, Founder and CEO at Virginia Spine Institute (Reston): There is always an opportunity for excellence. To be successful in a competitive market, a physician must focus on customer service; true personalized service. Great customer care is rare in medicine currently. Market forces and demands on physician time are extremely detrimental to physicians giving patients what they desire — compassion, empathy and quality medical care. For a physician who can communicate with patients in their language, while providing excellent quality medical care, the future is bright and there will always be opportunity.
The government, institutional employers and insurers want to treat physicians as a commodity with all providers being freely interchangeable. Success in private practice requires fighting this treatment and building a clientele that values and appreciates the excellence of true customer service in healthcare. With this approach and ability, anyone can thrive in a private practice model.
Lali Sekhon, MD. Surgeon at Reno (Nev.) Orthopedic Center: I've been in both private practice and academics. If you are driven, ambitious and eager, nothing beats private practice from a clinical perspective. You are responsible for your patients in an intimate way. You do the surgeries. You become a part of your community. You make or break your own reputation, not relying on the institution's name. You have the opportunity to acquire business skills like marketing, recruiting and HR. You will excel at profit and loss. You all learn which insurances pay well and which suck. My suggestion — get into a group. The bigger the better. Ancillaries are the key as reimbursement goes down for our procedures. Avoid practices that have sold out to private equity. Relish in the fact that your 'boss' is also your colleague, not an anonymous hospital executive who will fire you should you question the renegotiated contract. Enjoy the ride!
John Stewart. CEO and Founder of Total Spine & Wellness (Melbourne, Fla.): It's becoming increasingly difficult for any physician, regardless of age, to open up their own practice. Combine that with being young and/or new, and the prospect of failure rises precipitously. All private practices are facing declining reimbursements from Medicare and commercial insurers and there appears to be no end in sight. New young private practice physicians are hurting the most because they do not have the leverage that existing multi-physician offices or health systems have when trying to go in-network and negotiate attractive contracts. Insurance companies have a "take it or leave it" approach when contracting new physicians, and their boilerplate contracts in the marketplace reimburse less than Medicare.
This forces a new young private practice physician to go out of network and spend more in marketing their practice and hiring and training authorization/billing/appeals specialists. It's an unfortunate dilemma that all private practice owners and physicians experience on a daily basis. Insurance companies have slowly crushed the entrepreneurial spirit of most private practice physicians both new and old.