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Would Solo Practice Be Right For You?

Would Solo Practice Be Right For You

September 16, 2015

There are still opportunities for soloists. But not every doctor has the temperament to go it alone.

Only five years ago, it was received wisdom that capitated managed care would be embraced by the entire country, sounding the death knell of the solo practitioner. With HMOs favoring large multispecailty groups and IPAs, the little guys would be kaput – or so the pundits predicted.

As the Medical Economics Continuing Survey makes clear, the bell hasn’t tolled for soloists. (See page 134.) Why not? The spread of commercial capitated managed care has stalled; today, it covers only a fraction of the patients once predicted for it. Even in a highly penetrated market like Minneapolis, payers are welcoming soloists and small single-specialty groups, hoping they’ll inject needed competition into the still-too-expensive health-care marketplace.

As for the supposed inability of soloists and doctors in small groups to compete profitably, consider this: MedPartners – the nation’s largest physician practice management company – lost $151 million a couple of years ago on its PPM division and announced it’s leaving the business.

Now that solo practice and professional suicide are no longer synonyms, and since most doctors fantasize about being their own bosses, let’s talk turkey: Is being a soloist a serious option for you? To find out, answer the following two questions:

  • Do you like working alone?
  • Can you afford to set up a solo practice?

Good candidates for solo practice tend to be independent and entrepreneurial. They want to be in control, and they enjoy the business side of running a practice. High ideals or personality quirks may give them trouble fitting into a group environment. Being straight with yourself about your emotional needs is your best assurance that going solo will be a smart move.

That soul-searching should include a realistic assessment of your ability to practice medicine in a communications vacuum. Soloists, by definition, have no other doctors to talk to regularly. Telemedicine and secure Internet chat rooms where physicians can get input from colleagues are still in their infancy. And let’s face it, no matter how advanced communications technology gets, nothing will replace the emotional gratification of face-to-face contact.

Being an old-fashioned sort of doctor also means an old-fashioned-doctor’s lifestyle: constant call and the hassle of finding someone to cover for you when you need a vacation or get sick. You’ll spend more of your life with patients, less with your family, and if you’re like many soloists we know, you’ll spend much of your free time trying to catch up on sleep. Dedication isn’t all that’s required for this to be a rewarding life. It also takes a spouse and children who can cope with your frequent absence.

Nor is small beautiful if money is a priority. Median net income for soloists is lower for physicians in groups.

For most doctors, the startup costs of a solo practice – about $200,000 – are too steep to fund out of pocket. Even if you’re a seasoned Kaiser Permanente doctor looking to hang out your shingle as a soloist, don’t count on a bank’s help. And if you’re a resident who’s striking out on his own, and still carrying hefty loans for your medical education, a bank is even less likely to offer you a hand financially.

For doctors who weren’t born rich, that leaves two options: You can join a small single-specialty group where you’ll still maintain a good deal of independence, or you can start (or, better yet, step into) a hospital-sponsored solo practice. This obligates you to accept certain services from the hospital, such as using its vendors. But you’re not an employee – you’re still your own boss. In exchange, the hospital offers inducements that may include most operating expenses, an income guarantee, a good deal on a house, and full range of employee benefits, from malpractice coverage to paid vacation time. Then, when the contract is up – generally in two years – you’re on your own.

Hospitals like this arrangement: It grooms doctors to feed them patients without the hassles – and financial loss – of managing the doctor’s practices. And for many doctors, it’s the only way a solo practice is financially feasible.

Five years ago, pundits were saying that only remote places would be fertile soil for soloists. They’re not saying that now. Our firm currently has hospital-sponsored, primary-care practices for soloists in Atlanta; Springfield, MA; and Tulsa, OK, among other places. We also have an internal medicine partnership slot to fill in a small single-specialty group in Ft. Myers, FL.

True, a few highly consolidated and managed markets – like San Diego, Los Angeles, and Portland, OR – are probably not promising areas for soloists. But that leaves a heck of a lot of country to practice in – if being your own boss still sounds like a smart move.

This article was published by Cejka Search and originally appeared in Medical Economics Magazine. Copyright by Medical Economics Company Inc. at Montvale, NJ 07645. All rights reserved.