Weigh all your options before leaving a practice

Practice Pointers. By Karen S. Schechter, AMNews contributor. July 19, 2004.

PRACTICE POINTERS

Answers to questions about the business side of your practice

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Question: I have been employed at a 10-physician hospital practice for five years, and now I am thinking about going into private practice. My options are to start my own practice, find a partner to start a practice with me or join an existing practice. Can you provide any guidance as to how I can make the best decision?

Answer: The first questions that need to be answered are: Why are you leaving this situation and what are your goals for the future? Once you have determined why you want to move on, the next step is to evaluate the pros and cons of each option.

A solo practice provides a physician with the most possible autonomy of the three practice alternatives. But there are costs associated with a solo practice -- financial and otherwise. The most obvious is that the physician is responsible for all startup costs and operational expenses. It will be imperative that the physician has the means to pay for startup and three to six months of operating expenses until cash flow is consistent.

Solo practices tend to be more vulnerable in the market -- particularly with negotiating an appropriate fee schedule with managed care companies. There is also the possibility of a hospital opening a group practice with the same specialty in close proximity to your office. This could threaten your ability to maintain good patients and staff, because the hospital group practices typically can offer more services to the patients, and better salaries and benefits to employees.