In 2000, more than one-half of the nation’s physicians worked in solo practice — a number likely to fall to around one-third this year. The shift is more marked among young doctors: a 2012 survey showed that only one in 100 medical school graduates planned on a solo career.
Starting a solo ophthalmology practice can be intimidating even in the healthiest of economies — especially for young ophthalmologists. In addition to patient care, young practice owners must learn to run a business and master management concepts that were glaringly absent during training.
But while private practice might be daunting, it’s an option ophthalmologists continue to choose. If you have the skills of an entrepreneur and the willingness to devote 100 percent of your time and effort into the investment, solo practice could be for you. This month, YO Info talks with several experts about how to take the leap and practice ophthalmology as a small business person.
Start From the Ground Up
First things first, you’ll need to ask yourself some basic questions. Where do you want to practice: in a hospital campus, medical office facility or a retail building? When do you want to start? What type of practice do you want to have? How will you go about establishing and expanding your practice?
Once you have come to some basic conclusions, it’s time to set up your business entity.
Get your license. First, whether you are starting a solo practice or joining an existing practice, you need to obtain a medical license and a Drug Enforcement Agency number in the state where you plan to practice. This license is a prerequisite for hospital privileges, which are needed to apply to Medicare, Medicaid and other managed care plans.
Many YOs make their first mistake after training by not planning adequately for licensing. Long-time practice consultant Lawrence Geller said he’s seen far too many YOs have to sit on the sideline because they didn’t apply for a license before completing their residency or fellowship.
“Unlike Medicare and Medicaid, managed care credentialing is not retroactive,” said Geller, who has decades of experience helping physicians in solo practice. “A failure to plan ahead can create confusion among referral sources as to what payers the physician participates with, and this will obviously impact your future cash flow.” Geller spoke on contract negotiation during the 2013 YO Program in New Orleans.
Legitimize your business. It’s also important to meet with a business attorney early on in the process to discuss the different types of incorporation (e.g., S corporation, C incorporation, limited liability company). The most suitable option depends on your long-term goals and the type of liability protection that you require. Because incorporation regulations vary widely from state to state, a good attorney should be one of your first contacts to ensure you are on the right side of all legal matters. An accountant can also help you determine the financial pros and cons of each practice type.
Model Yourself After an Entrepreneur
Most physicians will find it easy to establish the legal framework for their fledgling practice. But being a successful business owner takes a certain mind set.
Cornea specialist Stephanie J. Marioneaux, MD, is a long-time solo practitioner based in Chesapeake, Va. She has spent her career combating a common myth — that doctors aren’t good business people. “But doctors can be good business people,” she said, “if they take a step back, put on their thinking cap, and focus on the business issues at hand like they would any medical problem.”
These issues are common to all small businesses:
- Selecting a location;
- Negotiating the office lease;
- Developing a business plan;
- Securing a line of credit;
- Purchasing furniture and equipment;
- Hiring an office manager;
- Setting up a website.
However, because ophthalmologists don’t usually get trained in management, these issues can be jarring if you’re not prepared for them.
Geller said young ophthalmologists should be realistic about their temperament for business. “The process of being in solo practice really starts with knowing whether you have the personality and passion to be an entrepreneur.” Are you energized by the idea of building your own business? What is your risk tolerance? Will you enjoy being involved in the community and developing a patient base? Perhaps most importantly, are you in it for the long haul?
If you can answer those questions in the affirmative, solo practice could be for you. On the upside, the same survey that found decreasing interest in solo practice showed that practice owners do slightly less non-clinical paperwork than employed physicians (11 hours a week on average, vs. almost 13).
Next month, we’ll look at how you cut yourself a paycheck and make a living as an ophthalmologist in solo practice.
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About the author: Mike Mott is a contributing writer for YO Info and a former assistant editor for EyeNet Magazine.