At some point in their careers, most providers face the decision of starting their own practice or working as an employed physician in a group or hospital setting.
Private practice has long been an attractive option for many physicians. It generally allows for higher earning potential, autonomy in staffing and managing the business, and control over how patients are seen and treated. Private practice physicians can also decide which insurance carriers to work with, which computer systems to use, and the location of the office.
Running a private practice, however, doesn’t come cheap. The infographic below, based on a typical opthamology practice, shows just how much a provider can expect to spend each year on his or her practice. Here are a few of the highest costs:
- Employee expense: $565,024
- Office occupancy: $150,505
- Office supplies:$69,464
It’s not surprising that a growing number of physicians are forgoing private practice opportunities for salaried positions. Many doctors, especially those just starting their career, prefer the stability of an employed arrangement — consistent paychecks, conservative hours and an established patient base. Physicians also cite the following reasons for shying away from private practice:
- Business costs and expenses
- Prevalence of managed care
- Maintaining/managing staff