The case for independent medical practices

Welcome to Dr. John Scala's "The Business of Medicine" column — a monthly resource for mastering the business side of independent practice. Having owned 3 solo practices, Dr. Scala offers insights, advice, and actionable strategies to help you steer yours toward lasting success.

For many of us, it probably began early: elementary school or possibly prior. That self-drive and internal pressure to learn and be curious enough about the world to start directing our lives to achieve. Teachers and parents recognized it easily, although as a young child it may not have been self-apparent. Elementary school perhaps was not stimulating enough, so hundreds or thousands of additional hours of reading were often done. 

Middle school allowed an expanded learning experience, but for most future physicians, high school became the time to excel. With the ability to choose the hardest classes and be able to learn with the other education-oriented students, we could finally start to achieve our full potential. Although the traits and discipline of studying, work ethic, and self-directed learning had been built throughout the years, the high school experience really propelled most future physicians towards their goals.  

We were able to choose our undergraduate majors, based on interests and abilities. Self-directed learning and independence enabled many premed students to further realize their potential. 

Then there was medical school, and after that residency. We started our educational journey around 5 years of age, and 25 years later, at 30 years of age, we were finally able to enter the workforce. 25 years (!) of education, training, and effort. As many of you know, this journey took extraordinary dedication and discipline 

And what do the majority of us physicians do after residency? We sign away our independence and autonomy to the big business of medicine. After 25 years of always choosing the more difficult and challenging path, we physicians often choose the easiest way next: employment. Why do the brightest, hardest-working independent thinkers in our society give up their autonomy to work for a big corporation?

I have a couple of ideas about this. In this article, I uncover the reasons why physicians are often drawn to the stability of working for large healthcare systems — but also reveal how owning your own practice might offer a more beneficial way to practice medicine.  

Residency is usually at an academic medical center. Academic leaders have little or no experience with independent medical practices. Except in rare situations, most residents have little exposure to independent practices. There are also fewer of them in general. As the big healthcare organizations have consolidated their power and presence, they’ve bought out many smaller practices to fully own the market.  

It is also much easier to just be employed. You can show up to work, see your patients, and then go home. You might know peripherally about some of the finances, from monthly meetings and the constant nagging of business people asking about increasing your patient volume. Yet, half or more of your generated revenue is paying for layers of management and the big shots in the C-suite. Despite the company always emphasizing that we can practice medicine our way, there are constant reminders and incentives (or disincentives) to send business to this consultant or that x-ray service. 

There is another way, of course. Joining a small private group or starting your own practice is a time-honored way of practicing medicine. In 2001, just 2 years out of residency, I started my own solo practice. I enjoyed it so much that when I moved back to Illinois, I started another solo practice. Now in Colorado, I have started a third (and final) practice.  

What are some of the benefits of self-employment? I think the most important thing is that you own your life. After years of study and diligence, residency, and finally your career, the sense of self-ownership of both your business and your life is one of the most critical ideas. Self-employment also helps you understand the full economy of American medicine. This includes the insurance contracts, billing, the supply chain, how it feels financially to be a patient, and so on. Eventually, the independent physician understands more about the economy of medicine than any corporate employee that only focuses on their respective field.  

Hospitals, x-rays, Home Health, DME, and other medical suppliers compete for the independent physician’s business. My office chooses services and consultants based on outcomes, personalized service, feedback, and other important variables. No one directs the independent doc to use a certain consultant or service.  

Small independent practices provide more cost-effective and efficient care. Without several layers of management to pay, there’s no one pressuring you to refer for more tests, more consultations, and more costly procedures. 

Finally, from a logistical standpoint, you get to choose your own employees. This is crucial, as the big hospital systems see every worker as an interchangeable cog. Doctor leaves? Put in a new one. Medical assistant or nurse performs well? Send them to the neurosurgeon, as she generates more revenue. Give the new grad medical assistant to the primary care doc. The PCP won’t complain: we own him (her) and they are replaceable. 

Your business will have your own employees. By providing a healthy work environment, you can foster employee loyalty. You can help provide for your employees' families, and  set your own hours and take time off for your own family.  

The hardest part about starting your own practice is just making the decision to do so. Once that hurdle is cleared, it’s just a series of steps to make it happen. The whole process is easier than medical school or a board exam. And, you get to start learning new things again.