+ LR-Icons

6 Reasons Doctors Should Consider Private Practice

Published July 06, 2021

Tags:

Financial Insights
Article

The decision to work in a hospital or start your own private practice can be a difficult one. There are pros and cons to each path but interestingly enough, there isn’t a huge difference in income between the two. Thus the best option for you could depend on two main factors: work/life balance and debt/capital ownership. Let’s take a closer look at these factors, and then discuss some of the benefits of working in private practice, and why private practice is still a viable career option.

What makes working at a private practice different than a hospital for doctors?

Working at a private practice is different from working at a hospital in a couple of ways, including:

  • Work/life balance: As an owner of a private practice, you’ll be able to set your own hours and have control over your schedule and the company culture. However, you’ll also be in charge of administrative responsibilities which can take up a large amount of time.
  • Debt/capital ownership: Starting a private practice will require an initial capital investment. If you’re already dealing with refinancing med school debt, the implications of taking on more debt will be an important consideration when deciding which career path is a better fit.

One area where there isn’t a huge discrepancy is income: According to a 2019 study physicians in private practice made an average of $282,000, while physicians in hospital-owned practices made $290,000. However, private practice incomes differ depending on the practice size. For example, solo practitioners made an average of $253,000, Two-physician practices made $280,000, and practices of 3-10 physicians made $282,000. The overall gap in income between physicians who own their own practices and physicians who don’t is only $31,000.

The 6 benefits of being a private practice physician

Some of the most important considerations that could lead you to choose working in a private practice include:

1. Physicians have more autonomy

Doctors in private practices aren’t required to follow hospital regulations or guidelines when it comes to administrative or care decisions in their work. You’ll have full autonomy on decisions like which software to use or whether to offer payment plan options. In a hospital setting, you’ll likely have less control over how the office runs.

2. Physicians can learn across the board

Private practice physicians have the opportunity to learn about more than just clinical work. As a practice owner, you’ll be able to continuously expand your knowledge set as you learn about the multiple aspects of running a business, including marketing, finance, business management, and more.

3. The potential to create your ideal work culture

When you enter private practice, you’ll be able to create your own work culture from the ground up. You’ll set the tone for patient care from the beginning, instead of entering an environment with its own pre-existing culture. You’ll also have the opportunity to set your own KPIs, such as patient satisfaction, patient safety, and patient follow-up rates.

4. Job security

Being in private practice can also lead to greater job security overall. You’re the boss, or a partner, rather than working in at-will employment or on a 90-day contract. However, it’s worth noting that private practice pay often fluctuates and is dependent on how many patients you see and your ability to bring in revenue above your staff and overhead expenses. Hospital pay is typically a steadier income because you’re on salary.

5. The 9-5 schedule

Since you can set your own hours, you won’t have to endure exhausting hospital shifts. You’ll be able to take holidays and weekends off and feel in control of both your schedule and life in general.

6. More meaningful patient relationships

As a private practice physician, you’ll have the opportunity to build relationships with your patients over years. While family doctors, pediatricians, and psychiatrists are often known for cultivating close patient relationships, other specialties can also build meaningful patient relationships over time and witness the long-term results of their care.

In summary

The choice between working at a hospital or in private practice can be a difficult one to make. Given that you’ll likely make similar incomes in both settings, it’s ultimately a question of what kind of work environment you’d prefer, as well as your ability and willingness to shoulder additional financial responsibility. There are many advantages to working in private practice, chief of which is greater autonomy, and for many, that will be the only reason they need to take the plunge.

In providing this information, neither Laurel Road nor KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.

Any third-party linked content is provided for informational purposes and should not be viewed as an endorsement by Laurel Road or KeyBank of any third-party product or service mentioned. Laurel Road’s Online Privacy Statement does not apply to third-party linked websites and you should consult the privacy disclosures of each site you visit for further information.

Related Articles