15 October 2010
Posted in Pearls in Ophthalmology
By Tom Harbin, MD, MBA (Chapter from The Student Doctor Network What Every Doctor Should Know... But Was Never Taught in Medical School)
It’s the fall of your last year of training and you need to figure out the rest of your life. Thirty years ago, the majority of physicians entered private practice. Now, the landscape has changed and the rate of change is accelerating. According to a New York Times article, many physicians are selling their practices and entering into some type of corporate employment, so many that fewer than half the medical practices in the U.S. are physician owned. The American Medical News reported an increasing disillusionment with private practice, for a variety of reasons including reduced reimbursements and negotiating clout, high medical school debt, increased cost for starting a practice and desire for a balanced life. When I began practicing at Piedmont Hospital, almost every doctor on staff was in private practice. Kaiser was a distant concept out in California. Now the hospital owns the practice of many primary care doctors, cardiologists, cardiac surgeons, and other specialists. Hospital-employed intensivists and hospitalists care for inpatients and a physician practice management company has contracted to handle the emergency department. Kaiser has a significant presence in Atlanta and their doctors provide care for that population.
Certain specialists leaving training will not have the option of choosing a private practice or may join a group only to see it sell out to a hospital or corporate entity. Others will still have a choice between private practice or corporate employment. I will discuss the process of finding a private practice in detail, but the principles apply to those seeking an academic position or corporate employment, whether large corporation or hospital.
Before sending out resumes and talking to practices, spend time thinking about what you really want. I don’t mean what salary you want in the first year of practice, even if that’s first on your mind at the moment. Nor do I mean the details of where your office will be located and where the patients will come from. Where do you want to be 10 years from now? What type of practice do you want for yourself: group, solo, employee of a corporate entity? What geographical area will make you and your family happy? You should always think about the long-term implications of a current decision. Decisions based only on short-term thinking can harm your long-term success.
For example, you have two choices for a job. The first offers a generous salary the first year, allowing you a better lifestyle immediately, as well as the opportunity to easily pay down some of your debt. The doctor who founded the practice still owns it and all other doctors are well-paid employees. Several doctors have left the practice, but that’s fine – you like everyone you have met and you’re confident you can get along. A group of tight-fisted doctors run the second practice. They don’t offer a great salary the first year and they don’t guarantee anything after three years. You will “make partner” after those three years, but you have to buy-in to the practice.
With just these facts in mind, which is the better choice? Of course it depends, but in almost every instance, the second choice is better when you take the 10 year perspective. After 10 years in the first job, you will have no ownership and you will still be an employee, with no effective voice in how your practice is run. The other doctors who left did so because they were unhappy. They wanted a say in the decisions that affected their daily lives and wanted to have ownership in an enterprise that they added value to every day. Yes, you would make more money in the first few years, but your long-term earning potential is stunted. If you are unhappy and leave, the expenses, financially, emotionally and otherwise, will far outweigh the higher initial salary.
At the end of 10 years in the second job, you’re an owner and your group has probably brought in new doctors who have compensated you for the effort you made in building the practice. You have a say in the running of the practice and can help correct the inefficiencies and irritations that arise each year. You’ve maximized the earnings potential for your practice lifetime and have something you can sell when you decide to retire. You didn’t make as much money as you wanted in the first few years, but now you’re in much better shape.
Think about the long-term implications of any decision you make. Don’t sacrifice the long term for imagined advantages in the short term. Make your career decision based on where you want to be in 10 years, not two years. The next section discusses what factors to consider when contemplating your future.
Where do you want to spend the rest of your life? Close to where you trained or close to where you grew up? Big city, small town, or in the country? Where do you want to be 10 years from now? Just as important, or possibly more so, where does your spouse want or need to be? Your spouse’s job or your own specialty may dictate the choice. If you’re a pediatric cardiac surgeon, you will have to go where the hospital facilities and job openings are. Your choices are much more limited than general pediatricians, who can go wherever they choose, at least in 2010. You presumably accepted these limitations before you began your training, and you’re stuck with them now.
When I was in training, a wise doctor gave our third year residency class “the talk” towards the end of our last year. The session included his advice on how to go out into the world. This lecture constituted all the practice advice I ever received in a formal manner, and it was helpful. At that time (1974), most trainees were male and married to non-working spouses. Obviously, the medical world has changed, but his advice is still practical. First, he advised us to go where our wives would be happy. In today’s world, where almost half the trainees are female, he might craft this advice in a different way, but the principle is the same. You are not the only one affected by the location of your practice. Your spouse has thoughts and feelings on this issue. I have watched doctors come and go from the practices of my hospital over the past 30 years. Many have spent several years building their practice only to leave because their family would be happier elsewhere. They wasted several years and suffered the emotional price of moving to a new location and starting over. It’s far better to have anticipated where you and your family would be happy at the very beginning.
Before you spend time looking at a practice or academic opportunity in the area of your initial interest, ask about the potential for success in that area. I am indebted to Rick Gable, a practice management consultant in ophthalmology, for making me aware of the practice environment in areas well away from Georgia. In many popular areas of the country, notably California, Florida, New York, and other attractive urban areas, there are many doctors and vigorous competition for referral sources and patients. The atmosphere is cutthroat and aggressive. Is that you? (If you’re in primary care, these considerations likely do not apply, but if you’re a specialist, they do.) Do you want to be in an area where you have to market, advertise, and truly hustle for patients? Does this fit your personality and approach to life? If it doesn’t, you may discover after several years that you found the right place but cannot make a go of it financially. This is yet another consideration on the “where” of your search.
Do you know what type of practice you want? Nothing is perfect; each type has advantages and disadvantages. Bear in mind that if living in a certain area takes the highest priority, you may have fewer choices in the type of practice you would like.
Do you want to be the only player in the enterprise or the exclusive decision maker? Do you hate meetings? Are you comfortable practicing without colleagues close at hand, handling the difficult problems by yourself? Do you have any business experience or at least some feel for running an office? If so, solo practice deserves consideration.
In such a practice, you can locate your office where you want. You also set the efficiency level, that is, the number of staff helping you. Some doctors want helpers surrounding him or her, performing the routine matters such as writing prescriptions and counseling patients. Others want to do it all. The more helpers, the bigger the payroll, but the greater the volume of patients one can see. If you’re solo, it’s your choice.
Some specialties suit a solo practice better than others. For example, a plastic surgeon, who may not see a large volume of patients in the office and spends a lot of time in the operating room, may settle for a solo practice as opposed to an ophthalmologist, who depends on a large volume of patients, spends most of the week in the office, and has a greater amount of equipment to buy before the office doors open. A psychiatrist, who needs almost no staff and no equipment, may decide to practice solo. Likewise, some locations dictate the issue. The farther you are from a big city, the fewer choices of groups you will have.
Other considerations include the need to have coverage for weekend call and managed care. At the height of managed care in the 1990s, managed care companies would not admit doctors new to the community to their roster. Therefore, young doctors were forced into group practices that had the clout to get them on the contracts. This is less true today, but the issue needs exploration in areas of the U.S. where managed care dominates.
Do you want to settle right in to practice without having to hire a staff? Do you want a ready-made base of patients with “partners” to share weekend call, staff to apply to all those insurance companies, the state licensing board, and a salary from the beginning while your practice is growing and you are getting all those provider numbers? Do you need referrals from generalists and want a base of referring doctors who are in your own practice? Group practice provides many advantages, not the least of which are older doctors who will be your mentors and teach you the nuances of practice. Since your training gave you medical education only and did not include the other aspects and realities of practicing, you can partially obviate this void in your knowledge by joining a group.
But, you pay a price. You will attend a lot of meetings. You may have to lobby your partners before you can buy a piece of equipment you know you have to have. When you’re new and the youngest, you will have partners who get credit and attention when you may want the same. These constitute a few of the considerations of group vs. solo practices. Other issues will emerge as the discussion continues.
Do you want to share a practice and spend less than full time seeing patients? Do you want an eight-hour day of work and then go home? Perhaps a corporate practice will suit you.
In this setting, you have even less control over schedule setting and staffing and you build up no equity in your practice. You will have no ability to sell your practice when you retire. But, you can move to another area more easily and you may get all the various types of insurance coverage you need, plus retirement benefits. Your salary continues, at least short term, no matter your productivity.
As you can see, no practice opportunity is perfect. Each has advantages and disadvantages. Your job is to project yourself 10 to 15 years down the road, figure out what you want, and select the type of practice that suits you for the long term. If you truly don’t know, realize that no decision is permanent and you can change your type of practice down the road. It just costs you when you do, so if possible, it’s better to know at the beginning.
If you’ve decided on solo practice, skip this section.
If you want a group practice and you know the general location where you want to be, you’re now down to finding the group that’s best for you. Understand that outside of selecting a spouse, choosing a group is the biggest decision that you will make for your adult life. You will spend as much or more time with the members of this group as your family, and your happiness at home will depend on how you spend your work-day hours. Moreover, the community will judge you as much by your group and hospital affiliations as your own qualifications.
You should find out as much about a prospective group as you can by asking other doctors, both those in practice and those in academia. You should meet every member of the group on at least two occasions. Once you are serious about a group, your spouse should meet as many members of the group and their spouses as possible. You should respect and ideally like the doctors in the group. You will spend many hours with these people, and they will expect you to fit into the construct of the group, not the other way around. If you see something you don’t like, don’t think that you can go in as a new member and change the rules to suit your own needs. You will be expected to fit in.
How is your prospective group regarded by the community at large? What is its reputation in the medical community? This key factor may be difficult for you to discover, but it’s important. You will have to ask a number of doctors and listen carefully. In these litigious times, people are reluctant to speak frankly, especially to say negative things. You should ask members of the prospective group what they regard their reputation to be. If you hear, “they (other doctors) don’t like us, but we’re good,” or words to that effect, look into it and consider it a warning. Some groups push or frankly violate ethical boundaries, operating aggressively and needlessly, ordering tests that don’t need to be done, seeing patients too often for the group’s financial benefit rather than patient welfare. Such group behavior becomes known in the medical community and all members of the group become tainted in the eyes of more conservative and ethical doctors. If you join such a group, you will be suspect. If you stay with such a group, you will be tainted. If you leave after learning of questionable behavior, you will be regarded as naïve for not doing your homework, but congratulated for leaving when you finally found out what you should have discovered before you joined the group.
If you’re lucky enough to be considering several options in your desired area, one factor for the long term is the group’s efficiency and overhead. See the discussion under negotiating the contract in chapter two. A well-run group with lower overhead, all other factors being roughly equal, will reward you financially over the years. A corollary to this is the overall financial stability of the group. A glance around the office can reveal glaring problems such as dilapidated furniture or out-of-date equipment, but it will take some direct questioning to uncover other details. Ask if any emergency loans have been necessary or if there have been salary cuts to office personnel. You may meet the group’s banker along the way, especially if you will need a loan yourself. Talk to the banker about this issue. Most groups are stable, but when a recession hits and your specialty involves patients paying a lot out of pocket for discretionary services such as aesthetic plastic surgery, cash flow and loan repayments can suffer.
You may be hesitant to ask probing questions, but you should ask them anyway. The group looking at you will or should ask similar questions about you, and you have every right to know everything about the group. Ask if any doctors have left in the past few years and why. Then go talk to the doctors that left and get their side of the story. Compare the answers. Check out the group with your faculty and at the hospitals in town. Ask, ask, ask. You cannot do enough of this type of “due diligence.” It’s vital to your search. If your research turns up red flags, then pay attention. As I stated earlier, you will likely not hear out-and-out criticism as you talk to other doctors, and disparaging remarks will be understated. Don’t let your desire to find a job blind you to problems. Make sure you listen carefully and chase down every negative remark. If you hear enough or you have a bad gut feeling, look elsewhere. It’s far better to avoid a mistake than to land a job quickly.
Joining a solo practice
What if the “group” is a solo doctor? First, find out if adding you to the practice is the first time a new doctor has joined. If there is a history of new doctors joining and then leaving, look out. This doctor is likely looking for cheap help and has no intention of keeping you on. Talk to each and every person who has left the practice. Talk to the staff if you can get a private moment. Scrutinize the employment contract for your rights. Be very careful before you commit.
If indeed your potential position is the first for the practice, you need to know if this constitutes a retirement move for the founding doctor or a way of growing the practice. If it’s a retirement move, you should have a set way of buying in and a definite date on which you take over the practice. A non-compete for the retiring doctor should be part of the final contract. If you’re buying the practice for a set price, you should own the practice and run the show at the end of the buy-in. If the retiring doctor changes his or her mind about retiring, the way in which that doctor stays, or indeed if it is allowed, should be up to you.
You should anticipate the opposite, i.e., the retiring doctor leaving before transitioning the practice to you. You will retain more patients if there is a long transition, a year optimally, six months at a minimum. The amount of time off during the transition period for the retiring doctor should be agreed upon, with price reductions for you if the conditions are not met. If the doctor leaves early, your investment is worth less, so you should pay less.
What if the doctor is young, busy, and wants to grow? You should not expect to run the show and the buy-in should be different. The future of your earnings is less definite, at least as compared to eventually taking over a known income stream. Your buy-in should reflect this uncertainty and have provisions for reduction if the practice growth does not occur.
In this scenario, should you share power equally? Equal power sharing sounds democratic and fair, but problems can quickly arise. Someone needs to run the show. Employees quickly discover they can play one against the other. Rarely do two people agree most of the time. So, no, you should not expect an equal say in matters, at least for a good while. The founding doctor should act as the CEO and should govern most of the important affairs and the daily office operations. After a relatively short time, you should expect to vote on big items such as adding new doctors, a large capital expense, or selling/merging the practice. You should read the next section even if you’re joining a solo practice. Many of the principles apply to your situation.
How do you find out about groups in your desired area? If you want to stay in the area in which you trained or return to your home town, you probably already know who the groups are, and you just need to find out which doctor is in charge of talking to prospective new members. In these situations, one of your current professors can make some inquiries for you or tell you details you need to know. Make use of these resources. The final task of a training program is to assist you in landing the best possible job, so take advantage of this resource.
If you want to go to a totally new area and your teachers can’t help you, you can consider one or both of two resources: a recruiter and a practice management consultant.
Recruiters regularly send me e-mails of practices looking for new doctors and such a firm could assist you in the area of your interest. Fees will certainly be involved, but your personal time and effort will be reduced accordingly. Our practice uses a recruiting firm to find ophthalmic technicians and our hospital certainly uses nursing recruiters. If you decide to use a firm, be diligent and get references so you know that you can trust the help you get. Also, know your fees ahead of time and have everything in writing.
Another source is one of the practice management consultant firms. The American Academy of Ophthalmology has a list of consultants, as do other specialty societies. See the box below for the names of two national organizations. These firms help with both recruiting and negotiating contracts.
PRACTICE MANAGEMENT CONSULTANTS
American Association of Healthcare Consultants
Medical Group Management Association
If you want to conduct a search on your own, the phone book is one good place to start. Another is the American Medical Association, which sponsors JAMACareerNet at jamacareernet.com. This site is free to job seekers and has a number of job listings. Another resource is your specialty society. For example, the American Academy of Ophthalmology, the society with which I am the most familiar, has a number of offerings for trainees, including programs at the annual meeting, as well as listings of opportunities.
Still another resource, and a great one, is the Student Doctor Network, (SDN, found at www.studentdoctor.net). SDN is a grassroots web community of students and trainees in a variety of disciplines including medicine. It hosts a number of forums to discuss many of the issues of this book, those involving medical students, residents, fellows and those early in practice. Many of its participants began their involvement in medical school and have continued their participation into the practice years.
Don’t necessarily be deterred by the lack of a job listing in a given area. If you have decided on a specific city and don’t see opportunities, knock on doors. Call a doctor in each group in that city. In some instances, a group may be just starting to search and your proactive call will hasten the process. In other situations, if you make it clear that for whatever reason, you will be coming to that community, a group may want to make room for you to avoid having a competitor spring up near them.
The Student Doctor Network’s forum on medicine also lists job positions and opportunities in a variety of specialties.
Before the interview, do your homework. Know as much as you can about the individual doctors as well as the scope of the practice. If you’re looking at an internal medicine group, find out how much sub-specialty work is done within the group and how much is referred out. Does your hospital have hospitalists and does your group use them? Will you be strictly an office doctor or will you see patients in the hospital? Are there satellite offices and will you be expected to travel within your region?
During the interview, do you click with at least some of the doctors? Do they seem to like each other? Does the group socialize after work? Many do not, but if they do, your spouse’s feelings and impressions take on even more importance. Your spouse will likely pick up on some things that you miss, so don’t ignore that source of input.
When I began my MBA studies, the faculty assigned a very dry book
on the culture of organizations and made us read it before classes began. We all groaned whenever the book was mentioned in our organizational behavior course. But there was good reason in taking up the study of culture, and I appreciate the importance of culture more every year. Group culture rules everything. As one doctor said later, “Culture trumps strategy every time.”
Culture refers to the unwritten rules by which a group operates, including “the way we do things,” the expectations of staff about behavior, how patients, vendors, and employees are treated, as well as the ethics and how strictly the rules are followed. Culture determines all of these and more.
If you learned very conservative indications for testing or operating and join a group with much looser ones, over time you will more closely mimic the group you joined. It will happen insidiously and almost without your realizing it. If the group’s norms are aberrant, you will either leave or become like your group. If you stay, you will become aberrant. You will not change the group by your different behavior. On the other hand, if your group is conservative and you are too loose, either you will change or the group will ask you to leave. The group will not change.
The April 2, 2007 issue of American Medical News quoted a study performed by the Cejka Search group and the American Medical Group Association to determine why physicians left a group practice. Fifty-one percent of the time, the most common reason was poor cultural fit with the practice. This confirms the importance of culture as you evaluate a practice.
If you connect with the group’s culture, you and the group will be happier, and your adjustment will be easier. So how do you find out about group or even a solo practice’s culture? Ask and observe. Spend time with the group. Watch how the staff treats patients – in most instances, their treatment of patients mimics the doctors’. Talk to referring doctors and hospital administrators; look and be aware of what you want to know. Can you see yourself fitting in? Would you want your family treated this way? Is this how you learned to behave or want to behave? Listen carefully to the doctors and staff during your interviews. What do they demand of you? What are their goals for you? How do they refer to patients and colleagues in the community – respectful, scornful, loving, or calculating?
Be aware of the importance of culture. Ask the doctors to describe their culture, although many will have no idea of what you’re asking. Try to schedule some free time in the office just looking and listening, if that’s practical. Observations on such occasions can help reveal culture and true personalities. Ask and look. You cannot do enough of this type of diligence.
When the interviews have concluded, you should know whether you like and respect the group and its culture, what your duties and travel requirements will be, and how much of your specialty you will be allowed to practice. You should be happy and comfortable with all these factors.
Read more in Dr. Harbin's book: The Student Doctor Network What Every Doctor Should Know... But Was Never Taught in Medical School
 Gardiner Harris, “More Doctors Giving Up Private Practices,” New York Times, 25 Mar, 2010: B 1
 Victoria Stagg Elliott, “Ownership Loses Its Luster,” American Medical News, 26 Oct. 2009: 23-24
 Myrle Croasdale, “Gender, Age Factors in Physician Retention,” American Medical News 2 Apr 2007.