Career decisions: Should you start, buy or join a practice?
The bottom line: Choose what will make you personally and professionally happy.
It’s not just new physicians fresh out of residency or fellowship that face career decisions. It can happen to anyone, anytime.
Some are fresh out of training. Some are early-career physicians who decide they made a mistake in choosing an employer, choosing a location in which to practice, or found that the position they were planning on evaporated. Some always planned to work for someone else until they were more comfortable with their clinical and business skills before setting out on their own.
Some are mid-career doctors whose groups break up or are acquired by bigger groups with whom they find disagreement. Even senior physicians sometimes find themselves in a situation where they have to make a choice just a few years before retirement.
Joining a practice
Decide where you would like to practice, do a little research on community need, then look around for available options and support resources.
Taking employment by joining a practice is certainly the simplest solution, if a job is available. There is a flood of physicians taking this route now in response to the Affordable Care Act and with the increasing burdens of administration. On the other hand, I assist a regular stream of physicians that have become unhappy with their employer and who are eager strike out on their own or be able to control their own work environment.
Buying a practice
Buying a practice is an excellent alternative to starting one, if the purchase is at a fair price.
It is less expensive to buy a practice at or below fair market value (FMV) than to start your own, but it is less expensive to start a practice from scratch than to over-pay for a purchase. These scenarios compete with each other and balance each other out financially, which is what keeps FMV “fair”.
Buying a practice eliminates much of the hassle and expense of a startup, provides a foundation of patients upon which to build, produces quicker cash-flow and reduces marketing needs. In some competitive markets, the only way in is to buy your way in.
Drawbacks can include inheriting antiquated systems in need of replacement, a dysfunctional staff, and perhaps a poor clinical reputation. Sometimes the seller’s spouse was the office manager, and management walks out the door with the seller. (Sometimes that’s a good thing.)