More and more physicians are opting to leave private practice (or to skip it altogether) for the perceived job security and hopefully steady paycheck of hospital employment. According to a study conducted by the American Medical Association (AMA) , the number of physicians practicing in private practice is now less than 50%. According to the AMA, this is the first time the private practice percentage has dropped this low since 2012 when the AMA began formally conducting the study.
To be sure, managing a private medical practice, like any closely-held private business, has its share of challenges. However, as the recent shake up at one Pennsylvania health system demonstrates, being someone else’s employee can be a risky proposition when you have no control over the decisions that can make or break your practice.
Many physicians thinking about hospital employment as opposed to private practice should consider that they are likely to receive only a short term employment agreement – often 3 or fewer years in length with the possibility of earlier termination. Typically there is no guarantee of contract renewal and if times are tough, many physicians can see their proposed renewal-term compensation reduced or put at further risk based on often unachievable performance metrics.
Moreover, employed physicians could wake up one day to learn that their employer is in financial trouble and they are being “restructured” out of their job. When asked, many physicians who have elected to remain in private practice will say they are willing to put in the work required to manage and grow their practices in exchange for the knowledge that they retain control over their own professional destiny.
While hospital employment might be right for some physicians, all physicians considering employment should carefully weigh the long term risks and rewards of building a private practice over which they maintain control versus those of employed practice where they may find their professional life dangling by a relatively short-term contract over which they have little control.
If you need legal assistance with your private practice or if you are looking to establish or re-establish your private practice, please contact Todd Rodriguez at 610-458-4978 or by email at email@example.com.