Private Practice Management & Business Considerations
Many specialized healthcare providers such as allergists, plastic surgeons and orthopedic doctors belong to a private practice, although most have privileges within various healthcare systems like University Hospitals or the Cleveland Clinic. These specialized providers often have relationships with primary care doctors who help fuel their business by referring patients to them. In the past it was easy for primary care doctors to refer their patients to the specialist they had a relationship with or whose work they had seen and trusted. In recent years more and more primary care physicians are employed directly by hospitals, limiting the referral pool of who the hospital works with, not who they would choose personally.
Weighing In: The Pros & Cons for Specialized Healthcare Providers
As I’m sure you can imagine, there are pros and cons to both working solely for a hospital or choosing the private practice route. One of the biggest pros to working in private practice is having the overall say in what procedures can be done for a patient (legally, of course). In a hospital setting, doctors can be limited to what the hospital board or head physician thinks is the right choice as well as what policies are put in place by the hospital system. In a private practice, not only can doctors choose what they want to do, but they typically aren’t limited to the number of procedures they can perform each year. Oftentimes in hospitals, physicians are limited to a revenue or patient cap which would be aligned with their unique healthcare practice accounting processes.
By working in private practice, specialized healthcare providers are also exposed to other areas of the business, like marketing, finance and accounting. As part of the private practice management efforts you have the opportunities to learn about the business as a whole, not just the healthcare specialties your practice performs. Private practices can also be known to have a more relaxed, flexible atmosphere as there aren't overarching hospital policies in place.
While the freedom to choose the procedures is nice, there are some benefits from working primarily in the hospital atmosphere. For starters, with a hospital comes a range of knowledge and opportunity from coworkers. Patients can easily be treated or seen by another professional within the same building, which makes communication among physicians easier.
There is also a ladder waiting to be climbed in terms of career growth. With a hospital system comes many opportunities for promotion and increased responsibility. Often in private practice, doctors are brought on based on their expertise or healthcare specialization and stay in that role. At the hospital level, there are robust administrative staff resources to handle the reports, paperwork and deal with the insurance companies. In private practices that can oftentimes falls on the doctor in the private practices or their healthcare practice accounting firm.
One of the biggest benefits specialized healthcare providers can take advantage of at hospitals is malpractice insurance. When running a private practice, part of that practice management will be the handling of the malpractice insurance. You will be faced with practice evaluations around the benefits of the individual doctors carrying the insurance or your private practice taking care it.
Getting the Best of Both Worlds
Fortunately, doctors don't necessarily have to choose. Many specialized healthcare providers can work in both the hospital system and private practice. Through a hospital affiliation, doctors can make sure they are maximizing their potential for growth and exposure as a healthcare provider. When it comes to accounting practices related to hospital affiliation, there are typically contractual fees that may often be taken from a paycheck. The American Medical Association shares more helpful information on compensation, service agreements and other considerations in their article Value-Based Care Models: Deep Dive FAQs for Hospital-Affiliated Physicians.
Plant the Seeds to Grow
One of the best ways to grow a private practice is to differentiate itself from the competition. As a healthcare provider, doctors should make sure their patients know that they have their best interests in mind. Doctors should make sure patients know that they matter to them as a patient and a person, not just as a source of income. Here are some changes (some easier than others) that doctors can consider making to make their practice stand out:
Some providers give their patients their personal cell phone numbers to use for emergencies or after hours concerns. This can make patients feel like they are a true priority.
Writing thank you notes to new patients or to patients that referred a friend is a nice personal touch. Especially when these notes are handwritten, it shows that they care about the new patient, or how much the referral is appreciated.
When doctors become more involved in their community they are getting a chance to network. Attending fundraisers and community events is a great way for healthcare providers to become a familiar face in their community.
When appropriate, following up with the patient’s primary care doctor can help grow a relationship with new physicians, who in turn can encourage additional referrals.
No matter if you choose to become a full employee of a hospital system, run a private practice or find a happy medium in between, our skilled healthcare CPAs at JLP are here and ready to answer financial questions for specialized healthcare providers.