Maintaining your independence as a physician practice is beneficial in many ways, however, it does come with some drawbacks, mainly associated with the business side of things. If you are properly prepared and surround yourself with a team of professionals that can help you navigate the business, administrative, and legal needs of your practice, then staying independent should offer more benefits than consequences.
Shane Tenny, CFP® and Spaugh Dameron Tenny partner, has outlined the basic fundamentals of maintaining an independent physician practice. Keep in mind that the end goal should be to make a decision for yourself and your practice that is the most beneficial, whether that is maintaining autonomy or joining a larger network. You need to understand what both options can offer you and prepare yourself to make educated decisions. Read on for more details.
Staying independent as a physician simply means that you opt to run your own practice rather than merging or selling to a larger hospital system. This can be done on your own, or by joining an Independent Practice Association (IPA), which allows you to maintain your autonomy while offering you a more stable baseline to draw from in cases such as insurance reimbursement negotiation and other legal matters.
According to Tenny, “What a lot of doctors have found is that they are not good business owners, they don’t like the complexity of running a business, and medical and financial pressures are getting more complicated. Whereas, if you’re associated with a larger system like Atrium Health, for example, you have more power to negotiate insurance rates than a smaller doctor’s practice would”.
You may wonder if it is better to stay independent. The truth is, it’s not really a matter of being ‘better or worse’ to stay independent, at least not in the general sense. However, there are pros and cons that you need to consider and what constitutes as a dealbreaker for one doctor, may not be the same for another. In reality, the questions should be, “Is maintaining an independent physician practice better for me?”
Benefits of Merging with a Big Hospital System
With all of the perks, however, one of the main drawbacks is that you would be required to give up some of your previous rights and independence. You would have to accept the way things are run by the big hospital system. And on the other hand, maintaining your independence has its own set of benefits to consider.
Benefits of Maintaining an Independent Physician Practice
For those of you set on maintaining your independence, take a look at these 5 tips that will help you with the legalities, financials, and overall mindset you need in order to run your independent physician practice smoothly.
The following details 5 tips that will help you maintain your independent physician practice. Conversely, many of these will provide you with more clarity should you decide to sell your practice and become part of a bigger hospital network. At the end of the day, no matter what you choose, you need to have a thorough understanding of where your practice stands financially, and where you stand with meeting your career goals. You may be surprised to find that one method of practice works better for you than the other. Take a look at these 5 tips below and decide for yourself.
You should make the decision to maintain your autonomy as a practice if it adds more value to your life and your career than joining a healthcare system. A healthcare attorney can answer questions about the value of your specialty on the market and can negotiate on your behalf for better insurance rates.
Healthcare attorneys can ask the right questions to ensure you are properly paid, represented in court, and maintaining compliant policies. Having a professional on your team who can handle all the murky legal waters is crucial for protecting yourself and staying up to code.
How a Healthcare Attorney can Assist Your Independent Practice
Understanding your rights and obtaining fair rates for yourself is much more easily done if you have a legal professional advocating for you. It also doesn’t hurt to stay on top of healthcare trends and emerging regulations that can complicate how your practice operates. Additionally, healthcare attorneys are beneficial to have around if/when you are in the process of deciding to merge as well. They can provide valuable insight which can help you make a decision.
Questions Your Healthcare Attorney Can Answer Should You Merge Your Practice
Before you make any big decisions, you need to have a thorough understanding of your current financial situation. Knowing where you stand relative to your own goals can give you the clarity on whether you can meet those goals with your current financial structure.
A Financial Planner Can Help You
On the other hand, if a big hospital system wants to buy you out, you will have a better understanding of your position and worth which will keep you from settling or underselling yourself. It is the best way to ensure the most rewarding possible outcome for your practice. At the end of the day, a financial planner will keep you on track for hitting your goals. They will also be able to spot deficiencies and areas of improvement, and ultimately help you make an informed decision concerning the reality of staying independent.
Owning an independent physician practice comes with a lot of paperwork and administrative processes to keep it running properly. Many doctors perceive this mandatory business side of practicing to be a major drawback. This is where the role of a practice consultant comes into play. Essentially, they will take care of the administrative side so you can focus on working with patients.
An experienced practice consultant can help you review your current practice for efficiencies and make suggestions that will help you streamline your practice processes. When selecting the best practice consultant, you will want to find one that is up to speed on current policies and best practices, and stay on top of the ever-developing industry. This will allow them to keep your practice current and running as efficiently as possible.
Owning your practice is, essentially, running a business. Therefore, if you do decide to stay independent, you must adopt the mindset of an entrepreneur. Consider attending leadership, management, and business trainings to better prepare yourself to operate an independent physician practice with an entrepreneurial mindset.
Take a hard look at yourself and decide which avenue will suit you better and ultimately create a better environment for your staff and patients alike. Regardless of what you decide, exercise the muscle of leadership and motivation, so that you can continue to compete effectively in an ever-changing healthcare landscape.
It should go without saying that you should fully recognize the value of your skills, experience, and overall practice. This knowledge will help you whether you decide to stay independent or merge with a larger hospital system. If you do decide that staying independent isn’t for you however, then go into any conversation armed with the knowledge of what you’re worth. Leverage the aid of the professionals mentioned above to obtain concrete evidence of your practice's worth on paper.
Shane Tenny is the managing partner of Spaugh Dameron Tenny. Along with hosting the Prosperous Doc® podcast, Shane has a true passion for behavioral finance, helping clients and audiences understand how to develop successful strategies based on their unique temperaments. An accomplished and highly engaging speaker, Shane is regularly interviewed for television and podcasts, is actively involved in the Financial Planning Association®, and contributes to industry advisory boards.
For over 50 years, Spaugh Dameron Tenny has provided comprehensive financial planning for physicians and dentists across the U.S. In addition to providing personalized advice, we walk our clients through their options to help maximize finances and maintain financial security.
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