By Diane Palombi, OD
Jan. 27, 2016
Owning a private practice is hard work. There are many responsibilities. You usually never work a regular eight-hour day. Then someone comes into the picture and offers you the world if you sell your practice to them and remain as an employee. Outlined in a sidebar below are important factors to consider in that transition from being an owner to being employed.
Optometrists should be aware that other medical professionals go through this transition. The followingis one case where an internal medicine specialist soldout to a third party–but where the outcome was not a positive one.
Should I Sell My Practice & Become an Employed OD?
Visualize your new work routine. Determine what the corporation, or local chain, that you are considering for employment, is going to add to improve your professional life. For instance, are they going to increase your salary, allow you to avoid investing yourself in new technology?
Estimate patient load. How many patients per day will you be expected to see, and will your employer be open to hiring an additional doctor if they expect your patient volume to increase?
Gauge impact on your staff. Talk with valued, long-term staff members, and find out how many will continue to work at your practice after it is acquired. Take time to explain any changes they can expect, such as different or expanded working hours or decreases in salary or benefits.
Gauge impact on patients. If you will be expected to see more patients, crunch the numbers and figure out what that means to how much time you can spend with each patient. If you have a practice with a small-town doctor feel, in which you get to know your patients well, will the requirements of your new employer diminish that special aspect?
See if Personality is a Fit. Find out exactly who your new managers will be–who at the company will oversee your practice operations–and see if this is a person (or people) you feel you could happily work with long-term.
Determine if you will be able to maintain office culture. Will you be able to keep personal items, like religious symbols, such as crosses, on the wall? Will you be able to keep your family photos out? Will you and the staff be expected to keep a more conservative “professional” air, and wear uniforms?
Determine your control in office management. Ask your potential new employer how it will work when you notice a repair in the office needed, or when you notice a larger, more important need, like new instrumentation. What will the process be like for getting those needed services or items? How much control and power will you have in determining what the office needs to run efficiently and to deliver superior care to patients? —ROB Editors
This doctor found that going from small, independent practice owner to corporate employee was harder than she expected, and not nearly as profitable as she was promised. More small, independent eyecare practices also are facing the challenge of retaining their independence and private ownership. Her example, detailed below, shows why you may want to think twice before relinquishing ownership to a corporate buyer.
Initially this doctor never intended to be a private practitioner. She was hired by a hospital group as an employee to work in their office, and more doctors would be hired in the future. The other doctors were never hired, and after working in the practice solo for several years, the hospital group gave her the practice. This doctor worked hard and built up a nice practice for herself. She was even able to afford to purchase a building to relocate her practice.
Over time her situation changed. Her family life had new demands. Electronic health records would be implemented in the near future. She could not afford the investment. However, her practice was 50 percent Medicare patients, so she had no choice but to comply. Another issue was dealing with insurance. The office was having debt collection issues from patients with large insurance deductibles. Getting correct compensation from insurance carriers, especially Blue Cross and Coventry, was another problem.
Then the hospital systems began to recruit her. They offered to take over ownership of the practice while the doctor would remain as an employee. One of the systems offered her a big increase in salary based on the practice billings from the previous year. In addition, they would put EHR into the office. They were also going to bring an additional doctor into the practice. This seemed to be the answer to her problems, so she sold to this hospital group.
Problems popped up almost immediately. The staff was harassed about working too many hours even though the work load had not changed. Six months came and went with no attempt to recruit another doctor. The EHR arrived around eight months later, but created more problems. The doctor was now working longer hours during the work week and all weekends on the computer. In addition, the EHR cut her patient load from 25-30 a day to 20 or less. This situation did not improve with time. The raise never materialized to the amount initially promised. The hospital system blamed it on loss of patients due to their more limited insurance panel, her inability to do rounds at the primary hospital in town, which was owned by another hospital group, lower patient load due to the EHR implementation, and over billing, the latter of which was not true.
Things did not improve with time.
After appealing for an area “needs assessment” in order to get a partner, the hospital group did hire a new doctor. Then they placed him in another practice that already had two physicians and a nurse practitioner. They also moved her busy nurse practitioner to another office that was not as busy. So, now this doctor had double the uncompensated work load. The hospital owned by the group where she did make rounds started creating problems for her. She eventually had to quit there. This also decreased her collections and compensation.
This doctor was in a” grin and bear it” mode. Most of the other private practices had sold out to one of the three main health systems in the area. The health systems had the clout that they needed to dictate policy.
In the end it came down to a simple cross. When the doctor was in practice sale negotiations she mentioned that she had a Ten Commandments poster in the break room. She was assured that it was not a problem. Four years later it was a problem. They called it disruptive behavior, so she relocated it to her office and replaced it with a small wooden cross with a heart in it made by her brother. A few months later the health system said either take down the cross or be fired. The doctor reminded them that that would be in violation of the Missouri constitution. Ironically, even though this group was originally part of two of the largest faith-based hospitals in the region, they informed her that if they considered her behavior disruptive, they could violate her constitutional rights.
Fortunately, this doctor had seen the writing on the wall. Prior to this meeting she had contacted her mentor at her alma mater. She had gotten a job offer in their Department of Internal Medicine. So, when she was threatened with termination, she resigned instead. This meant packing up and relocating to a different city. Even though she had to give six months’ notice to the corporation, her patients were only given three weeks’ notice of her departure by the corporation. The office was then closed and the patient records were transferred to another office in the area.
Her last thoughts on the matter: “The practice of internal medicine is at a crisis point. We had a physician shortage prior to the EHR, but it has gotten much worse. Many internal medicine physicians in my county left practice over the 14 years I was there. Some retired. Some became hospitalists. Some experienced early deaths (suicide, accidents, heart disease and cancer). Some were driven from practice by hospital systems due to unrealistic work demands. They have not been replaced by new physicians as so few desire to go into outpatient primary care medicine. Most of this has been driven by the government and insurance companies. Without outpatient doctors, we will not have the world class healthcare system that we enjoyed in the past. It scares me that people are just ignoring this!”
Although this doctor is an internist, the eyecare industry is not immune to this either. I know of a large optical corporation in my region that was started as several private practices selling to one practice. It is now the largest eyecare practice in our area.
Competition is a good thing, but unfortunately, government and insurance mandates are making it hard for the little guy to compete. You need the deep pockets of a large corporation to afford the new systems that are being required. Long gone are the days that you had the option of filing paper claims. I am not saying that this improved technology is a bad thing, but it may be at the expense of having fewer doctors and fewer modes of practice available. It will be interesting to see how many small private practices survive in the future.
Would you consider selling your practice to a large corporation, or even a chain of local eyecare providers? What tips can you provide on surviving as a small independent practice?
Diane Palombi, OD, now retired,owned Palombi Vision Center in Wentzville, Mo. To contact her: email@example.com