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Does my Doctor Own his Private Practice?

Does my Doctor Own his Private Practice?


Does my Doctor own his Practice?  This may or may not be important to you.   When you are hurting, and need help, it is probably the last thing on your mind.  But,  if you are carefully weighing your options, and seek a solution to a chronic condition,  perhaps you should answer that question.  Is a Private Practice Better?

There is no question that the whole medical community is changing.  While our government strives to provide healthcare for the population, it is trying to balance the costs with the outcomes associated with the delivery.  With an aging and expanding population, the costs of treatments have placed a significant burden on the finances of the country.  To fulfill promised access to healthcare, the physicians are seeing more and more patients, while juggling with the increased complexity of medicine.

Every patient must be properly evaluated.  Then, ordered diagnostic tests  and consultations must be reviewed.  Then treatments initiated and monitored.  With each iteration of technologic advancement,  the complexity of the process increases.  Coupling this increasing complexity with an increasing aging and expanding population, leads to large volumes of patient encounters,  tests, and results.  Anyone can see that the potential for error also increases.

To combat errors,  the government increases regulations in hopes that it will be able to minimize the risk to the population, and prevent inappropriate or fraudulent behavior by the providers of healthcare (Doctors,  HMO’s. insurance companies,  Hospital’s etc.)

For the physicians,  the burden of providing care to an ever aging and expanding population becomes larger with each year.  Unfortunately,  our Medical Schools are not producing enough physicians to accommodate this growing population.  In addition,  due to the higher costs associated with delivery of care,  the government has been trying to decrease costs by decreasing unit reimbursement for certain physicians and procedures.

Cost of practice to individual physicians continue to increase.  Now with the increase regulatory demands,  many have found it difficult to maintain their own private practices.  It is estimated by 1014, that up to 75% of physicians will be employed.


Because, in the end, your physician is also a human being.  While most will say that it does not matter how they are paid, and  they will  deliver the same excellent care,  the nuanced edges of care will change depending on your employment status.

Employed physicians often do not have the burden of running the practice,  but because they are now an employee, they will comply with the terms of their employment.  As they are no longer the owner,  they can lose some of the drive to go the extra mile for certain situations.  I am not saying this always happens.  Often times,  employed physicians are excellent in every way.  But, there is always that potential.

Having said that,  employed physicians must still provide a positive return for the employer.  In our current situation where there are too many patients, with few funds to provide for their care,  there may be incentives (both good and bad) to increase patient visits,  or other treatments to provide this positive return.  In the worse case scenario,  physicians may have incentives to treat too many patients at a time.  There is potential for poor patient satisfaction.  I guess the analogy is like in retail where you will go to the “big box store”  for a bargain, knowing that there will not be the greatest customer service or individual knowledgeable  attention.  But, in certain circumstances,  you are willing to pay more for individualized attention, and custom care.

So Why is Physician Ownership of their Practice Better?

It may not always be.  If the private practice physician is struggling with his costs, poor with his contracts, and awful in staff training,  then maybe that physician should work for someone else.  If a physician feels he is underpaid, and overworked, usually you can see it in his/her staff.  If you go into an office, and the staff is  always rude, and the waiting room always looks like pandemonium, the practice will likely be struggling with the above situation.  The staff learns its attitude from the management and the owner.  This physician owner is struggling, and unless there are changes,  he/she will not be able to deliver a satisfactory environment for the patient.

But,  there are private practices that do a good job in providing caring and competent care.  The staff is friendly, and caring.  The waiting room is never over flowing.  The physician stays on time, and respects your time as much as you respects his/hers.

The difference in these private practices is the confidence of the physician owner.  This physician usually will not accept horrible insurance contracts that forces the physician and staff to see a tremendous number of patients to generate an income. With appropriate fee’s and contracts,  patients will be scheduled timely, and appointment schedules will be on time.  With appropriate fee’s and contracts,  the office will be able to develop an atmosphere of individual care.  This physician will also not tolerate patients that are always late, or disruptive to the office.  This physician only accepts patients that value the opinion of the physician, and in turn will provide appropriate opinions, in  timely professional manner.  This physician will recognize the hard work of the staff, and encourage collaboration, not conflict.

The bottom line is in the well run private practice,  because fee’s to the physician are reasonable,  they do not have to schedule 40 patients per physician/day.  Because the offices tend to be smaller,  there are less administrative costs,  and will better contracts, there are less regulatory pressures (regulatory pressures are associated with the high volume, less reimbursement plans, usually run by the government or surrogates).

And,  if the private practice physician does not deliver the above,  usually they cannot get the better contracts, or the fee’s.  So the poorly run practice are now closing and going to the employment model.

For the above reasons,  it may MATTER IF YOUR PHYSICIAN OWNS HIS PRACTICE.


This blog is the personal opinion of John Shim MD based on over 20 years in Orthopedic surgery.









Last modified: January 5, 2018

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