Every graduating medical student has dreamt of owning a medical practice. It is the ultimate goal of becoming a physician. Why do most, if not all physicians want to own their practice. There are several reasons for that.
1) Physicians are intelligent and independent creatures. They became physicians in the first place to call the shots.
2) Physicians have high sense of self esteem and this fuels their stubbornness and inability to follow orders. They rather command than follow.
3) Over time physicians develop a relationship with their patients – a sense of owning them aka being responsible for their well being. This creates a conflict about who owns the patients – the medical practice or the physician. (My take on it? It is the patient who owns the physician or medical practice!)
4) Becoming the owner or partner appears lucrative – both financially and spiritually.
What are the ways you can own a medical practice ? There are only three:
1) Start your own medical practice
2) Buy a medical practice
3) Become a partner in already existing medical practice ( i.e. buy a share of the medical practice)
Pros of becoming a partner in a medical practice:
1) You do not have to start a medical practice from scratch
2) Already operating infrastructure available to you in the medical practice.
3) Business risk is shared in a medical partnership.
4) Easier to get business loans once a business is deemed established. Usually two years of operation is considered adequate by the banks.
5) More flexibility in scheduling vacations.
6) Already existing networks and word of mouth reputation established. (Hopefully good reputation!)
7) Ability to get higher reimbursement rates from the insurance companies.
8) You do get business related tax breaks.
Cons of partnering with a medical practice:
1) Income levels not guaranteed. They may vary based on overhead for that year.
2) You still are not the ultimate boss you dreamt of. The most senior partner usually retains the ability to call the shots.
3) You still cannot do whatever you want. You have to go through a partner voting system.
4) Medical partnership usually retain a restrictive covenant in the contracts.
5) Getting out of partnership is akin to a messy divorce.
