It’s no secret that practicing medicine “ain’t what it used to be.” Escalating costs, reduced reimbursements, having to implement electronic medical records, managing relationships with insurance companies, keeping up with billing and coding rules, and staying on top of government regulations are just some of the challenges facing anyone in medicine today. Many ophthalmologists are dealing with these nonmedical matters by circling their wagons and joining with other doctors and/or institutions. The question is: Can a doctor in solo private practice survive in this environment?
“I’ve been consulting for ophthalmologists for 40 years, and every year I’ve heard the tribal beat that small private practice is moribund and will soon be unavailable as a professional option,” says John Pinto, president of J. Pinto & Associates, an ophthalmic practice management consulting firm. “Of course, private, independent practices continue to do just fine. This way of practicing has survived massive drops in fees, the encroachment of health systems on a local and regional basis, the 1990s encroachment of Wall Street, and the Great Recession. And it’s doing just fine in the midst of the latest industry shift—putting practices together in a private equity context.
“Today, there are about 7,000 private ophthalmology practices in this country,” he adds. “That number may decline over time, but for those doctors who want to be private practitioners, the opportunities are still there. In fact, we’ve recently gotten an increasing number of calls from doctors in academic or institutional settings who want to go out and hang a shingle. So the interest in solo practice is still very real.”
It’s not hard to see why surgeons like being in private practice. “The appeal of being in private practice is the same as always—being in control,” says Mr. Pinto. Specifically, doctors in private practice cite advantages that include: getting to structure their practice the way they want it to be; being able to make decisions without having to get approval from others; being able to decide how much responsibility they’ll take on in the office, potentially eliminating the need to hire technicians (a huge cost saving); and being able to decide how many hours a week they want to work.
First-hand Experience: Getting Started
On the other hand, the challenges faced by private, independent practices today—especially boutique-scale practices—are considerable. Those challenges include:
• Financial challenges. “The cost of hiring qualified lay staff has been going up faster than inflation,” notes Mr. Pinto. “The cost of bringing in professional colleagues as partner-track associates is also going up, because we’re not training enough new ophthalmologists. Then there’s the cost of technology, both in terms of advanced testing and treatment equipment—a pretty heavy lift for a small practice—and the challenges inherent in adopting EHR.”
“Nowadays, to build a nice office and equip it well will cost you $600,000 to a million dollars,” says Richard L. Lindstrom, MD, managing partner at Minnesota Eye Consultants and an attending surgeon at the Phillips Eye Institute and Minnesota Eye Laser and Surgery Center in Minneapolis. “When I went into solo practice 30 years ago, I had to borrow $60,000, but I had 10 years at the university under my belt, a well-established practice and no debt. Today, many doctors are starting out with significant debt; they’ve had to borrow money to get through college and medical school.”
He notes that it’s also harder to borrow that money from a bank than it used to be. “Doctors are not as secure a risk as we once were,” he says. “That means that an individual may need some family money or support to get started. I’m sure that’s part of the reason the majority of residents coming into practice today are joining at least a small group, and not just hanging out a shingle. I’d estimate that only 5 percent of today’s young doctors can manage the start-up expenses.”
• Managing insurance claims. In terms of challenges, Kerry McKillop, COE and practice administrator at the Kirk Eye Center, a solo practice in Loveland, Colorado, says that billing continues to become more time-consuming. “We have a great billing manager who’s been with us for about 19 years,” she notes. “She stays up-to-date on what every insurance company needs, and that’s quite a chore. In fact, she used to be able to handle all of the billing and payment issues by herself; now our office manager spends a good deal of time entering payments as well. Luckily, we have a computer system that helps us manage some of the details, such as letting us know about a patient’s eligibility before the patient comes in. That tells us what information we need to collect from the patient, so we don’t spend time collecting that after the fact.”
• Government regulations. Ms. McKillop notes that increasing government regulations also make things tougher. “We have to keep up with all the MIPS things, of course, and they change yearly,” she says. “That forces us to make changes periodically, which gets tiresome. On the other hand, they’re not impossible to manage, and as a small practice we have some advantages. We’re not required to do all the things that big practices are.”
• Going without MD backup. Ms. McKillop points out that despite having greater flexibility to create the kind of practice you want, being in solo practice puts more pressure on the doctor and limits flexibility in other ways. “In a large practice, if you don’t want to come in one day, it’s not a big deal to reschedule your patients with another doctor,” she notes. “We’re a little more restricted in that sense; if Dr. Kirk doesn’t show up, I have 45 patients to reschedule. He’s the only MD here, and we’re booked a month out.
“Some appointments are more problematic to reschedule than others, of course,” she continues. “Comprehensive eye exams can be rescheduled and it’s not a big deal. We have two optometrists here; they can take over many of the things that Dr. Kirk would do if he decides to be out for a day or two. But there are many medical things they can’t do. If you have a glaucoma patient who’s in big trouble, that appointment won’t be easy to postpone, and patients who need injections are usually on a schedule that we need to stick to. So anybody starting out in solo practice will have to be dedicated to working long hours. You have to be devoted if you want to make this work.”
One advantage of owning a small private practice is being able to provide a more personal patient experience, which can be a real selling point for patients. This can include strategies such as providing cookies when wait times unexpectedly grow long, or passing out green carnations for St. Patrick’s Day. (Pictured above: The waiting area for Kirk Eye Center in Loveland, Colorado, a privately owned one-doctor practice.)
Despite this impressive list of challenges, Mr. Pinto notes that they can be overcome, as many practices have proven. However, he adds that the challenges facing solo ophthalmologists aren’t likely to diminish any time soon. “The macroeconomic and social environment we’re heading into for the next 20 or 25 years is one of profound challenge,” he says. “We have debts in this country and other developed countries that are unsustainable. We have levels of growth that have pushed the natural world to its limits. We have political strife and energy prices that are set to rise substantially, and our country’s ability to pay for health care is reaching its limits.
“All of these factors are not going to leave ophthalmology untouched, even though the demand for ophthalmologic care is increasing rapidly,” he says. “So plenty of challenges lie ahead. Whether group practices will have an easier time dealing with them than solo practices remains to be seen.”
Is It Really That Hard?
Michael Stock, MD, recently opened a solo practice in St. Louis. He says he’s heard many warnings about the difficulty of being in solo practice today, but his experience has not supported that perspective. “Some people make it sound like it’s extraordinarily difficult to go out on your own—that it’s something that can’t be done today,” he says. “But is it really that difficult? No. Credentialing is a pain in the butt, but you just do it once. Billing and insurance companies are a burden, but if you have even one person to help you with that, it’s quite manageable. I know how to do the coding, and I keep up to date so I know I’m doing it correctly. If a claim is rejected, we treat it as a learning experience. We figure out why it was rejected and adjust. The rejection rate we had the first month was astronomically different from our current rejection rate.
“What about MIPS?” he continues. “If you have the right EHR software, it’s built into the system. You just click on some buttons. Besides, if you’re just starting a practice, you won’t even be part of MIPS until you start generating some Medicare revenue.”
Dr. Stock says that although he’s heard horror stories about doctors having difficulty getting onto insurance panels, that has not been his experience. “I can’t say how hard it might be in different parts of the country, but I’ve gotten on every panel I’ve applied for,” he says. “A few needed a bit of harassment. One gave me the runaround for months. But eventually, with persistent calling, I got through to the right person. If you bug the right person enough, it’s less painful for them to let you onto the panel than give you a reason to continue bugging them.
“Southern California or New York City might be different,” he admits. “However, I know of many solo eye doctors in southern California. The reason they went into solo practice was that the area was so saturated that no practices wanted to hire them. They’ve done fine. I’ve seen many solo doctors get onto insurance plans, even in densely populated areas.
Access to the latest advanced equipment can be a challenge for solo practitioners, especially when starting out. Alternatives to purchasing the equipment include joint purchases with nearby practices, buying refurbished equipment (from reliable sources) and partnering with local institutions that will allow doctors access to their advanced equipment, such as the Phillips Eye Institute in Minneapolis (above).
“If you’re really concerned about taking on these challenges yourself, you can hire a consultant to help you,” he adds. “But after doing this myself, I can tell you that managing these tasks is significantly easier than any of the medical training we go through.”
Dr. Stock says he believes the real problem isn’t that these tasks are difficult to do, but that doctors may not be up for dealing with another learning curve. “I suspect that once doctors finish their training, they want to just be doctors,” he says. “They’re not looking for more learning curves—but that’s not a good place to be if you want to run your own practice.
“I think many more doctors would go out on their own in a second if it didn’t seem like such a high barrier,” he adds, “but the prospect of another learning curve keeps them from going off on their own.”
The Benefits of Teaming Up
Jennifer Loh, MD, who started her own private practice with a focus on cataract and refractive surgery three years ago in Miami, is in a hybrid version of private practice that allows her to maintain control of her practice while working in concert with a number of other private practices (and a few small group practices) to share some of the burdens associated with insurance and government regulations.
“We’re a group of individual practices that have joined together to operate as one large mega-group,” she explains. “We all bill under the same tax ID. There’s a central business office, where all the billing, claims, denials and so forth are managed. However, in terms of day-to-day operation, each practice is run and managed by an individual doctor. The doctor sets his or her own schedule, is responsible for recruiting patients and managing the employees, and the practice is its own profit and loss center.
“Basically, the benefit of being part of this group is that we have some economy of scale in certain key areas,” she continues. “Most important, we have the benefit of being considered a large group for insurance purposes. Especially in an urban area like south Florida, it’s almost impossible to get onto insurance panels as a solo doctor. Most insurance companies won’t even speak to you unless you’re part of a big group. I have a colleague who’s on his own; he started his own practice about six months ago. He’s only been able to get on two insurance plans, after trying and trying and trying.
“Of course,” she adds, “if you’ve already been in practice for 20 or 30 years, this isn’t an issue because you’re already on the insurance panels. But if you’re a solo practice starting new, pretty much the only way to get in is to join a group practice—at least in this part of the country.”
Dr. Loh notes that the group also alleviates some of the paperwork burden by managing some processes centrally. “The group has a centralized billing department that handles all claims and denials,” she explains. “We also have a human resources manager who oversees issues with individual employees. We’re able to use technology like ADP to manage our payroll, and we have a good EHR system and a group IT expert. As a solo doctor, I wouldn’t be able to afford that level of personnel expertise. But because of the way this arrangement works, I’m still able to control my own schedule and life, and the way I practice.”
Dr. Loh says one limitation of this particular arrangement is that the practices in the group don’t share equipment. “For one thing, we’re all at different locations, pretty far apart,” she says. “The other factor is that when the group was initially formed, most of the practices already existed and owned their own equipment. I’m one of only two practices that came into existence after the group was formed. So, I’m responsible for buying all my own capital equipment. But at least we share some of the overhead relating to human resource expenses.”
Strategies for Starting Out
Surgeons offer these tips for those thinking about going solo:
• Choose an auspicious location for your practice. Being in the right location can make an enormous difference in terms of getting on insurance panels—which is much harder to do in an area crowded with doctors offering the same services as you. The right location can also minimize competition and make you easily available to patients who need your services.
Being in a small town can help. “It’s tough to compete inside a major metropolitan center where big consolidations are occurring,” notes Dr. Lindstrom. “I’m a fan of what I call ‘exurbia’—the areas about 60 to 100 miles from the center of a metropolitan area. In some of those smaller communities you have a better opportunity to be successful as a solo ophthalmologist. When you encounter complex or specialty-care patients you can send them to specialists in the nearby metropolitan area. I think this creates a pretty ideal situation for a solo practitioner.”
Ms. McKillop notes that being in the small town of Loveland, Colorado, has limited the competition they face. “The one competing ophthalmologist in town joined a larger group to our north,” she says. “The bigger practice has many MDs and several satellite locations. They’d undoubtedly like to dominate this market, but we’ve got our own niche, and we’re doing fine.”
She adds that the practice’s physical location in town also works to their advantage. “We’re located on Highway 34, which is the main artery in and out of town,” she says. “Forty thousand cars drive past our big sign out front every day. That helps remind everyone that we’re here.”
• Think about how to set yourself apart from other practices in the area. “It’s important that your practice stand out in some way,” says Ms. McKillop. “It’s not always easy to figure out how to do that, but as a small practice, offering personal service is a good place to start.”
• Consider narrowing your focus. Dr. Lindstrom notes that many of the larger, high-volume solo practices focus on one practice specialty, usually cataract surgery; they refer most of the other sophisticated subspecialty care out. “Often they do cataract surgery and refractive-cornea along with glaucoma,” he says. “They refer out retina and the like. That means they don’t need all of the sophisticated equipment that a glaucoma, cornea or retina specialist needs.”
Resources for Solo Practitioners
• Offer a service that’s needed by the population in your area. William B. Trattler, MD, director of cornea at the Center for Excellence in Eye Care in Miami, and a volunteer faculty member at the Herbert Wertheim College of Medicine at Florida International University, points out that your chances of success in solo practice increase if you’re focused on a specialty that’s in demand. “If your practice specializes in glaucoma or neuro-ophthalmology in South Florida, your services are needed because there are low numbers of these specialists here,” he says. “On the other hand, if you’re a general ophthalmologist, finding patients may be a bit harder. So your subspecialty may impact how likely it is that you’ll succeed as a solo doctor.”
• Don’t worry too much about affording expensive equipment. Dr. Loh says that, in her experience, this isn’t a major hurdle. “Like any business, you can take out a loan,” she notes. “And you can buy used equipment. I’ve purchased lots of refurbished equipment from a reputable dealer, and it works really well. Besides, if you’re going into private practice, you can start small. You may not have the biggest office, with every gadget in the world at first, but you can slowly grow.”
Dr. Lindstrom adds that in some settings there are other ways to gain access to advanced equipment. “Here in Minneapolis we have something called the Phillips Eye Institute,” he says. “It’s an open-panel institute that individual ophthalmologists can join. The institute has a diagnostic center with all the advanced diagnostic instruments and lasers, and a great OR environment. That gives ophthalmologists access to the best equipment without having to purchase it.”
• Consider sharing an ASC with other solo practices. “In my opinion, being on the facility side is very important, but it’s a rare solo practitioner who can afford his own ambulatory surgical center,” says Dr. Lindstrom. “Typically, a group of five or six solo ophthalmologists get together and build an ASC that has one or two ORs. Ideally, everyone owns 10 or 20 percent of the ASC. Then, one doctor uses the OR each day. I think that’s a pattern that makes sense.”
• Build your practice from the top down. “Make sure you have an exceedingly strong managing partner and an exceedingly strong administrator, working together to operate the company in challenging circumstances,” advises Mr. Pinto.
Dr. Lindstrom agrees. “Hire a high-quality advisor/consultant, a good attorney and a good CPA,” he suggests. “Sophisticated help with the business side is becoming more important.”
Ms. McKillop notes that having a good billing department is essential. “If you can’t bill for your services and collect for them in a timely manner, you won’t have a chance of succeeding as a solo practitioner,” she says.
• Be aware that advice from academic doctors about practicing may be based on limited experience. “I got a lot of good advice from community doctors that my attending doctors thought was questionable, but they work in two different worlds,” Dr. Stock points out. “Academic doctors are wonderful people with impressive knowledge and skills, but most of them have limited knowledge about running a business. So if you need advice, try to get it from doctors who are in the same situation you’re in.”
Once You’re Up and Running …
These strategies can help ensure that your solo practice thrives:
• Make the most of being able to offer personalized attention. “Personalized service is something we can offer that the big practices can’t,” notes Ms. McKillop. “We often hear from our patients that they didn’t like going to the bigger practice in town because it was too impersonal. Here, there’s always someone smiling at the front desk, and patients know the names of the technicians that are working them up. If patients end up having to wait longer than normal, we get them some cookies. A big practice can’t do that.
”The bottom line is that we make sure that our patients are taken care of and receive personal attention,” she says. “That’s one of our biggest assets.”
• Offer cash-pay procedures. Dr. Trattler points out that offering self-pay procedures can help provide a bulwark against declining reimbursements. “One solo practitioner I know is an oculoplastics specialist who also does cataracts,” he says. “He offers self-pay oculoplastics procedures such as Botox and cosmetic lid surgery. These help to offset the low rates he gets with the insurance companies.”
“Patients appreciate that personalized, private-practice type
— Jennifer Loh, MD
• Make sure your facilities are always being used. “Most solo practitioners can benefit from having one or more optometric employees,” notes Dr. Lindstrom. “When you’re in the OR or on vacation, the optometrists can be seeing patients in the office. It’s really hard to make solo practice work economically if the office is empty, or the ASC sits empty.”
• Arrange your affairs to ensure that you’ll have access to capital when you need it. “You’ll be practicing in a business environment with greater volatility,” says Mr. Pinto. “Don’t draw every last penny out of the practice as your salary. You have to be setting aside reserves for dealing with unforeseen challenges.”
• Stay on top of your practice’s business details. “As the owner of your practice, you have to stay informed about everything that’s happening on the business side of things,” Mr. Pinto says. “If areas are unfamiliar to you, do your homework.”
• Be willing to put in as much time as is necessary to keep the practice thriving. “As ophthalmologist John Corboy has observed, if you’re not smarter than the other guys, you have to work harder than they do,” says Mr. Pinto. “Since all ophthalmologists are pretty smart, in the years ahead you’ll have to work harder at all levels—focusing more intensely in the clinic and working longer hours when necessary.”
• Remain flexible so you can respond to changes. “Tennis players about to receive a serve hop from foot to foot,” notes Mr. Pinto. “They’re preparing to be able to spring off in any direction, and that’s what you have to do as an ophthalmologist. You have to be ready to lunge to the left or right or run forward to stay with the profession, wherever it’s heading.”
Mr. Pinto notes that the demand for eye-care services is increasing at four to five times the rate at which the population is growing, while the number of ophthalmologists is remaining flat. “Ophthalmologists really are in the drivers seat, in terms of choosing the professional context they’d prefer to operate in,” he says. “I think ophthalmologists will continue to be able to write their own ticket for many generations to come.”
Dr. Lindstrom says that while he sees a future for solo practice, it’s probably not the ideal model going forward unless you’re fiercely independent. “I think the ideal model will shift more towards a group practice, such as four to six MDs who own their own ASC,” he says. “I suspect the number of solo practitioners will shrink over time, but they’ll continue to be a significant part of the field. They’ll need to be nimble and make wise choices, but I think they’ll do just fine.”
“I think most doctors would actually prefer to be in private practice,” adds Dr. Loh. “Most private practice doctors are happy; they like having their own practice. Furthermore, I think there’s a need and a desire for it. Patients appreciate that personalized, private-practice type of care. So if being in private practice is truly your dream, I think it’s still possible, and I think it’s well worth it.” REVIEW