Life is full of choices. As ophthalmologists, we are highly trained in decision making regarding the welfare of our patients and their sight. Unfortunately, our residency years in a public health system leave most of us woefully unprepared for one of the most important decisions of our lives: choosing a career pathway. For those seeking to enter private practice, whether young or more senior in years, it becomes increasingly daunting to swap a regular paycheck and generous pension (hopefully) in the public service for the greater unknown in the private sector. Added to this is another dilemma—that of flying solo versus joining a group practice.
Traditionally, many ophthalmologists start out in solo practice, either by forming a start-up or by buying out a colleague seeking to retire. More than 20 years ago, I was lucky enough to buy out a retiring professor, Justin van Selm, MBChB, from his private practice in Cape Town, South Africa; I shall be forever grateful to Professor van Selm for his guidance and inspiration in helping me get started. Most of his equipment needed updating, but the slit lamp was solid (a Haag- Streit unit). The capital outlay for a new refractive unit, A-scan, focimeter, and indirect ophthalmoscope (which was all I needed then) seemed expensive at the time, but it pales to insignificance compared with quotes for the latest so-called must-have diagnostics in an ophthalmic practice today.
Just 10 years ago, eager to learn more about refractive surgery, I returned home to Ireland to join the Wellington Eye Clinic, a group practice of three ophthalmologists. Initially an associate, I became a full partner a few years later. The dynamics of group practice differed significantly from my experiences in solo practice. Each model has its own challenges, and arguments can be made for and against both (Table 1). However, practicing in either of these set-ups can and should be an incredibly rewarding experience.
BUILDING A SOLO PRACTICE
I greatly enjoyed setting up my own solo practice, particularly the autonomy of having full control. However, it was a slow start. To boost turnover, I opened a satellite practice in another suburb a few years later. I soon realized that increased costs and duplication of staff and equipment soaked up my hard-earned gains like a sponge. I was learning about running a business!
Fortunately, I enjoyed a good relationship with other ophthalmologists in Cape Town. We met regularly to discuss clinical problems. Often, our conversations would turn to common administrative and business issues affecting our daily practices. We were all in private practice, but, although in competition, we enjoyed a rapport and respect for one another as colleagues. Our monthly meetings became a great forum to air problems and get free advice in confidence. This collaboration of 12 ophthalmologists led to the purchase of a laser suite of refractive, Nd:YAG, and Argon lasers in the early 1990s, which allowed all of us a taste of laser refractive surgery. We discovered the advantages of collective buying power and, along the way, collective bargaining power— a useful political tool indeed.
Recessionary times will dictate more of this attitude in the ophthalmic community, as there is need for better cooperation and sharing among smaller practices to survive competition from the group model and other adversaries.
Starting out on your own today is not as straightforward as it was years ago. It is easier to take over an existing practice than start from scratch. The decision to go down this route requires proper planning, assessment of catchment area, and profiling of patients, among other considerations. When buying someone out, have a professional check the practice’s books and cash flow records and determine how well it has been managed. There will be capital outlays at the outset and lease agreements to negotiate. A good relationship with your accountant is necessary; therefore, it is advisable to choose someone you can relate to on a personal level. As a one-person show, getting involved in nonclinical aspects of practice can be a fascinating but often frustrating pursuit, unless you can afford to hire an experienced manager. Business acumen will play a major role in the success of your practice. Understanding cash flows and keeping an eye on costs are paramount. The accounts may be outsourced to decrease your staff’s workload, but it is vital to keep a finger on the pulse at all times.
Staff recruitment and training are essential. Your employees are the shop window to your patients and the keepers of your revenue; choose them wisely. Proactively manage fee collection or simplify matters and outsource. Do not involve yourself personally in chasing after bad debtors; you will go crazy!
It may be prudent to consider incorporating or creating a service company to manage your practice, particularly if you own the property. Advice will differ geographically and may depend on local tax laws and value-added tax chargeable in your area. Seek several professional opinions early on. Getting to know your referral base can be fun, and meeting general practitioners and optometrists will strengthen your hand against competition. It is important to familiarize yourself with local medical politics, and never forget to reply to referrals promptly. You will be surprised by the result.
Solo practice can be grand once you get busier and generate a steady operating list; it is very rewarding to have a waiting list. One can feel isolated in practice sometimes, but it helps to develop a collegial spirit with some of your colleagues and sound them out for second opinions and even administrative problems. More likely than not, it will break the ice and pave the way for future collaborations. A big disadvantage of being in solo practice can be holidays and time off. Income stops dead when you are away from the office. Scheduling holidays when business is quiet is not always practical when you have a family and school term times to consider. Additionally, some ophthalmologists may regard the start-up costs of going solo to be prohibitive if they are already burdened with a mortgage and private school fees. With insurance reimbursement for surgery constantly under threat, it will take greater effort (and longer hours) to maintain an acceptable level of income and standards of living.
I found setting up my own practice to be incredibly rewarding, not necessarily from a financial viewpoint but from the perspective of maintaining good relationships with my staff, patients, colleagues, and, best of all, my family. And isn’t that what life is all about? Unfortunately, a life’s work in setting up a successful practice and years of hard, honest work will not reward you one day with much of a golden handshake unless you have been very clever. Good pension planning is a priority from day 1.
GROUP PRACTICE: EGOS VersuS ECONOMICS
The first advantage of the group practice scenario is that you should be relatively busy and enjoy a steady (consistent) salary or monthly draw. Accept the probationary period, because it benefits both the employer and employee. Get to know your principals and how they tick. Find any chinks in the armor. It is also important to get sound and completely objective professional advice on any contract or practice agreement. (For more information, see Drafting an Employment Contract, page 19.) Take time to consider all options, including walking away. A chance to do so later may be more costly.
In a group practice, there will be a more business-like approach. You will be working with colleagues, technicians, optometrists, nurses, and administrators who are all kept in line by a practice manager. The practice manager will orchestrate the marketing and public relations and keep the principals’ heads up regarding cash flows, projected incomes, and tax liabilities. He or she has an important role in ensuring that the practice runs smoothly, delegating responsibilities, dealing with patient interactions, upholding standards, handling motivational issues, and maintaining staff morale. Appropriate person-to-person communication is extremely important within the organization, and e-mail cannot take its place. Dealing with varying personalities is also part of the package. Many different cogs go into making the group practice wheel spin smoothly. You will need to learn to work as part of a team. If you are not a team player, think twice about entering group practice.
In any organization, there will be delegation of responsibility. A lot of spadework and administration are done on your behalf, which allows you to concentrate on your clinical abilities and on generating income for the practice. Diagnostics and scans can be available at the push of a button, saving you substantial time and energy. Group buying power ensures that the practice’s technology is always up to date, which is fantastic for improving the level of care delivered to patients. Subspecialties can flourish within the group, and there are options for inhouse referrals without the fear of losing patients. Patients with combined cataract, glaucoma, and/or retinal problems can be managed seamlessly. You may also have time to consider pursuing a particular interest, developing new skills, or becoming involved in research. It is easy to maintain professional competence points with in-house journal clubs and case presentations. Holiday options should be more relaxed without the risk of lost income, and there will be more time for leisure pursuits and family, assuming the cash flow is in a healthy state.
It is important to have mutual respect for your colleagues and realize early on that you will agree to disagree on many occasions. Fortunately, I enjoy a good relationship with my partner, and we have resolved many issues over the years. There will be inevitable clashes of ego in any organization. My advice is to always play to the group’s strengths rather than dwelling on differences. Working together to find a solution is more effective than casting one opinion against another; however, finding a middle road can sometimes be tricky in contentious issues. If things really turn bleak, you may have to look at the small print in your contract. Your practice agreement should encompass succession plans and an exit strategy to minimize confusion and conflict down the road.
Revenue potential is much higher in group practices. More word-of-mouth referrals can be achieved by promoting your brand on the Internet and with active maintenance of social networking, which can elevate public awareness of your clinic to levels far beyond the capability of a solo practice.
Group bargaining power with the ophthalmic industry and suppliers and with hospitals and ambulatory surgery centers cannot be underestimated. Depending on numbers, a group practice is in an ideal position to invest in its own ambulatory surgery center; doing so can save patients money, unburden you from hospital red tape, and improve revenue for the practice and its principal shareholders. At this level of service, the group organization can dabble in community politics and play an important part in the future of the profession in the local area.
Today’s instant global communication and rapid-fire technology make the economic pluses of the group practice model outweigh many of its disadvantages. The brittle state of our economies highlights the appeal of this model even further. I believe that well-managed group practices have better resources to adapt to the changes facing our profession.
Solo practitioners still play an important role in our communities, but their ultimate survival may depend on improving communication links and forging cooperation and sharing among like-minded specialists, fighting escalating costs, and maintaining excellent standards of service for an expectant patient population that will always demand the best.
Richard Corkin, FCS(Ophth)SA, MRCOphth(UK), is a Consultant Ophthalmologist at the Wellington Eye Clinic & UPMC Beacon Hospital, Dublin, Ireland. Dr. Corkin states that he has no financial interest in the material discussed in this article. He may be reached at e-mail: r.corkin@ wellingtoneyeclinic.com