As a result of the ongoing physician shortage, physicians have more employment options than ever before. While it’s great to have options, it’s also important to have a good framework for how to evaluate those options so you can make the best choice for your medical career path.
When it comes to choosing the right job, one of the most important things to evaluate is how a medical facility is run—what the ownership model is, what the priorities are, and what is expected of you as a provider. The type of facility you choose can have a significant impact on not only your daily practice, but on your medical career path as a whole.
Here are some of today’s employment trends for physicians, and strategies to help navigate those options to forge your best medical career path.
Understanding different types of ownership models
Different ownership models—like private equity, corporate-owned health systems, or private medical practices—have different standards when it comes to clinical autonomy, compensation, and work-life balance. It’s important to understand each of them, so you can determine where you really want to be.
Currently, the breakdown of ownership is:
- 42% physician-owned: medical groups that are owned independently by a physician or group of physicians
- 30% corporate-owned: medical groups that are owned and operated by a for-profit corporation; this includes private-equity-owned groups, which account for an increasing amount of corporate-owned facilities
- 28% health systems: medical groups that represent a network of healthcare organizations under one non-profit management structure
In the past decade, the landscape of healthcare has shifted dramatically. Five years ago, less than 15% of healthcare groups were corporate-owned. Today, corporate-owned medical groups make up 30% of healthcare facilities.
Private practice offers the most autonomy for physicians, but also comes with a greater administrative burden. As a physician at a private practice, you’re responsible for running your own operations and maintaining the financial health of your practice. Health systems offer more resources, but often involve more bureaucracy than a private medical practice. And corporate ownership may come with a high payout for physicians selling their practices—but that payout will likely come with less autonomy.
The rise of healthcare consolidation through private equity buyouts
Healthcare consolidation is not new. However, over the past decade, private equity buyouts have increased in prominence. The business model of private equity firms typically involves buying, restructuring, and reselling companies. In healthcare, this often looks like buying out smaller medical practices and combining them to reduce inefficiency and increase their profitability, before selling them in three to seven years.
Buyouts can be an attractive option, especially when many physicians are finding it more difficult to make it on their own. While revenue is increasing by nearly 10% each year, expenses have jumped almost three times that, leading to a lower net income. In fact, the main reason physicians sell their practices is the need for higher reimbursement rates than they are able to negotiate on their own. With those numbers, it’s not hard to understand why more and more physicians are opting to sell their practices.
Buyouts can be especially lucrative in specialties that have been immune to the larger trend of healthcare consolidation, like dermatology, nephrology, emergency medicine, ophthalmology, orthopedics, pain management, physical rehab, and psychology. Physicians may also be able to negotiate an increased stake in the company, which can lead to more income down the line.
But while buyouts can be lucrative, it’s also important to understand the tradeoffs. The tradeoff that often comes with selling your practice is the loss of autonomy, including:
- Clinical autonomy: the ability to make decisions you feel are best for your patients;
- Schedule autonomy: the ability to determine what schedule works best for you, your family, and your patients;
- Strategic autonomy: the ability to determine the strategic direction for your practice
That might look like having less control over the hours you work, or facing pressure to increase patient volumes—which may lead to an increase in poor patient outcomes. It’s also important to note that while doctors selling their practices receive large upfront fees, other physicians may see a decrease in salary.
In addition, physicians often have to sign non-compete agreements, which can make it difficult to leave the new practice if it doesn’t turn out to be the best fit. For physicians in this situation, locum tenens can be a great option, as it allows you to continue practicing in different locations without needing to relocate or violate non-compete agreements
The importance of knowing your priorities when it comes to your medical career path
Just like different ownership models have different goals, so do physicians. That’s why it’s important to understand your priorities and goals, so you can decide what type of facility is best for you.
If autonomy is most important to you, private practice might be the way to go. If consistency and a stable income are your goals, an established health system may be your ideal option. If benefits are your priority, you might look for a large, corporate-owned medical group that comes with a top-tier benefits package. If you have a passion for medical research, an academic hospital will allow you to pursue that passion more than private medical practices or other health systems. If work-life balance is your goal, full-time locum tenens will allow you to choose when and how often to practice.
How does locums fit into your medical career path options?
Locums physicians can be employed at any of these types of facilities. You can also be full-time employee at any of these locations, or own your own practice, and choose to supplement your income with locum tenens jobs.
As a locum physician, you may be insulated from many of the drawbacks that accompany different types of medical facilities. For example, there is typically less bureaucracy involved in locums, because you’re only at a hospital on a temporary basis. You also have less of an administrative burden, because your responsibilities are limited to patient care. But if you’re concerned about any of the factors above, you can communicate that to your consultant. They will factor in any preferences when finding locum tenens jobs for you.
Like any other healthcare employment model, locum tenens has benefits and drawbacks: it’s great for physicians who want autonomy and work-life balance. If you prefer not to travel, it might not be your first choice—but your consultant can also look for jobs within driving distance of your home.
Even if full-time locums isn’t your first choice, it can be a great option if you’re in a time of transition. If you’re moving jobs or relocating to a new area, locum tenens can help tide you over during life’s changes.
Healthcare is changing fast. But the good news is that the market favors physicians—which means that doctors have more employment options than ever before. Understanding the benefits and drawbacks of different practice models—along with your own priorities for your medical practice—can help you make the best decision.
