More and more final-year medical residents are looking to employment. According to a recent Merritt Hawkins’ survey, the majority (94 percent) prefer employment with a salary in their first practice rather than an independent practice income guarantee or loan. The major reason for this is significant student loans, closely followed by the five reasons below:
1. Financial Security
According to the survey, many employers have loan forgiveness programs that allow young physicians to reduce their debt burdens in a tax-advantaged manner. Many graduating physicians want to get rid of significant loan debt, not add to it by starting a practice. Employed positions ensure a steady paycheck and often include other benefits such as steady stream of patients, health insurance, paid time off, profit sharing and retirement plans.
2. Startup Costs
Startup costs for new clinicians can be cost prohibitive and easily exceed $100,000. Costs can include labor associated with hiring a staff, rent or mortgage of the facility, medical malpractice and health insurance, billing and EHR systems, furniture, equipment and other items. Young physicians with existing debt and little-to-no credit history, find it difficult to secure the funds necessary to get a practice started.
3. Government Regulations
Understanding and dealing with governmental regulations can be daunting. In order to be compliant with CMS, new practice owners have to know how to navigate the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-based Incentive Payment System (MIPS), and Meaningful Use criteria.
4. Lack of Training to Run a Practice
According to the survey, about half of residents shared they did not receive any formal training regarding how to start and operate a practice and other business issues such as contracts, compensation and reimbursement models. Most young physicians feel unprepared to handle the business side of medicine when they leave medical school or residency.
5. The Ease of Getting an Employed Position
Due to the significant physician shortage, jobs are quite plentiful. In fact, many primary-care residents received over 100 job solicitations during the residency training. The Merritt Hawkins survey reports that this category has not been this high since they started surveying in 1991.
The Other Side of the Coin
While some find the work-life balance they need in an employed relationship, many physicians enjoy the scheduling flexibility that comes with being a practice owner. The autonomy to set your own schedule can be more easily achieved as an independent. Owning your own practice has many other perks such as determining how many patients to see and how to provide the best care for them. An independent physician is in charge of office protocols, hiring and firing instead of being subject to the actions of a non-medical administrative board when caring for patients.
Reversing the Trend
Many experts agree that education is the key component to getting more physicians interested in starting their own practice. The business of medicine needs to be taught in medical school and throughout residency. Most providers complain that they didn’t get an adequate education in this area. Some medical educators are concerned that adding the business dimension to medical education may encroach into valuable time training residents.
So much of the stress that physicians face today, comes from a complicated payment system. Some believe that fewer regulations could also entice physicians to open their own practices. According to one expert, compliance takes time and money. The fewer the regulations, the more money a physician has to work with and the more time he or she has for patient care. And the more money a physician can generate, the fewer patients they will need to see to reach their financial goals.
While there are lots of reasons why physicians aren’t pursuing independent practice nowadays, doing so still has some advantages and new practice models exist. As new physicians consider their options for their next career move, revenue cycle management services provided by AssuranceMD can help pave the way.
Source: Physicians Practice