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Can a Physician Practice Outside a Hospital?

After years of working in a hospital setting where you always have to rely on the terms stipulated in your employment contract, compensation varies based on the employer that owns the hospital you are working in—you would want to set out on your own or with other physicians with the same goal as you.

For all healthcare professionals, deciding between working at a private practice, finding employment through a hospital, or for physicians—opening their own outpatient clinic—can be a difficult decision-making process.

All three have pros and cons that they carry with them along with their own benefits. However, if you are thinking of working at a private practice, you would want to consider that they are profitable organizations. They only make up 20 percent of the total number of hospital facilities in the United States.

If you can see yourself practicing independently—without the constraints brought about by a binding contract—you can start your very own private practice.

What is a private practice?

Private practices are structured similarly to the way corporations are—there can be one or more owners—in this case, physicians—running the facility. In private practices, staff members make the workload lighter and the range of services the facility provides larger.

In private practice, physicians hold more will when it comes to making decisions. They can decide based on their personal and professional preferences. This part makes it highly distinctive from hospitals where contracts bound physicians. They are supposed to do things the way the hospital wants them to.

Physicians having their own practice have full control over the technology they will use, the payment methods, and other administrative matters that physicians will not have access to in a hospital setting.

How does it help doctors?

Private practices can be a place of learning for physicians. In a setting such as this, doctors will have the opportunity to gain skills and knowledge on subjects beyond the scope of medicine.

A case example is when you are a physical therapist who envisions working free from the constraints of hospitals. You would first want to learn how you will transition to private practice, if you can have other medical professionals who are willing to venture with you, or if you want to do it alone. After, you would want to learn how to start your own physical therapy business. All that would involve you learning about marketing, finance, contract obligations, administrative management, and more.

Since you will be practicing independently, you would not have an entity arranging everything for you. Running the private practice would be your source of income and a way for you to practice your specialization.

Moreover, private practice has less pressure in terms of the environment. They are more relaxed, and the policies are set by medical experts rather than corporations. Some patients report that private practices are more friendly to families compared to hospitals.

physician holding a syringe

How does the income factor in?

Opting for private practice would mean more income for you because you would not be splitting fees with another entity such as a hospital. You will not have to pay for the facility, equipment, and utility use if you own your practice.

Simply put, hospitals put a cap on what physicians can earn to evoke a sense of fairness and equality through charging them—their own employees—for using their in-house equipment.

In private practice, physicians have the freedom to control their earnings a bit more than they can when working at a hospital.

What are the downsides of private practice?

In private practice, being the owner or co-owner puts you at the top of the practice’s food chain. Therefore, if you want to move higher, it will not be possible. But if you are in private practice because of the independence you longed for, would that matter?

There can also be problems with competitiveness among physicians in private practice. If they try to diversify their specializations, they would be pitted against each other while vying for patient consultations that rake in income.

Another issue with a private practice is that they cannot offer rates as competitive as the ones stipulated in contracts written by hospitals. Private practices rely on physicians making up for the facility and equipment use through the fees paid for their service. If they fail to offset, the result would be a loss of revenue for the private practice.

With this knowledge in mind, one can consider if practicing outside a hospital is the right path to take. A well-informed decision can come a long way.

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