The solo road less traveled

A bad business-choice, many say, considering changes in the medical world. Others say, it makes all the difference.

By Robert Calandra, Contributing Editor

Not that long ago a doctor fresh out of residency could hang out a shingle and open a solo practice.

Not today.

Most young doctors coming out of training, whether general or specialty medicine, are strapped with enormous debt and can’t risk the financial uncertainty or staggering costs associated with starting a solo practice. So many opt join a group practice or work as a hospital employee.

But one medical specialty is still producing solo practitioners: Ophthalmology.

Why us?

Ophthalmologists, it seems, are among the last in a vanishing breed – the medical entrepreneur who prefers working for him or herself.

“There is still a market out there for the well managed, well run, entrepreneurial ophthalmologist to own and operate a solo practice,” says Lawrence Geller, vice president of consulting services for Medical Management Associates in Atlanta. “There are still a lot of solo practitioners out there.”

Getting an exact fix on that number isn’t easy. Even Mr. Geller, whose job is helping doctors set up solo practices, says he doesn’t have any hard figures to support his claim.

But, almost every year the American Academy of Ophthalmology invites him to speak about exit strategies for solo practitioners at its annual meeting. Wait, doesn’t the popularity of his presentation mean that solo practices are fossil fuel in the making?

Ch.. ch.. ch .. changes…

Absolutely, says Jai G. Parekh, MD, MBA, managing partner of Bar-Parekh Eye Associates in northern New Jersey. While it’s true that ophthalmologists didn’t aspire to join a group practice 10, 20 years ago, the medical landscape has changed, he says.

“Given the changes in health care over the last several years, and in the [future] I think that there is no doubt that solo practitioners are definitely going to be dinosaurs.”

But not everyone agrees with Dr. Parekh, either for professional reasons, or from a human nature vantage point: some ophthalmologists have an adventurist spirit.

Why us? Part II

Medical Management Associates used to assist doctors in myriad specialties in starting up solo practices. That business has fallen off dramatically – except for ophthalmology. “Not that there is a great rush to” open solo practices, Mr. Geller adds.

Going solo remains viable for an ophthalmologist for a couple of reasons. First, hospitals aren’t, for the most part, gobbling up the specialty’s practices. As specialties go, ophthalmology isn’t as lucrative as say cardiology, neurology, or oncology. (A Medscape survey shows ophthalmologists earning, on average $292,000; orthopedic surgeons, 421,000.)¹

But flip that coin and you’ll find ophthalmologists don’t need hospitals either. All they need is a surgical center to do surgery.

“Many practices now have their own surgery center,” Mr. Geller says.

The second reason a solo practice is still viable is that an ophthalmologist gets the best kind of referrals – patient driven, word of mouth.

“It’s important to know your market and to understand how patients are generated in your market,” Mr. Geller says.

That is true, says John Pinto, a consultant to the specialty. Ophthalmic professionals must “understand the trajectory of their own local market.”

“[Solo practices will] have a tough time flourishing, but they will survive,” he says. The reasons: Smaller practices are more nimble and can respond faster to changing conditions. And “Smaller practices often have owners who are highly engaged with management details, and are thus under better control than larger practices where practice owners take a hands-off approach.”

Today’s solo practitioner is likely to have a past. Once the domain of eager, young physicians coming out of training, today’s new solo practitioner is often in his late 30s or early 40s who has left academia, a hospital, or large group practice.

“These days …. the typical start-up involves an ophthalmologist who wants to have total control of [their] own destiny,” Mr. Geller says.

No Bus 101 along with Cell Biol 304

Med school doesn’t supply opening-your-own-practice training wheels: Starting a business is not taught during medical training. So while money, or lack there of, is an issue, and therefore extends to trying to get a loan for start-up costs, a budding entrepeneur cannot count on help from his professors and mentors who likely know next to nothing about the business side of medicine.

“No one ever talks to you about starting your own practice,” says Ho Sun Choi, MD, who owns Santa Clara Ophthalmology, in Santa Clara, Calif. “No one has had that entrepreneurial experience. If residents were exposed to the world of solo practice and given some sort of mentoring I think a lot more would go into it.”

Natasha Herz, MD, agrees. “I loved my program, but they didn’t have practice management or business aspects of practicing ophthalmology incorporated into the curriculum.”

Neither doctor had any encouragement, but it didn’t stop them from going solo out of residency. Dr. Herz bought Kensington Eye Center, in Rockville, Md., from its prior owner; Dr. Choi struggled to raise start-up money for a brand-new practice.

“When your last year’s tax return shows that you made $30,000, nobody is going to want to give you a $200,000 loan,” says Dr. Choi, 36. “You have no track record plus you have no business experience.”

But he persevered. He invested his savings, borrowed $100,000 from his parents and convinced a lender he was good for a loan.

Dr. Choi also started a blog, documenting his every step. “If I screw up and crash and burn,” he wrote early on, “you learn what not to do. If I am successful this is the guidebook for you to follow.”

Five years and more than 400 blog posts and 110 followers later, he has created a “how to” solo practice guideline.

Dr. Choi says the key to solo success is controlling costs. Aside from a receptionist, Dr. Choi has no staff. No office manager, technician or front desk staff.

Four years in, Dr. Choi works 45 hours a week. On a typical day he sees 15 or 16 patients, which is about 75% of his maximum capacity. He spends 40 minutes face-to-face with new patients and 20 minutes with old patients. As for income, Dr. Choi says he is doing just fine.

Dr. Herz says that by her second year she was self-sufficient, “drawing a full salary and paying all the bills.” She has an office manager, two technicians, one optician and two part-time front desk personnel. Her secret to reaching early solvency was having the ophthalmologist she bought the business from, an “established physician, vouch for me.”

Choi agrees that being a solo practitioner isn’t for everyone. The start-up takes perseverance, judging by the blog entries, and demands lots of time and patience — mostly because you won’t have many patients to start. The key, he says, is to start small and control costs. Spend the absolute minimum without compromising or sacrificing quality of care.

The biggest reward of being a solo practitioner, Dr. Choi says, is not that you get to provide good, quality care; for him that’s a given. His compensation is the relationships he is developing with his patients that he hopes will be lifelong.

“It has to be in your heart,” he says. “It is not for everybody.”

Group practices rule

Dr. Parekh commends his peers who’ve been solo practitioners for more than five years. “I give them a lot of credit.”

But he never wanted to join them. He knew from the start that working in a group practice was what he wanted. It’s a strategic advantage and he loves the lifestyle.

“From an intellectual point of view, having the ability to run patients by [a peer] and have another set of eyes in the practice that you can trust, is nice.”

Dr. Parekh also saw the changes in medicine and insurance practices “coming down the pike.” Those changes are reshaping the specialty and medicine in general.

He disagrees with Mr. Pinto and Dr. Choi. “The days of the solo practitioner are gone,” he says. “They’re going to be numbered pretty soon in terms of contracts, strength in the community, getting patients, and getting insurance to pay what you want.” The strength is definitely going to be in numbers.

Group practices, Dr. Parekh says, can deal better with new government and private insurance forms, arrangements and guidelines, particularly the movement to value-based payments, by which doctors receive reimbursements on outcomes as opposed to the number of patients seen.

Another advantage: overhead. Dr. Parekh says larger practices can better absorb the price of new equipment, technology and staff. And with solo and smaller ophthalmology practices being bought out by larger groups, competition for new patients will only get tougher.

“The mid-life ophthalmologist who is 15 years out in a solo practice and realizes that he or she is losing contracts .... it is more difficult running the practice and they are tired,” he says.

It’s even harder, Dr. Parekh says, for doctors nearing retirement who’ve stopped attending meetings and don’t keep up with local insurance patterns or hospital requirements. That may be why Mr. Geller’s exit strategy lectures are so popular at the annual Academy meeting.

For some solo practitioners the answer is to merge with or be acquired by a larger group practice.

“You are a well-compensated employee with good benefits and no administrative hassles so you can focus on patient care,” Dr. Parekh says. “You have to give up some control for that but it is a risk-benefit ratio.” OM

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