Associateship
For younger physicians, establishing an
expense-sharing relationship with another
physician in the same specialty can be mutually
rewarding. In such an arrangement both
physicians agree to maintain their own solo
practice and to share office expenses (rent,
staff, etc.) in a proportionately acceptable
way. The details of this relationship do not
necessarily require a formal legal contract, but
a written outline in the form of a memo-
randum of understanding should be signed by both
associates. In the case of an associa-
tion with a senior physician, the benefits for
the younger practitioner being in practice
with an established physician include an
opportunity to obtain easier community recog-
nition, a chance to learn the management
aspects of a medical practice, a readily avail-
able consultant, and a way to keep operating
costs down at a time when income levels
are just building up. For the senior associate,
such a relationship provides the benefit of
having a covering physician readily available,
providing an opportunity for more leisure
time. It also lowers operating costs at a time
when income may be declining, since it
occurs in the last phase of professional life.
Very often, an associateship can lead to a
partnership; in such a case, a contract
providing full details of the nature of the arrange-
ment concerning the division of both income and
expenses is essential.
Acquiring a Practice
Another way to establish a solo practice is to
purchase one from a retiring or relocating
physician. One can secure a practice in which
the potential can be estimated based upon
the practice's past performance. It is
important to get an accurate assessment of the
value of such a practice, which calls for an
analysis of income, assets, and liabilities.
Group Practice
This is the second most popular form of
practice. It is defined as three or more physi-
cians, who provide medical care, jointly using
the same facility and personnel and
dividing the income as agreed to by the group.
A group practice may be a corporation, a
partnership, or an association of solo
practitioners, but the majority of group practices
are corporations. This arrangement provides a
legal mechanism to protect the assets of
the corporation from being seized in the event
a member of the group is sued for mal-
practice and loses and cannot make full
restitution from personal assets.
The number of group practices is increasing
because they provide several advan-
tages. They allow for a pooling of expenses for
facilities, technical support services, and
equipment, all of which come from a common
revenue base. In other words, where the
purchase of a piece of expensive equipment,
such as an MRI machine, by an individual
radiologist may well be prohibitive, a group
can more readily afford it. This is because
groups have the financial resources and space,
and can use expensive equipment more
fully to make it pay off. In addition, patient
loads can be juggled easier so that, when
one group member is occupied, another can be
made available to the patient. The group
members can easily schedule night coverage,
vacation time, and emergency care.
Members of a group work shorter and more
regular hours than solo practitioners.
When a group has five or more members, income
is on a par with that of physicians
who are self-employed. In a successful group, a
business manager may be hired to han-
dle the many time-consuming bureaucratic
aspects of an active practice and also super-
vise and coordinate personnel activities. Also,
in a group practice, each physician has
colleagues available to consult when
necessary.
There are some negative aspects to group
practice, such as the loss of independence
by being a member of a group. Also, major
business decisions regarding purchasing
equipment, hiring or firing personnel,
renovating, relocating, or expanding facilities
require a consensus. For a group to practice
successfully requires a compatibility of per-
sonalities and professional outlooks. Also, as
implied above, in groups that are smaller
than five--which is very common--income levels
may well be lower than those of solo
practitioners, since the number of patients may
be restricted to space and personnel limi-
tations.
User Comments Add a comment…