Differentiating Among Medical Practice Settings
Published: Oct 13, 2011
Career Resources articles posted on NEJM CareerCenter are produced by freelance health care writers as an advertising service of the publishing division of the Massachusetts Medical Society and should not be construed as coming from the New England Journal of Medicine, nor do they represent the views of the New England Journal of Medicine or the Massachusetts Medical Society.
Career Resources Editor’s Note: About half of all new physicians will change jobs or practice settings within five years of graduation, which suggests how difficult it is for physicians entering practice to envision precisely the lifestyle and work-family balance requirements that various practice environments entail. Dialogue with colleagues already in the practice environment to which you aspire is critical, as is networking with mentors and senior physicians who know colleagues in such settings.
— John A. Fromson, M.D.
By Bonnie Darves, a Seattle-based freelance health care writer
Carefully assessing your needs and exploring practice-setting options raises your chances of early-career satisfaction.
Fifty years ago a physician completing his residency had relatively few types of practice opportunities to consider. The physician could stay in the academic or public health environment, go into private practice, or join an established group practice. Even 20 years ago, an internal medicine physician completing a residency likely wouldn’t have counted a staff-model HMO among top employment options.
Times have changed. Today, the resident heading into the job market has a myriad of practice options, ranging from the traditional private practice to large integrated delivery systems with hundreds of affiliated physicians. For that reason, it is helpful for graduating residents and fellows to obtain a basic understanding of the various types of practice settings available before starting their job search — to ensure they choose a setting that suits their career and personal objectives.
As a good starting point, Patrick Alguire, M.D., head of education and career development for the American College of Physicians-American Society of Internal Medicine, urges residents to first assess their personal preferences and their financial picture before looking at settings. “Physicians leaving residency need to consider their financial debt and how much of a risk they’re willing to take,” says Dr. Alguire, a former residency program director. “That, and their particular needs regarding autonomy and decision making, should figure into their choice.”
Following are descriptions of the most common types of practice settings and their lifestyle characteristics, as well as some of the perceived positives and negatives associated with each:
Private Practice. Also called solo practice, this setting is self-descriptive. The physician practices alone, without partners or other affiliations, usually with minimal administrative or clinical staff. Today, only about one in five residents chooses solo practice. The solo practitioner handles all aspects of the practice, from patient care to paperwork, regulatory compliance and financial management. “The primary benefit of solo practice is that the practitioner is in complete control and makes all the decisions,” Alguire says. “But that might be seen as a disadvantage, too, because making all the decisions is a lot of work.”
In addition, solo practice generally entails more financial risk than other types of practice. Overhead is usually higher than in group practices, and because their patient base is relatively small, solo practitioners may be more acutely affected by economic and market factors. Rural areas are often the best place to operate a successful private practice, due to minimal competition.
The lifestyle of a solo practitioner depends on the practice structure and the desired income. In general, because the physician handles a substantial amount of the paperwork and, usually, all of the calls, solo practice may entail long work weeks and little time off. Some solo practitioners join independent practice associations (IPAs) to access advantages of a large physician network, or develop relationships with other local solo physicians to lighten on call duty and arrange weekend and vacation coverage.
A successful solo practice requires no specific training and education, but it helps to have financial management skills, good organizational abilities and a willingness to accept risk.
Group Practice. Group practices, single- and multi-specialty, make up the majority of physician practice settings. As the name implies, the environment is characterized by sharing of patient care duties and physical space. Group practice is generally viewed as less volatile than solo practice and more likely to afford a controlled lifestyle.
“The main advantages of group practice over private practice are the increased financial security and the ability to have more control over your lifestyle,” Dr. Alguire says. In addition, physicians have the added benefit of access to colleagues and mentors for help with tough diagnoses. Dr. Alguire notes, however, that “autonomy usually decreases as the size of the group gets larger.”
Compensation methods vary widely, but in general compensation is higher in single-specialty practices than in multi-specialty practices, and most group practices employ a compensation method that includes a salary and some type of productivity bonus or incentive.
In the group practice environment, special training or expertise in certain procedures or diagnoses can be a selling point.
Staff-Model HMOs. Similar in structure to a large group practice, this setting is based on the traditional employment model. Physicians serve as salaried employees of an HMO and provide care only to a defined group of the HMO’s members or beneficiaries — often referred to as a “panel of patients.” In general, clinical care delivery is dictated by the HMO, and physicians follow clearly defined practice protocols.
Of all the practice settings, this one might be the least risky financially and the most predictable from a lifestyle standpoint. Physicians earn a guaranteed income, work fairly regular hours, and are largely relieved of paperwork and regulatory burdens. “Many physicians also find that staff-model HMOs offer convenient patient care — easy access to diagnostics and other services that small practices couldn’t afford,” Dr. Alguire says.
Compensation is fairly standard: Physicians receive a salary and, often, some type of incentive bonus based on productivity, patient satisfaction or both.
No special training or expertise is required, but managed care experience is valuable.
Other HMO Models. One variation on the staff-model HMO is the reduced-fee-for-service or group-model HMO, in which physicians serve as contractors rather than employees. Typically, the HMO contracts with a group of physicians on either a capitated (per-member-per-month payment) or defined fee-schedule basis. Physicians are salaried and may receive a bonus for providing cost-effective care. One benefit is that the patient flow is guaranteed by the HMO. In network-model HMOs, the health plan contracts with two or more physician groups, which often also have a patient base separate from their HMO panel.
Integrated Delivery Systems. In an integrated delivery system (IDS), the hospital and its affiliated clinics serve as the hub for care delivery. IDSs are typically formed around either a teaching hospital or a community hospital system, and the physicians are usually IDS employees.
By virtue of its community standing, the IDS offers many benefits, including income guarantee, academic appointment and a good benefits package. The direct access the IDS affords to management services and support personnel can be a plus for physicians just out of residency.
For physicians seeking autonomy, IDS employment has its drawbacks, namely the hospital policies and politics that can spark controversies. In addition, some newer IDSs are still learning how to manage physicians, and their learning curve can cause occasional issues.
Hospital-Based Practice. In these settings, physicians work in practices or departments that are managed and owned either outright or partly by the hospital. Physicians serve as employees and are compensated by the hospital. Benefits of this arrangement include predictable income, a steady patient base and the built-in referral network via the other hospital-based practices. Also, many physicians enjoy the setting’s camaraderie and its proximity to “the action.”
As might be expected, heavy committee work often comes with the turf, says Dr. Alguire, so physicians should inquire about such requirements up front. “It’s a good idea to find out what committee work will be expected, and the extent to which that work will affect your patient hours,” he says.
Potential downsides are the limited autonomy and the possibility that a decline in the hospital’s overall financial condition could affect the practice. And as hospital-system mergers continue to occur, physicians sometimes find themselves caught in the crossfire as the merging institutions attempt to meld long-established programs and cultures.
Locum Tenens. For the physician who desires practice and schedule flexibility, or who wants to “try out the market” before making a decision, locum tenens — essentially temporary physician employment — may be ideal. Physicians are employed by an agency to work for a short period of time, from a few weeks to several months. Locum tenens physicians have the ability to choose not only the practice setting and where they practice geographically but also how much they practice. Compensation is competitive with permanent employment, and the agency typically picks up the costs for malpractice insurance and licensure.
Locum tenens work is best suited for physicians who are independent-minded, somewhat entrepreneurial, and willing to take the risk that work might not always be steady. In addition, locum tenens generally don’t receive benefits such as health care coverage and retirement plans, which means the physician will need to have a knack for handling personal finances and investments, or be willing to hire a professional.
It is not always possible to choose the ideal practice setting the first time around, and about half of new physicians change their job or practice setting within five years of graduation. But physicians who take the time to assess their needs and explore their options before deciding on a setting are more likely to make a good choice — one that will bring career satisfaction.