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 Practice Settings: What's Available?

Physicians coming out of residency today have a variety of different practice settings to choose from. Which one you select will depend on a number of different factors—including but not limited to your geographic preferences, your need for autonomy, your business acumen and your specialty.

Below is a description of some common practice settings and their relative advantages and disadvantages.

GROUP PRACTICE

The majority of residents coming out of residency today opt to join group practices. There are some 20,000 group medical practices in the United States today, according to the Medical Group Management Association (MGMA), ranging from three physicians to several hundred physicians. In all, more than 250,000 physicians work in medical groups.

There are two basic types of medical groups—single-specialty and multi-specialty groups. Multi-specialty groups generally feature a mixture of primary care physicians and related specialists, often either internal medicine specialists or surgical specialists—occasionally both. The primary care physicians often serve as a referral source of patients for the specialists in multi-specialty groups. The specialists offer the primary care physicians a convenient resource for consults and help maintain continuity of care for patients by keeping treatment under the same roof.

While there are advantages to multi-specialty groups, incomes in these groups per physician tend not to be as high as in single-specialty groups because overhead is higher. Also, political rifts between specialists and primary care physicians in multi-specialty groups are not uncommon. Often, the specialists feel they are "footing the bill" for the primary care physicians, and the primary care physicians may feel that they are relegated to "junior partner" status because the revenue they generate is not as high as that generated by specialists.

New physicians coming out often seek group practice because there is a common impression of "strength in numbers." They see groups as providing the stability, call coverage, collegial atmosphere and clinical backup that they need coming out of residency. Groups generally provide a salary and some sort of bonus based on production (see the “Contracts” section of our Resource Library). They frequently also have established patient base and referral patterns, so that new physicians don't have to build a practice from scratch.

Groups also provide the key administrative support needed to code, bill and collect on claims submitted to third-party payers. This has become an increasingly important function in medical practice as reimbursement has generally decreased and payers such as Medicare and managed care challenge and deny more claims. These claims are typically submitted electronically, requiring more sophisticated information technology systems than physicians have used in the past, which groups can also provide. There is also the issue of contracting with managed care plans, scheduling patients, compliance with regulations such as HIPAA, capital investment, marketing and related business management issues. Many groups hire practice managers with business backgrounds to handle the "business side" of medicine.

For these and other reasons, group practice can be a positive setting for new physicians.

The downside for some new physicians is that like new attorneys entering a law firm, they may find their "junior" status not to their liking. That is because in some groups work and income are not shared equally. This is a key sticking point for many group practice physicians—income distribution formulas often change as physicians seek equitable ways to "divide the pie." Regardless of how the pie is sliced, some physicians often end up with a bigger piece than others, and usually these are the established partners.

There are other issues to consider as well, such as who gets the insured patients and who gets the uninsured or under-insured patients, as well as who works the most hours, who has access to the financial records, who gets to work with the most competent nurses and other staff members, who decides how the group will be governed, etc. There is also the question of path to partnership—how clear is the path and is true partnership really attainable?

What new physicians sometimes encounter in group practice, or sometimes perceive, is that they are getting the worst of everything. Again, this is definitely not the case in many group practices, but new physicians must be cautious when approaching groups to ensure that income distribution, work distribution and other factors are divided equitably. The reality is, however, that these are ongoing challenges in most groups and that controversies over "dividing the pie" are simply part of the territory in group practice.

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