Medical Economics magazine has published its annual physician income survey. In a nutshell, income growth is slow, less than inflation overall, and by working with another physician or physicians, whether in an expense-sharing arrangement or group practice, income per physician rises.
Bigger paychecks reflect several advantages enjoyed by larger groups. They’re often in a stronger position to negotiate fees with insurers. They can raise more capital to invest in income-producing ancillary services such as diagnostic imaging. And they may be able to lower overhead per doctor through their collective buying power and shared resources
Of course, not all physicians are leaving solo practice. As with any other profession or business, money is not what always drives people. Solo practice offers freedoms and independence that diminishes in a group setting. Partnering with another physician is like a marriage — the partners have to work out issues of decision making, expenses, hiring, work habits, call, and so on. In short: Money and power. So, for a bit more than one third of primary care physicians, solo practice remains their choice.
The takeaway: Your first decision is whether or not you want to be in a group or solo; if in a group, whether a small group or a larger one.
Regardless of size, increasing income year to year is harder to achieve with each year. the Medicare cuts take effect, 2008 is likely to see a drop in income. As part of your budget plan, you need to have a plan in place to deal with the Medicare cut, whether a staff layoff or reduction in total hours, cutting some discretionary expenses, freezing wages, and taking some of the cut yourself.
You are likely to have no choice but to assume some of the cut yourself — cutting your staff and expenses can make it more difficult for you to maximize your volume of services and billings. It’s a bad situation — don’t make it worse.