Physicians: Private Practice Vs. Hospital Employed

Doctors trying to decide whether to work in private practice or in a hospital setting must research their options carefully. There are many factors to consider, such as cost, earnings, desired responsibilities and what type of experience they wish to provide to their patients. Knowing the pros and cons of each type of practice will help a doctor make the best employment choice.

Statistics

• According to the latest government figures, 12% of physicians in the U.S. were self-employed in practice as of 2008. 53% of doctors employed in a salaried position worked in the offices of other doctors while 19% worked in hospitals. Other doctors practiced in various government capacities, in outpatient centers or educational capacities.

Trends

• From 2005 to 2008, the number of physician-owned private medical practices has been dropping from around 66% to less than 50%, and researchers say the trend is continuing downward.

Benefits

• The benefits for a medical doctor to working in private practice include a more personal experience for patients and greater earnings potential. Benefits to working in a hospital include lower overhead, paid health and malpractice insurance coverage and a work week closer to 40 hours.

Considerations

• Medical doctors in private practice are responsible for earning every dollar they make, and overhead costs, self-funded retirement and malpractice insurance coverage can take a big bite out of earnings. Hospital-employed doctors may have less leeway in making important decisions regarding patient management, in addition to generally lower salaries.

Trends

• Experts say the trend away from private practices to hospital practice is primarily driven by the desire to reduce medical error frequency and also because of changes in government reimbursement. The push is also due to the rising use of electronic health records which, due to their high costs and time needs, lend themselves better to larger, more financially able organizations like hospitals, as opposed to smaller private practices.

Incomes

• General practice physicians earn a median income in the U.S. of approximately $166,000. Specialists earn even more, such as anesthesiologists, who make around $344,000. These represent salaried positions, such as in hospitals. Doctors in practice could have similar or wildly different earnings, depending on the amount of overhead in their particular practice situation. Where a doctor chooses to live and work has a bearing on salaries, and even rent, if considering private practice.

Potential

• According to the Bureau of Labor Statistics, doctors looking for the best employment opportunities should research rural and low-income areas. Overall, employment for physicians is expected to grow more than 20 percent from 2008 to 2018.