Establishing a Private Practice
Physicians seeking to establish a private practice are sometimes disarmed by the relative ease of creating a legal entity. But there are numerous factors that should be considered before choosing the appropriate organizational model. Some of these factors are:
- The number of owners now and in the future
- Owner expectations
- Tiered leadership authority and accountability provisions
- Buy-sell provisions
- Whether or not to use debt financing
- Treatment of non-owner physicians (employees or independent contractors)
- Individual flexibility in pension and tax planning
The failure to anticipate all possible future issues can have serious consequences for the entity and the ownership. The most prudent course of action is to work with a consulting firm like HPC, which has led groups through this process many times before.
Proactive Conflict Management
One of the most common errors is failing to anticipate conflict and provide a strategy for addressing it. You and your colleagues will need to be able to balance the desire of the ownership to have input to group decision-making with the necessity to maintain group focus and agility if you are to satisfy the expectations of your hospital client.
Even if the physicians have worked together for years, the transition from staff physician to practice owner and from department Medical Director to CEO will fundamentally alter even long-standing relationships. Disputes and serious disagreements are inevitable so the best course is to provide for them in advance.
Make the Most of the Opportunity
HPC’s co-founders represent a unique resource to physicians (and hospital administrators) seeking to establish local practices to provide hospital-based clinical service. Dr. Hellstern’s and Robert Fielder’s experience in the creation and management of hospital-based physician practices are unmatched in the field and are available without a long-term management services obligation.
If you’re ready to start a local practice or need help re-focusing one, HPC can help!