What to Settle Before You Leave Employment to Open Your Own Practice
Independent practice is harder than it was and still possible. Physicians who plan the exit, the finances, and the first year carefully give their new practice a real chance.
An employed internist is tired of productivity targets, schedule templates she did not design, and decisions made by people who have never seen her patients. She starts sketching a practice of her own on the back of a napkin. The idea is sound. Independent practice is harder than it was a generation ago, but physicians still open successful practices every year. The difference between those who thrive and those who retreat is usually preparation, not talent.
Start With the Exit
Before you plan the new practice, understand how you leave the old one.
- Review your employment contract for notice periods, noncompete terms, and restrictions on soliciting patients or staff.
- Confirm how malpractice tail coverage is handled and who pays for it.
- Understand your rights to patient records and how patients will be notified of your departure.
- Ask a health care attorney to review your obligations before you tell anyone.
Leave professionally. Give proper notice, complete your charts, and avoid disparaging your employer. Your reputation will travel with you into your new practice.
Traditional fee for service, direct primary care, concierge, hybrid, and specialty focused models each carry different economics. Payer contracting and credentialing can take months, which affects cash flow. Membership models avoid some of that friction but require building a panel willing to pay directly. Talk to physicians running each model in your region and ask them what they wish they had known.
Most new practices do not fail from lack of patients. They fail from running out of money before patients arrive.
Build a Realistic Financial Plan
Estimate startup costs for space, build out, equipment, EHR, staffing, insurance, and legal and accounting help. Then estimate monthly operating costs and how many months it will take to reach break even. Be conservative. Plan to fund personal living expenses for that entire period, since you may not pay yourself much at first. Many physicians secure a practice loan or line of credit before they open so they are not scrambling later.
Engage a health care attorney and accountant early. Decisions about entity structure, payroll, and compliance are easier to make well at the start than to fix later.
Plan the First Year
- Begin payer credentialing and licensing tasks as early as your contract allows.
- Hire a small team you trust, and consider an experienced office manager your most important early hire.
- Choose technology that fits a small practice rather than an enterprise system.
- Tell referring colleagues, community organizations, and former patients, within legal limits, where you will be.
- Set simple monthly metrics, such as new patients, collections, and days in accounts receivable, and review them together.
Expect the first year to be demanding. Many physicians who make the leap say it was harder than they imagined and more rewarding too. Autonomy has a cost. For the right physician, with the right plan, it is a cost worth paying.
Dr. Whitfield is a family physician and practice owner who writes about independent medicine and physician leadership.
This article is for professional education and does not replace clinical judgment. Treatment decisions should be based on the individual patient and current guidelines.
