Tips for Re-establishing Your Private Practice After Leaving a Large Health System



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Maybe you want more control over your professional practice? Maybe the health system has announced plans for a reduction in force? Maybe employment wasn't the panacea you anticipated?

About the Author

About the Author

Maria Todd is frequently hired as a consulting expert and trusted authority on medical business administration. She helps medical groups, individual physicians, hospitals and ambulatory surgery facilities and other healthcare providers with startup, re-establishment, and operations and reimbursement matters.

Maria believes that with the recent changes from CMS that have eliminated the site of service differential, changes are ahead for employed physicians. Learn why she argues that the time to plan your exit strategy is before you need to use it.

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Do you need a way out? If you are considering a departure from the local hospital's health system, this article will offer tips and pointers to consider before taking action.

It can be done

Maria Todd: While well meaning friends, relatives and colleagues may be naysayers, and tell you that once you’ve sold out to the hospital as an employee, that you won’t be able to successfully re-establish your own private practice, yes, it can be done.

The first step is one you should take at the time you are negotiating to sell or leave a private group practice to go to work for the hospital. It’s your exit strategy.  It’s like a prenuptial agreement and the reason for having an exit strategy is that attorneys write physician employment agreements to protect the interests of the employer.  It’s your job to move the needle from all the way to one side to somewhere in the middle. That’s because: 

A. You don’t know if you’ll like working for the health system until you do it for awhile.

B. You don’t know if the hospital will change hands, be acquired, seek bankruptcy protection, or if regulations for compliance will change in the future. 

C. You don’t know if your professional autonomy will be diminished, compromised or otherwise misaligned over time. 

What if you didn’t plan or negotiate a fair exit strategy?

That could be a problem. A big problem. And it might be the reason why others told you “it can’t be done!”. Is your physician employment contract the one with golden handcuffs? Many have non-compete provisions that may (or may not) be enforceable as to duration, distance and scope. A qualified attorney will help you interpret what is fair in your market.  It isn’t a one-size fits all equation. What’s fair in a small town may not be fair in a medium or large city – and vice versa. 

If you didn’t plan or negotiate a fair exit strategy, you may be stuck with what you, a well-read, educated, and responsible adult executed in a contract. That could mean that:

A. You may not communicate your departure and intentions or new location to existing patients, even if they were yours before you became employed. 

B. You may be required to re-establish several miles from your present practice location.

C. You may be required to wait a certain period of time to return to the geographic marketplace where you are known and have established your professional brand and reputation.

D. You may be unable to acquire contracts with health plans that contract with the health system.

E. Your privileges may be cancelled at the hospital. If it is the only hospital for miles, you may not be able to treat patients with insurance plans that require active hospital privileges. In that case,  your new practice may be a direct pay, concierge or just plan self-pay cash practice.  (We can still make it work in some cases – don’t despair – yet!)

What if the hospital is facing bankruptcy, acquisition, merger, or planning a strategic reduction in force?

I’ve taken several calls from physicians facing this dilemma in recent months.  Many hospitals are revisiting their strategy to acquire both primary care and internal medicine specialist physicians and surgeons. This is even more pronounced with the site of service differential that was previously billable and payable for hospital-based clinic visits and services. 

If they are terminating your services and ushering you out the door without cause other than for a change in strategy, how will they handle the matter of severance? What’s due to you? At what payment schedule? Don’t assume you’ll walk with a jingle jangle in your pocket as a lump sum you can use to re-establish a private practice. 

Can they still terminate your privileges? Can they block you from negotiating local payer agreements? What if the health system owns the largest health plan in the marketplace?

If you are terminated, how will you defend your ability to pay a loan without income. Bankers call me all the time to read physician employment agreements to advise them about the likelihood of re-establishing, negotiating payer agreements, and continuity of care of established patient relationships. They know that if a physician has to restart cold, alone, with no contracts, and enjoined from negotiating any payer agreements for a year or more, that the likelihood of approving a loan is slim to none.

Can you buy your stuff back?

If you sold your practice, used equipment and all to the hospital for fair market value, what’s it worth now? If you relied upon lab and imaging services at the health system, where will you source them once you’ve left?

You can find lots of used equipment on “” an international auction site for used medical equipment and technologies. I use this site frequently when the need arises.  But be careful. There are unsavory characters who don’t deal fairly and take advantage of people. Get references. You can also find things you’ll need on Amazon and other auction sites. Also ask reps if they know people who are swapping out or upgrading or selling their practice. You need to keep moving; you need to survive. You don’t need brand new shiny stuff. 

What about branding?

You may have sacrificed your brand by becoming an employee.  Now you must start over. Take time to think through three things:

  1. Who is your ideal customer?
  2. Where is your passion in medicine?
  3. What’s the intersection between the two?
Healthcare branding specialists are rare and they don’t work cheap. Healthcare branding specialists must know the compliance laws and regulations, and they must understand your ideal customer, your acumen and passion in your specialty, and devise a message that tells your “why” story. Why are you re-establishing? That’s a delicate tap dance if your contract has an anti-disparagement clause and you left on bad terms,  especially if there was any local scandal involved. Because then, the story may not be under your care and control. That may take a joint team of healthcare branding and public relations.
You’ll also need a website, logo, tag line, color scheme, stationery,  a marketing plan, a way to connect with patients, a way to announce your return to private practice, a marketing and advertising budget, and fresh, original content in the form of visuals, videos, articles, patient education materials, podcasts, and more.

What about staffing?

You’ll need a biller, a receptionist and a back office assistant.  I set up micro practices all the time with just those three, and even less.  You can outsource telephone answering to a service that is HIPAA trained and ready to handle appointments, inquiries, and all calls day or night,  not just after hours.  There are hefty fines and consequences if you hire the wrong people or people who are on the Excluded Individuals list. 

What about backup and cross coverage?

You may need to arrange cross coverage with physicians you know and trust. But what if they all work for the health system you plan to leave? Will they be able to moonlight?

What about medical records and practice management systems?

Check out the plethora of free office systems. My favorite is OpenEMR. It does everything you need it to do.  And it’s free!

What about pricing of your services?

That’s not as difficult as you may believe. As you proceed through your plan to re-establish and execute on it, keep records of your costs and expenses. You’ll need it for budget, taxes and pricing.
Why pricing? Because if you know your costs for labor, overhead, supplies,  capital, and margins you want for each service by CPT code, pricing is a breeze. 

Good luck and call or write with any questions. 

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Maria is a bestselling author and a top healthcare industry influencer and thought leader. She has excellent references and a huge project portfolio spanning 40+ years in healthcare business development and management.

She holds 25 copyrights, several trademark registrations, and shares several patent applications for software inventions.

She’s been recognized with numerous industry lifetime achievement awards for her work in contracted reimbursement, managed care, physician integration and alignment, and health tourism in the USA and 116 countries. 

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