Buying a pediatric practice
I’m considering buying a small pediatric practice and have a ton of questions, particularly for those who have experience owning an independent practice vs. working for a large hospital system.
The practice I’m looking at currently gets by with one provider per day. My goal wouldn’t necessarily be to see 30+ patients a day—I’d ideally like to have a sustainable practice where I could see something like 20–25 patients/day and still make a good living.
One of the things that attracts me to private practice is the potential upside beyond just physician compensation: greater control over my schedule and how I practice, the ability to build something that I could eventually sell, potentially hire another physician and generate income from the practice as I approach retirement, and potentially having more flexibility with retirement contributions/tax planning.
On the other hand, a hospital-employed position has some pretty significant advantages: excellent health insurance, multiple retirement plan options, stability, and potentially better insurance contracts because of the size of the organization.
So I’m trying to understand how significant those differences really are.
For those who own or have owned a small pediatric practice:
Can a small independent pediatric practice still be profitable without seeing 30+ patients/day? With increasing overhead, what kind of patient volume do you realistically need?
How much worse are insurance contracts for a small independent practice compared with a large hospital system? Is the difference actually significant enough to materially affect profitability?
If a hospital system has better insurance contracts and generates more revenue per visit, does that actually translate into significantly higher compensation for the employed pediatrician, or does most of that additional revenue get absorbed by the system?
How significant is the difference in vaccine pricing? Do large systems get substantially better pricing because of volume, and does that meaningfully affect the profitability of an independent pediatric practice?
For those who have been practicing for many years, how sustainable is high-volume pediatrics long term? If you’re seeing 30–40+ patients a day, does that become significantly harder to sustain as you get older? Do you find that owning a practice gives you more flexibility to gradually reduce your patient volume, or does the financial pressure of ownership make it difficult to slow down?
More generally, how much do you think the benefits of ownership outweigh the stability and benefits of being employed by a large system?
I’m trying to figure out whether a small practice like this can be a good business while still allowing the owner to have a reasonable lifestyle, rather than simply creating another job where I have to see a very high volume of patients to make the numbers work.
Would really appreciate perspectives from pediatricians who have actually owned or operated an independent practice.