Congratulations. After years of class work, lab work, late night cram sessions, grueling rotations in residency and a heap of student loans, you’re finally out of school and ready to begin practicing medicine. There should be smooth sailing from here, right? Well, no resident or new physician is naïve enough to believe that. Everyone has heard a horror story or two about surviving the first few years of practice, but plenty of doctors have done it and so can you. Hopefully, some of the resources listed here along with the advice of colleagues and the support of your academy can help you avoid some of the troubles that arise when you first open for business.

In 1999, Ann Snyder, M.D., finished her residency at Creighton University in Omaha, Nebraska, moved to McKinney, Texas, and opened a solo practice. The problem—-she had no idea how to do so. “I did not know how to hire employees, or fire them,” she says. “I did not know about worker’s comp, insurance for the practice, … inventory or where to start buying supplies.” She says she didn’t know how to set up a computer system, or what software to buy, nor did she know anything about phone systems or about acquiring and furnishing office space. At times Snyder asked the advice of other doctors in her area, but for the most part, she got the practice going on her own. “I’m seriously considering writing a book on the subject,” she says.

After almost two years of trial and error, Snyder says things are starting to work out, but the list of questions she didn’t have answers to reveals a need new physicians have for resources regarding the business of practicing medicine. Many third-year residents are keenly aware that the road ahead could be rocky and are somewhat worried that they aren’t prepared for this side of medical practice, but where in the already-loaded medical curricula could schools fit classes on business administration? Instead, many new physicians join group practices, presumably so they can learn the business ropes from more seasoned practitioners. An AAFP survey of the practice arrangements of last year’s class of graduating residents shows that nearly 42 percent of those reporting joined family practice groups, 12 percent joined multi-specialty groups, and less than 5 percent opened solo practices.

But joining an existing group isn’t always a bed of roses, as Melissa Gerdes, M.D., will attest. She finished her residency at the University of Texas Health Science Center in Tyler, Texas, in 1999, and took a job with a multi-specialty group of about 100 doctors with offices in the surrounding area. A position had come open at a storefront clinic in Whitehouse, just south of Tyler, and Gerdes was to be the sole physician in charge. Not long after her arrival, the trouble began.

The existing staff were 10 to 20 years older than Gerdes, now 30, and they were set in their ways. All but one have since been replaced. Gerdes says she immediately became locked in a power struggle with her nurse, who was frequently absent from work. Gerdes says she noticed that the nurse was administering allergy shots without monitoring patients for reactions, handing out sample medications without proper documentation and refilling prescriptions without authorization. “You just don’t see that [type of problem] as a resident,” she says, “because you have attending physicians above you taking care of all that.”

Gerdes knew something had to be done, but what? She didn’t know how to fire an employee. “I could think logically, ‘somebody is refilling prescriptions without my authorization—-I should fire this person,” she says. But the group’s human resources department advised her that unless she had stipulated in writing that the nurse was not to do this, it didn’t qualify as a reason for termination.

After two months of counseling and documentation, Gerdes put together a case sufficient for termination, but her employee troubles weren’t over. The next nurse she hired apparently abused the worker’s comp policy, taking two six-week periods of absence in the four months she was employed at the clinic, Gerdes says. Again, the recent graduate built a case for termination.

Web
Resources

The nurse from the temp agency Gerdes brought in next didn’t work out either. “She was filling narcotic prescriptions for her friends without my knowledge,” Gerdes says. Together, she and the pharmacist reported the nurse to the police. “I had quite a baptism by fire.”

Reflecting on the events of those first months in practice, Gerdes is concerned about the lack of business resources for new physicians. In her position as a member of the TAFP Section on Women, Minorities and New Physicians, she has tried to raise awareness of these problems. So far, the focus has been on developing a Web-based question and answer forum and a network for resources, but for Gerdes, attending academy meetings has helped to put her in touch with many physicians she can go to for advice.

Another problem Gerdes experienced along with many other beginning physicians is getting on the provider lists of insurance companies. Gerdes says she was turning patients away just when she needed to be building her practice, waiting as long as six months to be listed with some companies. Some experts say this process could take as many as nine to 12 months.

Paula Rentiers, president of Reliant Healthcare in Austin, says this hurtle frequently leaves new physicians with a cash flow problem since much of their initial business has to be classified as out of network. “They’re all excited and ready to get out there and practice and then they have to learn the business side. It can be kind of a slap in the face sometimes.”

She advises starting the process of managed care contracting as soon as possible. If you know where you intend to practice, get a head start by gathering the necessary applications and collecting the required information before finishing your residency. That way you can send in the applications on the first day of your new job. Rentiers suggests calling the contact on each application to ask where they should be mailed and sending applications via certified mail to ensure they are received. Having someone on staff who is familiar with this process can be an invaluable asset.

For new physicians planning to join an existing practice or a physician group, negotiating employment contracts can be another area of distress. According to Dorothy Merriwether, director of practice management for Triad Hospitals, Inc., it doesn’t have to be. She says the two most important steps doctors can take to make sure this process goes well are to get the contract in writing and have legal council review and explain it. “You don’t know how many times I hear doctors say, ‘oh, I didn’t understand that. If I had, I would never have signed it,” Merriwether says.

At the national level, the academy has been looking at ways to help. The New Physicians Subcommittee of the AAFP Committee on Special Constituencies recently suggested topics for educational seminars to be presented at future AAFP conferences that target credentialing and employment law issues, and the committee is developing a tele-mentoring program to give new physicians more access to academy leadership roles. The academy also produces two excellent publications, “From Residency to Reality” and “Welcome to the Jungle” to help residents prepare for the challenges ahead. Both of these publications can be ordered online at the AAFP Web site.

Phillip Palmer, M.D., a new physician delegate to AAFP who practices in Oklahoma City, Okla., says, “New physicians today are unique in that they are much more likely to change practices than new physicians were 15 or 20 years ago.” In those days, doctors were likely to open shop as sole proprietors and stay there for most of their careers, he says. But in today’s marketplace, many doctors go into employed positions, become frustrated with some part of those jobs and decide to look for something better. Many of the same issues they faced starting out arise yet again. “We are going to be proposing to [the national academy] that there need to be resources available to help these physicians as they change their practices,” Palmer says.

Another AAFP publication with loads of helpful information is Family Practice Management. You can search the archives of this magazine and pull up full-length articles online. (For all Web addresses mentioned in this article, see Web Resources)

For help with employee related questions, start your research at the U.S. Department of Labor Web site and its section on Employment Laws Assistance for Workers and Small Businesses. The Texas Workforce Commission site is also helpful regarding state employment laws. It is very important that you make sure your practice meets state and federal regulations such as Occupational Safety and Health Administration (OSHA) regulations, Health Care Financing Administration (HCFA) and Clinical Laboratory Improvement Amendments (CLIA) guidelines.

For residents entering their final year of training, Methodist Hospitals of Dallas puts on a free, two-day program in October that covers everything from marketing a new practice and hiring staff to billing, coding and OSHA regulations. The seminar, called PREP, (Program for Residents Establishing a Practice), draws around 150 attendees, and according to Susan Cogburn, manager of physician services for Methodist Hospitals of Dallas, it has been quite a success. Cogburn says she mails around 1,000 invitations to residents across the nation, so watch for them in June or July.

Starting any business is difficult, but with the level of liability and the mountains of paperwork involved in medical care, starting a practice can seem nearly impossible. Look to those who have gone before you. The academy is full of success stories waiting to be told, and before you know it, the next round of new physicians will be looking to you for advice.