The "typical" path to starting a solo ophthalmology practice is to do what I did. I bought a bunch of equipment, rented a space to see patients, hung a shingle, and worked on my practice full time. Everything ended up working out well, and I would do it all again the exact same way. However, the first few months of seeing very few patients made me nervous. Thankfully there are several other ways to open your own practice that can help with risk mitigation. We'll look at a few of those here.
Part Time Veteran's Administration (VA) Job
One fairly common road to independence goes through the VA. I'm sure many of you remember your time at the VA during training. It can be challenging for someone who wants to be independent to have such a substantial administrative burden. However, the VA has a couple of very important items in the pro column. There is no non-compete, it's a great place keep your skills up to date, you get a steady income, and you may qualify for benefits.
The lack of a non-compete is huge. You can put your practice anywhere you want and start out at 4 days per week at the VA. If you're able to consolidate your private practice patients onto one day at first, it will help with your payroll as well. There are few things as anxiety-producing in your first few months than paying staff to do nothing. In addition the VA provides benefits if you work there a certain amount per week. There is a realistic possibility of having the equivalent of full time benefits and a steady income while building your practice.
Renting Space From an OD
This option is very much location dependent. For obvious reasons, not every optometrist is willing to rent their office to an ophthalmologist. However this can be very advantageous to both of you. The optometrist gets to have expanded services in their location and the ophthalmologist doesn't have to shoulder the cost of outfitting an entire office. You'll likely have to at least invest in a biometer, but that may be it. Many optometrists have visual fields, OCT, etc already in place.
This arrangement requires a strong relationship between the OD and MD as well as well-defined expectations. If you go this route, definitely hire a lawyer and have a written agreement regarding payment for the space, the staff (if you can use them as well), and ancillary testing reimbursement. A quick note about testing: the reimbursement is split into a professional component (PR) and a technical component (-26). The PR is yours since you interpreted the testing, but the technical component is typically for the person who owns the machine. It is meant to contribute to the cost of machine purchase/maintenance.
Buying a Practice
Purchasing a practice is a very attractive proposition. It holds the promise of a patient base, full staff, equipment, and possibly real estate. As long as you are able to retain the patients and staff, this is a great way to get busy quickly. If you are already well-acquainted with how to run a business or have a great manager to help you out, this is an excellent option. When purchasing a practice, not all patients or staff will stay. In general around 60% of patients will stay with the new doctor, which is important to factor in to your analysis of purchase price.
There are a couple of important factors in coming up with a practice valuation for purchase. First: when in doubt, hire an expert. If you don't know anything about the process, hiring a professional to value the practice is very helpful. Generally speaking practice owners overvalue their practice and practice purchasers undervalue the practice. Getting an impartial third party involved to come up with a fair price is a good idea to make sure that nobody feels like they got ripped off. Second: hire a lawyer. The purchase agreement will be complex and the cost of a lawyer who is looking out for your best interests is an excellent investment. Third: you are paying for the practice as it is, not what it could be. Do not let yourself be trick by someone who tells you that you ought to value their practice higher because you can build it bigger. You should only pay for what exists right now, not some ephemeral idea that may never be realized. Fourth: the deal isn't done until ink is dry on the page. In this era of private equity, many practice owners are receiving offers that are substantially greater than a reasonable valuation of a practice. There is always a chance the owner is simply soliciting an offer to increase the offer of another buyer.
Full Time/Part Time Job With a Commute
You can, of course, always treat another private practice like the VA. This approach is not ideal. While the VA typically won't care if you have another job on the side, private practices certainly will and will likely have you sign a non-compete (restrictive covenant). You have to be super careful not to run afoul of a non-compete when starting you practice. Few things will make your new business tank faster than a lawsuit from a disgruntled former (or current) employer. Definitely talk this one over with a lawyer. If you do choose to go this route, know that you will likely burn some bridges with this practice and possible their friends as well.
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