Employment vs. private practice: Factors influencing spine surgeons’ decisions

Practice Management

Spine and orthopedic surgeons' decisions on where to practice is a consequential one whether they go to a hospital or a private group. Amid economic headwinds and workforce challenges in healthcare, the choice holds more weight than ever.

Both options have many key considerations to know.

Considerations for hospital employment

1. Orthopedic surgeons are paid on average more in a hospital setting compared to a single-specialty or multispecialty group, according to Physicians Thrive's 2023 Physician Compensation Report. Hospital employed orthopedic surgeons earned $675,000 while single-specialty group surgeons earned $650,000. Multispecialty physicians earned $663,000.

2. Hospitals will have to strategize and execute smartly in 2024 to rebound from rising expenses, according to Moody's. Stabilization is already starting, however, as revenue growth is outpacing expense growth in October, according to KaufmanHall. Discharges have also increased 5% in October, and average lengths-of-stay dipped 7%. This news bodes well for spine and orthopedic surgeons who have already leveraged outpatient surgery and minimally invasive techniques.

3. It might be harder for spine surgeons to feel connected in a hospital employed setting, according to Peter McCunniff, MD. He stepped away from a hospital to work in private practice this year.

"Despite significant efforts and extra time devoted to creating a spine program in the hospital employed set up, I found that there were still significant barriers to having a successful spine practice due to the disconnect between administration and those of us tasked with building a new spine program within a large healthcare system and also being productive spine surgeons throughout the process," he told Becker's. "Spine surgery is different from both general orthopedic surgery as well as general neurosurgery. The large healthcare systems are able to engulf practices with those broader scopes and apply basic templates that are easily adhered to within their established system with relative success, but there's more nuance involved in elective spinal surgery that those general orthopedic and neurosurgical clinic templates will set the spine surgeon up for failure."

4. Noncompete contracts in private practices, hospital partnerships or hospital employment may cause rifts if surgeons want to pivot their careers. The majority of physicians — 87% polled by Doximity — support the Federal Trade Commission's proposed rule that would ban employers from imposing noncompetes. This year noncompetes were points of conflict for some spine and orthopedic surgeons. 

Considerations for private practice

1. ASCs are a bright spot for independent spine and orthopedic practices. Minimally invasive spine and orthopedic techniques are growing, and the technology to support it is robust. The outpatient setting also provides opportunities for specialization and increased efficiency, according to Akshat Gargya, MD.

"The outlook for independent ASCs is generally favorable and promising," Dr. Gargya told Becker's. "ASCs are known for providing surgical care at a lower cost compared to hospitals, have shorter patient stays and lower overhead costs, making them a cost-effective option for many surgical procedures … Reimbursement rates for ASCs have been improving over the years, making it financially viable for physicians to establish and operate independent ASCs."

2. Overhead for private practices can be tighter. For physicians who start their own practices, they have to manage or oversee business operations along with clinical duties. Dwindling Medicare fees may put additional strain on surgeons working independently from a hospital.

"Inflation, rising costs (rent, staff, supplies), and declining reimbursements will continue to create difficulties for practice management for all private practice physicians," Arjun Saxena, MD, told Becker's. "Unfortunately, I do not see any of these trends reversing. In order to maintain their small businesses and their autonomy, something will have to change. Orthopedic surgeons will need to expand ancillary capabilities and seek partnerships they may not have discussed in the past."

3. Consolidation or taking private equity investments have increased among orthopedic practices looking to scale. However it can be a double-edged sword. Some orthopedic surgeons say practices can benefit from the resources and tools gained from these partnerships, but others are wary about its long-term viability, especially for younger surgeons.

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