Today’s post will talk about the nuts and bolts of running a solo private practice. My primary focus in my career is helping and healing my patients, but a close second to that is running a successful business. If I go out of business, I’m not going to be able to help anybody.

There are frequently news articles that talk about how much money doctors are paid for various procedures and services. I think it’s easy to get confused and think that these payments are equal to the doctor’s take home salary. This is not necessarily true.

Like any business, the profit (i.e what I take home as the business owner/physician) equals the revenue minus the expenses.

My revenue is all the money paid to me for seeing patients and performing services including in-office and surgical procedures. Some of this comes directly from patients but the large majority comes from third party payors (Medicare/Medicaid and private insurance companies). For certain types of physicians like cosmetic surgeons or docs who have cash-only practices, all or almost all of their revenues would come directly from patients.

My expenses come from a variety of different sources. I pay rent for my primary office in Kyle and also to lease space in other doctors’ offices in San Marcos and Lockhart on the days I travel to those locations. I have 2 full-time employees and 1 part-time. I also pay for the services of a billing specialist whose services are shared with Texan Allergy.

After those major expenses, there are numerous smaller expenses. These include marketing costs, malpractice insurance, monthly fees for my electronic medical record and billing computer software, office and medical supplies, telephone and internet service, franchise tax, accounting services, service fees for my audiology provider, and other costs.

Eventually, it all adds up to approximately $27000 per month, or $324000 per year. So, I have to bring in $324000 each year before I earn a dime. And I have a small, lean practice for which I very deliberately watch costs and keep my expenses low! It would be very easy to have much higher expenses if you go out and buy a bunch of the latest fancy equipment or hire too many employees.

Over the past 25 years, payments to physicians have been fairly flat or even decreasing relative to inflation. The expenses have continually risen though, and at a much higher rate than inflation for much of that time. In the 1970s and early 80s, it was easy to become wealthy as a physician. Now, it is still possible but requires business savvy and the discipline to save and invest rather than blowing it all on fancy cars and other grown-up toys.

The ever-increasing expense of running an independent medical practice (with the stagnant or decreasing revenue) is the reason many doctors are becoming employees of large corporations or hospital systems. The situation is particularly difficult for primary care doctors and other non-procedural specialties, who tend to have lower reimbursements than proceduralists like myself. With the increasing regulations and red tape over the past few years, it will be interesting to see what happens to the independent practitioner over the rest of my career.

I love being my own boss and being able to serve my patients as I see fit. I hope to continue my practice as long as I can.

As I mentioned last week, I spent several days at a medical education course in Kiawah, SC last weekend. The course was put on by the Medical University of South Carolina ENT department and had a total of 15 hours of educational time. The idea behind this conference was that experts in the various sub-specialties of ENT would review the medical research published in the last year and present the 5 or so articles they thought were most relevant to general ENT practitioners (such as myself).

For anyone who doesn’t know, all doctors are required to spend a certain number of hours per year in continuing medical education. The number and type of hours depends on which state one lives in and which specialty one practices. For me, I am required to take 25 hours per year, of which at least 60% needs to be ENT-related. In addition, the state of Texas requires 1 hour of ethics credit per year.

Frequently, the courses are located in nice vacation spots so that doctors and their families have fun things to do while not in the lecture room. Kiawah, SC is a beautiful resort island south of Charleston and has nice beaches and golf courses. My parents drove down from Virginia to meet me for the weekend and my Dad and I got to play the world-famous Ocean course, host of the 2012 PGA championship!

It was a lot of fun and we both played pretty well for such a hard golf course.

Anyway, what were my impressions from the course? Overall, I thought it was somewhat useful. Since it was a full overview of all subspecialties of ENT, there were some segments which were not very relevant to my day-to-day practice, mainly the facial plastics and reconstructive surgery sections.

The most helpful areas for me were the talks on rhinology (sinus), pediatric ENT, sleep medicine, and general ENT subjects. Here are some little tips and tidbits I plan to implement into my practice in the future:

1. I will start using gauze soaked in 1:1000 epinephrine during sinus surgery to help control bleeding. This apparently is a dramatic improvement over the conventional way of using Afrin-soaked gauze.

2. I will think more strongly about offering adenoidectomy to children older than 4 who need ear tubes. A recent study showed benefit in reducing ear infections and need for future sets of tubes in this age group.

3. I will continue promoting the use of oral appliances in sleep apnea patients, especially those who are unable or unwilling to regularly use a CPAP mask.

4. I plan to start using Hubbard ear tubes in certain adult patients with otitis media. These are short-lasting tubes which usually fall out 4-6 weeks after placement. For people with non-resolving ear infections which do not yet meet criteria for regular tubes, these are a good option and will provide enough middle ear ventilation to cure most patients who don’t have a long history of ear problems.

Overall, it was a pretty interesting course and I learned some good information to help my patients in the future.