Over the past decade, the field of ophthalmology has seen a multitude of advancements and innovations, along with its share of challenges and changes. Between the proliferation of private equity practices, the rise of clinical research in the private sector, and lifestyle considerations, the choice to pursue private practice has become increasingly difficult.
We spoke with Timothy Murray, MD, MBA, FACS, who serves as founding director/CEO of Ocular Oncology and Retina of Miami Florida (MOOR), to garner his opinion on the viability of opening a private practice in today’s climate and to glean advice on how to do so successfully.
Can you tell me about your path to private practice?
Dr. Murray: I joined Bascom Palmer Eye Institute in 1991. I got an MBA in 2005, and then went into private practice in 2012. I went into private practice in ocular oncology, which no one is doing at all anymore. The reason for that is that ocular oncology requires a lot of supportive expertise in your team; you need a world-class echographer and a world-class photographer.
You have to buy high-end equipment for imaging—fundus photography, optical coherence tomography (OCT), OCT angiography, and ultrasound. There's a disincentive financially to go into a complex practice like this outside of a hospital or hospital outpatient department.
Can you elaborate on the challenges of a complex private practice?
Dr. Murray: When I practiced at Bascom Palmer, the average amount billed per patient for a clinic visit was approximately $1,500. In private practice, that same patient, receiving the exact same exam, gets charged just around $300, because in an academic center, there's a significant ($1,200) facility fee on top of the physician's fee, and that supports all of the other structures, like equipment, staffing, and space, for example.
If you're providing subspecialty/specialty care and you don't have the equipment, you're not providing care that meets our standard. But I'm always shocked at how much everything costs; a camera may cost $175,000.
The salesperson will tell you, “Well, you'll make the money back.” And, I want to respond, “I don't know where you practice, but this equipment will never pay for itself.” But I'm not buying it because I'm going to make money on it, I'm buying it because I need it to provide the optimal level of care.
I think if we wanted more people in private practice, we would find some way to support practice development, including equipment—and nobody has an interest in doing that.
What are the biggest issues facing private practice today?
Dr. Murray: The big issue we're facing right now is the battle between private practice and consolidated healthcare. Fewer and fewer people are actually going into private practice. Those numbers have dropped precipitously, and people in private practice now are being acquired by private equity. We have to ask ourselves, “Is it still viable for ophthalmologists to have an independent private practice?”
I estimated that to open my practice ran about $5 million, and so you can either hope that you have wealthy parents, which I did not, or you have bankers that are willing to believe in you. So, I don’t think you're going to see a lot of people going into private practice as solo private practitioners.
If they do go into private practice, it will be with a single specialty group (i.e., all retina specialists). For example, the Mid Atlantic Retina group, which is at the Wills Eye Hospital, is like its own private equity group; its large and well-supported and has a great market penetration.
How do you feel about the rise in private equity?
Dr. Murray: Initially, looking back to the first generational round in the late 90s, private equity didn't do well. However, this new private equity market is acquiring groups of practices and leveraging the numbers within those groups to be able to provide care at a reduced cost to the practice.
If you get acquired by private equity, you tend to get a large upfront payout and then remain at that practice, though you're really no longer running it; you are an employee. And, if you're not one of the practice owners, meaning you are not yet partnered, you may get stuck in a situation where everybody else gets a lot of money during the acquisition, but you don’t receive any of the big money, and have no possibility to advance.
Can you address the new opportunities for clinical research?
Dr. Murray: I tell the younger doctors now, “You can do as much clinical research in the appropriate private practice or private equity group as you can in academics.” It's a game-changer. The only people who insist you have to stay at an academic center are the ones who are doing cellular or basic animal research, where you have to have facilities that most private practice and private equity groups don't have.
One of the big private equity groups in ophthalmology is RCA. RCA has said, “Not only are we going to provide private practice, but we're going to be a clinical trial center.” They are broadly associated with some of the top clinicians in the country, so they have an easy way to develop and accrue patients for their clinical trials.
When I started, the only research done in clinical trials was done at academic centers. Right now, the majority of research, by far, is being done in these clinical, private practice, and private equity models.
What observations can you share about the younger generation of ophthalmologists?
Dr. Murray: I feel often that, with younger ophthalmologists, lifestyle influences their decision. And, I must say, for me, lifestyle played no role. When I went to Bascom Palmer, I went because I thought it was the best place in the country. I was a single young man, and I essentially lived in the hospital—if you needed a patient to be seen Friday night or Saturday morning or Sunday, I was the guy.
A lot of the younger clinicians would say, “No, I'd like to work 4 days a week. I really don't want to work on the weekends.” If I would have said that, the people who were interviewing me would have fallen over.
So, it's definitely a different focus for some of the younger people, and I think that has allowed them to think about joining a group in private equity where you, typically, get a very good upfront salary, but you never buy in. You're never going to have ownership, but you're going to be a great employee.
What advice do you have for early-career ophthalmologists?
Dr. Murray: If I were to give two pieces of advice, the first would be to know your passion. Learn yourself, know what you want, and where your passions lie, and then look and see what setting best aligns with that. Believe it or not, many doctors have gone through high school, college, medical school, internship, residency, and fellowship, but haven't spent a lot of time thinking outside of their training environment.
The other piece of advice would be that the most important aspect, wherever you go, is the people around you. So, when looking at an opportunity, if you say to yourself, “This is a great job, but these aren't the kind of people I would want to work with.” Then, that's not the job. Also, if you are looking at opening a practice, consider an MBA. That was incredibly helpful to me.
When going into practice, I had to arrange funding through my bank, and they wanted SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) and wanted me to look at different payments. If I hadn't been involved in the finances of an academic practice and had an MBA, that would have been really challenging for me.
Who is best suited to enter private practice?
Dr. Murray: There are so many unique things involved in owning your own practice. There are some people who totally believe “I want to sink or swim based on what I'm able to accomplish on my own”—that's the kind of person you want in private practice.
If you're lucky enough that you have resources, so much the better. I came out of medical school, internship, residency, and my fellowship, as poor as you can be. But remember, I practiced for 20 years, so I was in a very different situation when I went into private practice and was able to find a small boutique bank that was very willing to be supportive.
I couldn't have done it without a good team—a good accountant, a good fund manager, and a good bank.
Speaking of a good team, can we talk for a moment about the importance of having a stellar staff?
Dr. Murray: One of the biggest things I have loved about being in practice is my team. A couple of my MBA professors, who are now my patients, have commented, “This is an amazing practice.” I tell them, “It's an amazing practice because I have an amazing team.”
I have people who are smart, friendly, communicative, and incredibly hardworking. And they are loyal to each other. So, one of the things I love is that we work super hard in this office, but we all work together.
For example, we saw 80 patients in-clinic today, but my staff worked incredibly hard together and nobody left until everybody was done. One of the reasons I'm still practicing is because the people I work with are amazing, so it's a lot of fun.
However, it’s also a little scary. One of the things I think about all the time is, “I can't screw up because I have a huge staff, and if I'm not here, they're not here.” So I do feel a lot of responsibility to my staff, and I feel a lot of obligation that we do a really good job.
Do you have anything to say in closing?
Dr. Murray: There are a lot of worries that come with opening a private practice, but when you're successful, that's a huge accomplishment. You have to be prepared to have some sleepless nights. Hopefully, you've got a family that can be supportive and are lucky enough to have a remarkable team, just as I have.
