Is Private Practice Worth It for Physicians?
Posted Jan 14, 2025
Is private practice worth it? Is it more lucrative than employment? Does it really offer more autonomy? Here are the three questions I'd work through before deciding — plus two surprises I hit on my own journey to the answer.
Start Here: What Did You Believe as a Trainee?
During my residency and fellowship, the picture seemed clear: colleagues in private practice appeared to have more autonomy and significantly higher earnings; those in academia earned noticeably less; and those at community institutions had reasonable income but limited autonomy. In short, money and autonomy seemed to favor private practice. That was my perception back then — but was it actually true? Let's look.
Question 1: How the Money Actually Works — RVUs vs. Collections
There are two primary payment models in US healthcare. Under the work RVU (wRVU) model, each encounter or procedure is assigned a value — a level-4 established visit, for example, is 1.92 wRVUs — and your compensation is your total wRVUs multiplied by your specialty's per-wRVU rate. Institutions typically pay this way. Under collections, private clinicians bill contracted insurers and are paid on pre-agreed rates; what's actually collected is what counts. Notably, even private physicians paid on collections often still track wRVUs as a universal, objective productivity measure. (I broke down how wRVUs work in a separate video.)
The Surprise: Procedures Often Pay Less Than Clinic Visits
I always assumed procedures generate more income — that's why procedural specialties tend to out-earn medical ones. Examining the wRVU model surprised me: for the same time interval, procedures and imaging frequently pay less than clinic visits. Some illustrative comparisons. Here are some examples based on the 2025 data:
Established patient visit, 15 min → 1.92 wRVUs
Thyroid biopsy, 15–40 min → 1.5 wRVUs
Thyroid ultrasound, 15–30 min → 0.54 wRVUs
Diagnostic EGD, 30–90 min → 2.09 wRVUs
Diagnostic heart catheterization, 60–90 min → 4.54 wRVUs
Robotic adrenalectomy, ~3 hrs → 20.7 wRVUs
Total thyroidectomy, ~3 hrs → 15.04 wRVUs
Now compare: four moderate-complexity established visits with the G2211 add-on total 9 wRVUs in one hour — and 27 wRVUs over three hours, exceeding every procedure above. And that excludes the unpaid pre- and post-op clinic visits bundled into surgical packages. Facilities are paid well for these procedures, but little trickles to the physician unless you hold a stake in the facility.
Where Private Practice Can Win: Technical Components and Ancillary Revenue
Here's the flip side. In private practice, many procedures and imaging studies carry a separate technical component on top of the wRVU — so through collections, they can pay more than they would under a pure RVU model. Whether that helps you depends on your practice's focus: the RVU model rewards clinical encounters far better than procedures, while collections can reward procedures. There are real revenue opportunities in ownership — a practice with enough volume can run its own lab or imaging center, and hiring advanced practice providers can add margin. But partnership can take years and isn't guaranteed, and like any business, management makes or breaks it.
The Skill Gap Nobody Trained You For
We learn medicine well — but running a practice demands an entirely different skill set. Business, accounting, marketing, law, patient satisfaction, HR, managing employees and contractors, even being handy — none of it is in the curriculum. Plenty of physicians are gifted entrepreneurs, and managing a practice well can be deeply rewarding. Just go in expecting a learning curve.
What About Tax Benefits?
Ownership does allow deducting many expenses — but these benefits aren't exclusive to private practice. A side business (which many physicians should consider) unlocks similar deductions. And remember you'll likely owe self-employment tax, which can be substantial.
Question 2: Autonomy — Is Control Real?
Private practice does offer genuine autonomy: you hire and fire, choose your EHR vendor and insurers, pick your location, and design the practice. To some that's freedom; to others it's a burden they'd rather not carry — but you'll carry it either way.
Here's a harder truth: control is partly a delusion. COVID reminded us how little we truly control. Even as an owner, you can't control insurer red tape, prior authorizations, rising medication costs, or patients who don't show. I practice in an academic institution with strong leadership and real flexibility over my own template. Yes, there's plenty I don't control — but much of it I don't want to control. That's the point: you get to choose what to be in charge of. And there's always room to negotiate — a skill worth learning.
So decide what you genuinely want to own. Want to be the sole pilot controlling every detail? Private practice fits. Want to focus on medicine and leave the rest to others? Employment fits. During interviews, ask the physicians and management how much autonomy they actually have — it's a good read on fit.
Two Surprises From My Own Journey
For me, as an endocrinologist, establishing a private practice would have been a significant financial loss — the specialty economics simply didn't favor it.
What surprised me most: in my experience, private practitioners often take fewer vacations while earning less than their employed peers — the opposite of the assumption I started with.
wRVU values reflect the Medicare Physician Fee Schedule and are updated annually — verify current figures with the CMS Physician Fee Schedule look-up tool.
The Bottom Line: Do the Math
Private practice can be a great option — the best route for some specialties, the wrong one for others. Before deciding, calculate the wRVU values for your specialty's common CPT codes, your average per-wRVU rate, and typical collections for what you do most. Do that homework first, and the right path gets much clearer. Only you can assess your specialty and situation.
Want to run these numbers with confidence? Physician Revenue Mastery walks through RVUs, collections, and practice economics step by step — CME-accredited and built for practicing physicians.
References & Further Reading
Centers for Medicare & Medicaid Services — Physician Fee Schedule Look-Up Tool: https://www.cms.gov/medicare/physician-fee-schedule/search/overview
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