How to Start a Successful Ophthalmology Practice

As a physician, there are multiple ways you can seek employment, grow your career, and earn the income that you’ve trained so hard for.

Physicians have the option to join a hospital group or a large health care network. They can work as an employee in a small practice or a medical clinic. Physicians can also start a solo practice, team up with other physicians to create a multi-partner practice, or join an existing practice on a partnership track.

And for ophthalmologists, starting a practice is often the most attractive option.

Whether you specialize in glaucoma treatment, cataract surgery, cornea or retina diseases, or practice comprehensive ophthalmology, here’s what you need to know to start a successful ophthalmology practice.

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How Many Ophthalmologists Own Their Own Practices?

While it’s common to find most surgeons working in a hospital setting, most ophthalmologists work in smaller practices. Some of those M.D.s own their practices or work in a partner practice, while others work as employees of physician-owned or larger outpatient clinics.

But how many ophthalmologists actually own their practices?

Here are the stats:

The Facts on Ophthalmology Practices

According to the American Academy of Ophthalmology, there are 19,216 ophthalmologists in the United States.

Of the M.D.s in ophthalmology practice, 76% are men, and 24% are women. Based on this data alone, we can conclude that men own the vast majority of ophthalmology practices in the U.S.

60% of all ophthalmologists work in small group practices with three physicians or less.

It’s much more likely to find an older, more experienced ophthalmologist in private practice than a younger M.D. just out of residency and training. The AAO also reports that only a mere 3% of ophthalmologists in training hold interest in starting a solo practice. The vast majority are much more focused on joining a larger practice, and the trend is shifting in that direction for most types of physicians.

Among all physicians, only 44% are self-employed in solo practice or partner in a larger practice. The majority of physicians work as employees rather than in private practice.

But it’s not the same for every physician in every specialty.

For ophthalmologists, private practice is still a viable concept.

Are Ophthalmologists in Demand?

There are roughly 7,000 private ophthalmology practices in the U.S.

Studies show, with an aging population, the need for more eye care providers and ophthalmic surgeons will increase in the coming years.

Further, a large percentage in practice today are over 55, meaning that a chunk of the workforce is nearing retirement age. For these reasons, and others, a private ophthalmology practice is the right move for many M.D.s.

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How Much Do Physicians in Solo Practices Earn?

According to the Medscape Ophthalmologist Compensation Report 2022, ophthalmologists in the U.S. earn an average of $417,000 per year. Male ophthalmologists earn an average of $390k per year, while their female peers earn about 14% less, with an average of $341k per year.

Of all self-employed physicians, including those who own their own practices or are partners in a practice, the average salary is $352,000 per year. On the other side of the coin, employed physicians earn an average of $300,000 per year.

Ophthalmologist salaries also tend to vary based on the size of the practice or medical group they work for. M.D.s that work for practices with less than nine employees generally earn more than those who work in practices with more than ten employees.

Regardless of where they work, in comparison to all physician specialties, ophthalmologists are some of the most satisfied physicians in the U.S.

A remarkable 94% report that they would choose the same specialty again.

Similar: How to Buy Into a Private Practice (Valuations and More)

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How Much Experience Do You Need to Start Your Own Ophthalmology Practice?

So is it possible, even as a new, young M.D., to start your own ophthalmic practice?

As long as you’re licensed, the answer is yes.

Yet, there are various factors to consider before deciding to open your own practice.

Having more experience usually means having more patients, which is critical in operating a successful practice. But physicians cannot overlook the importance of practice management or the need to have an entrepreneurial sense of spirit when starting their own business.

Before you can even focus on patient care and patient safety, an aspiring solo practice owner needs to consider how they will find funding to open their business. They’ll also need to make a full-time commitment to learning all aspects of running the company or, at the very least, hiring experienced staff members to handle the daily operations.

Opening your own ophthalmology practice takes time, money, and dedication. It’s no easy feat, but if you pull it off …

It’s quite lucrative in comparison to the salary you can earn as an employee of a hospital or another physician’s practice.

Related: Should You Hire an Optometrist or Ophthalmologist?

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Starting a Solo Practice vs. Opening a Practice With Partners

Rather than starting a solo practice on your own, you may want to consider partnering with other physicians.

Team up with ophthalmologists in other subspecialties, such as:

• Corneal ring implantation
• Retinal detachment surgery
• Refractive surgery
• Oculoplastics

The more services you can offer, the more patients you should be able to bring in.

The Pros of Opening a Partner Practice

Bringing more patients to your practice isn’t the only positive of opening a practice with other physicians. There are several reasons why ophthalmologists often join forces and buy into a practice with multiple physicians.

You Can Share the Expenses

Starting a medical practice is expensive. Startup costs range from $200,000 to as high as $500,000, depending on the location of the business, the equipment purchased, and the other factors.

The biggest benefit of opening a joint practice with other physicians is sharing the costs. Having to finance and fund hundreds of thousands of dollars isn’t feasible for many physicians (particularly those that are young and still paying off medical school loan debt). The more partners you have, the more people you’ll have to help pay for those expenses.

You Can Share the Workload

As one of several partners in a practice, you can share all the responsibilities of the business, including hiring staff members, deciding how to market the practice, and deciding on the metrics you want to use to create budgets and analyze profitability.

Having even one partner share in the workload can reduce hours spent per week on non-clinical work.

You Can Enjoy a Better Work/Life Balance

In solo practice, you and you alone are responsible for everything that happens. For many M.D.s, that means having to work incredibly long hours with little free time to spare.

Having other physicians who can see your patients when you’re unavailable is an excellent benefit to creating a partner practice. But the specific ophthalmologists you partner with make a big difference.

If you’re a retinologist that specializes in age-related macular degeneration, you won’t likely want to turn your patients over to a neuro-ophthalmology physician that specializes in strabismus or a pediatric ophthalmology physician that works with amblyopia patients.

While it can be beneficial to have a varied group of eye care specialists, partnering with physicians of the same subspecialty as you can also be a plus.

The Cons of Starting a Partner Practice

As with any business, opening a practice with other physicians does have some drawbacks as well. Here are some of the cons of partnering with other ophthalmologists that you won’t have to consider if you open a practice of your own.

Less Autonomy

For many physicians, the whole point of opening a private practice is to provide the care they want in the way they want. If you have partners, you won’t have that same level of autonomy. You’ll need to agree when it’s time to make decisions.

Differences of Opinions

It’s essential that you partner with like-minded physicians with similar goals and a similar work ethic as you. If you don’t, the difference of opinions could tear your business apart before you even get it off the ground.

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Consider Becoming a Partner in an Existing Practice

The Covid-19 pandemic has changed the way we all behave. And the Coronavirus made it clear that when people don’t need to see a doctor, they won’t.

In 2020, medical practices that conduct elective procedures, including many ophthalmology practices, saw a decrease in patient volume of as much as 60%. Telemedicine visits have increased, but the decline of in-person visits could make it more difficult for new practices to get their business up and running.

We still do not know the long-term effects of Sars-Cov-2 on the field of ophthalmology. What we do know is that it has changed the mindset of many physicians considering entering private practice.

If you’re not ready to start a practice from the ground up, consider seeking employment in an ophthalmology clinic. With so many ophthalmologists already working in private practice, there’s a good chance that you’ll be able to find an outpatient ophthalmology clinic willing to partner.

You can find available partnership opportunities by contacting practices directly, networking with contacts and colleagues, and searching online job boards such as MD Search.

AAO also has a career center on its website that allows you to search specifically for partnership opportunities.

How Much Does it Cost to Become a Partner?

Before you decide to buy-in on a partnership opportunity, you’ll need to do your homework. The first step is to know the valuation of the practice you’re buying into.

To do so, you’ll want to see financial statements, tax returns, and know the practice’s profit margins, cost margins, and revenue growth rate. You’ll also need to assess the rate of new and returning patients, the productivity levels of existing partners, and the tax implications of how buying-in will affect your tax liability.

Every ophthalmic practice is different, and there is no one-size-fits-all price for a buy-in. Every buy-in agreement has its own terms, compensation methodology, and governance structure.

From tangible assets, such as medical equipment, to the highly debated concept of intangible goodwill, you’ll need to have a minimum of two experts on your side:

A skilled CPA and an experienced attorney.

When entering into a partnership, keep in mind that there may come a time when you want to exit it as well. Before buying in, be sure to enlist the services of a contract review specialist to negotiate and review your partnership agreement, including exit and termination clauses.

Related: Budgeting 101 – How to Lower Administratie Costs in Your Practice

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How To Find Patients for Your Practice

No matter what sort of ocular service you provide, any ophthalmologist starting a practice will need to put some of their focus on patient acquisition.

Here are a few ways that you can attract patients to your business:

Know Your Demographics

Before you choose a location, be sure that there is a need for ophthalmologists in the area. You’ll have a better chance of acquiring new patients if the demand for skilled physicians outweighs the supply.

Become a Thought Leader

Create an excellent reputation for your practice by positioning yourself as a thought leader in the field of ophthalmology.

You can do so through:

• Speaking engagements
• Publishing your own work digitally or in print
• Writing or peer-reviewing journal articles to educate other ophthalmologists

Market Your Business

Many patients find a new physician simply by Googling specialists online. With a strong content marketing strategy, a focus on SEO, and paid online ads, you can position yourself at the top of Google search results. The higher your search rankings are, the easier it will be to attract new patients to your practice.

In addition, it’s crucial that you make every patient encounter a good one. Many patients in need of a new M.D. rely on the references of family members and trusted friends.

Build Relationships With Optometrists

Many ophthalmology patient/physician relationships begin with the referral of an optometrist. Networking with and building strong relationships with local optometrists is an effective way to increase referral rates and book more patient appointments.

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Not Ready to Open Your Own Practice? Alternative Career Paths for Ophthalmologists

Opening a private practice or joining an existing practice are but two employment options for ophthalmologists.

You also have the option to:

• Work in public health
• Take an academic route teaching or conducting research
• Work overseas in a volunteer position
• Find employment with a non-profit organization

Ophthalmologists who aren’t ready to commit to a full-time position may want to seek locum tenens positions.

You can find temporary, short-term employment contracts through various locum tenens agencies. Dozens of these agencies are members of the National Association of Locum Tenens Organizations (NALTO) that sets the ethical standards for the locum tenens industry.

If you’re going to work locum tenens, you’re going to need the right coverage. Find out: Everything You Need to Know About Locum Tenens Insurance.

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Whether looking to enter into solo practice, start a multi-partner practice with other physicians, or buy into an existing practice, ophthalmologists have options. It’s simply a matter of deciding which career scenario is right for you.

For more information on contract review or starting your own medical practice, contact Physicians Thrive now.