Employed Physicians vs. Independent Physicians: What’s the Best Choice for You?

By: Lisa Morris on December 17, 2018

It’s a big question that every doctor has to ask themselves when they enter the working world: Should I go into private practice, or do I want a salaried position?

Physicians weighing their options between these two career paths will find plenty of benefits and challenges for both, so figuring out the major considerations that should be taken into account can be really tricky—for example:

How important is salary?

Will you be happy if you’re not the decision-maker?

Do you want to own your own practice?

I wish I had a litmus test to give you that would tell you the answer without making you think through all of these different factors, but no such definite test exists. Instead, you’ll find that the decision between becoming an employed physician vs. independent ultimately depends on one wildly variable thing: personal preference.

Physicians facing this decision must consider their own expectations when it comes to the differences between employment and independence, but it will be especially important to focus on three crucial aspects in order to make the best decision for themselves.

Here’s what we’ll cover:

Employment vs. Private Practice: What’s the Difference?

You Should Go Independent If…

Test Yourself: Should You Go Independent?

Employment vs. Private Practice: What’s the Difference?

There are plenty of differences between an employed position and a private practice, from how much money you’ll make to what your work environment will be like. And according to the 2018 Medscape Physician Compensation Report, more and more physicians are choosing employed positions over self-employment.



In a salaried position, you’ll either be working at a hospital or a small practice that’s affiliated with a larger group or collection of providers. These positions offer higher base salaries that tend to be more reliable than what physicians with private practices make, and there may also be opportunities for overtime compensation in hospital settings, which is less likely in private practices that have set hours of operation.

That said, salaried positions tend to have strict pay schedules and less room to negotiate compensation, which is not the case with private practices. That means owners of successful independent practices have the opportunity to make a good deal more money than those in employed positions.


Private practices generally have smaller budgets for things like HR and employee benefits, but they offer more freedom with limited overtime and smaller patient loads. Many physicians say private practices offer better work-life balance thanks to flexible work hours, whereas hospitals generally have stricter shift requirements.


Finally, the workplace environment differs quite a bit between hospitals, which tend to have a stiffer, more corporate employer/employee vibe, and private practices, which have smaller settings that allow physicians to feel more involved in the operational aspects of the practice.


…You’re Not Afraid of a Financial Gamble

In 2018, self-employed physicians earned between $300,000 and $400,000, while employed physicians earned between $250,000 and $300,000.

It’s true that employed physicians generally start off with higher base salaries, but the opportunities for additional compensation are greater for those who own their own independent practices.

While the prospect of more money is undoubtedly appealing, it’s also important to note that independent physicians take on significantly more financial risk for the chance to earn that extra income.

It can cost as much as $30,000 just to start a practice in some areas, with monthly payments of up to $10,000 on top of that. Self-employed physicians assume responsibility for the cost of rent, insurance, medical equipment, their employees’ salaries, software and so much more—all things that employed physicians don’t have to worry about.

THE BOTTOM LINE: For that reason, the big question you have to ask yourself is: To what extent are you willing to be a business owner? If you don’t have the entrepreneurial spirit, the burden of opening, owning and running your own practice will inevitably prove too great.

…You’re a Negotiating Master

One big advantage to being an employed physician with a larger group is the leverage it offers when negotiating payer contracts. Because these negotiations have grown increasingly complex over the years, many physicians opt for employment simply to avoid being involved in them at all.

There are hundreds of health care payers in the U.S., and independent practices simply can’t work without them, nor can they work with unfavorable contracts that offer low reimbursements and few or no benefits to the provider.

The advantage here for employed physicians is that these contract negotiations are someone else’s problem, but private practices have their own advantages as well. For example, an independent practice can make compromises that allow it to be a more agile negotiator than a larger body.

THE BOTTOM LINE: That means private practice owners must be equipped to handle intensive negotiations, something which not everyone can do. So here’s the question you must ask yourself: Are you interested in (or capable of) being a strong negotiator? If not, you’ll struggle to agree on contracts that enable you to make a profit and sustain your practice.

…You Want to Be the Boss

This is a big one, and it’s a two-pronged consideration: First, do you want to be the ultimate decision-maker? And second, do you want to manage employees? One thing you’ll probably see a lot when researching this decision between employment and self-employment is the idea of autonomy, and that’s because it’s incredibly important.

The Power to Make Decisions

Employed physicians are subject to whatever choices management makes, and they typically have to follow those decisions without input. That means employees get no say in which holidays the office will close for, whether you’ll ask for brand name prescriptions or generic, how appointments will be scheduled and so on.

Giving up decision-making freedom is a deal breaker for many physicians, and the ability to make those decisions is a major bonus for private practices.

It’s a bit of a double-edged sword, though. Having the autonomy to make those decisions is great, but then you also have the burden of making those choices for your employees. Being a practice owner means becoming management and asking your team to submit to your decisions just like employed physicians must do in hospitals.

The Responsibility of Managing Employees

Speaking of your team, the other consideration here is whether or not you’re ready to manage employees.

Salaried physicians working in hospitals or other groups may have some authority over others, but they’re not in charge of hiring and firing, professional development, performance reviews, etc. Responsibilities an independent practice owner will have to assume for each member of their team.

THE BOTTOM LINE: So here’s your big question: How much responsibility do you want? If your answer is anything other than “all of it,” then you’ll likely find owning your own practice too stressful to manage.

Test Yourself: Should You Go Independent?

The differences between employed and independent physicians can be difficult to understand in the abstract, so here’s a helpful way to visualize them:





Employed Physicians

Higher base pay; opportunities for overtime

Larger benefits budget; strict shift requirements

Stiffer, more corporate vibe

Independent Physicians

Higher earning potential

Smaller benefits budget; more flexibility & better work-life balance

Smaller setting where physicians feel more involved

Remember, the ultimate choice comes down to personal preferences. No matter which career path you decide to follow, you can rest assured that you’ve made the right decision if you’re honest with yourself about what kind of environment you want to end up in.