Corporate Practices

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Corporate Practices

​​Working for a large corporate health care provider is an option that reduces the personal and financial risk to the individual physician, while providing opportunities to shelter income through a qualified retirement program. For example, working for a large health maintenance organization (HMO) office provides a great deal of security in terms of salary and benefits and reduces the level of responsibility for the total administrative and business aspects of practice. Government and federal health care facilities provide another practice outlet. Academic practices provide many of the same benefits. Lastly, niche practices such as emergency department or delivery room coverage, working with specific disease entities like obesity, or substance abuse centers provide yet another practice outlet. 

Advantages include limited liability to the individual practitioner; centralized management; pension and profit-sharing plans that may be superior to solo practice or partnerships; tax incentives; and presence of other benefits that are more cost-efficient because of scale (e.g., health benefits, life insurance, disability, malpractice discount, etc). 

Disadvantages include need for an extensive organization to manage personnel, legal paperwork, tax, and accounting; need for higher start-up costs; and potential tax consequences (e.g., corporate versus income tax). 

Corporate practices may exist in several forms—HMO groups, government or federal health care centers, hospital-based practices (e.g., academic groups, hospitalist groups, emergency department physicians), and boutique practices (e.g., substance abuse, surgical centers). These may all be structured very differently depending on local standards, community and state laws, and preferences of organizing groups. Each may have various arrangements for a physician’s role and responsibility within the group, including profit sharing, vesting time, amount of call, and academic partnerships.

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