Should You Start Your Own Practice or Join a Group?
This is the most consequential career decision most physicians and dentists will make, and it is the one they are least prepared for. Medical and dental schools teach clinical medicine. They do not teach practice economics, business operations, contract negotiation, or how to evaluate whether the financial and lifestyle trade-offs of ownership make sense for your specific situation.
The result is that most providers make this decision based on incomplete information, the advice of a single mentor, or the path of least resistance. Some start practices without understanding the financial commitment and timeline required to reach profitability. Others accept employment offers without realizing how much autonomy and long-term earning potential they are giving up. Both paths can be excellent. Both can be disastrous. The difference is almost always whether the provider understood the full picture before committing.
The landscape has shifted dramatically. In 2012, 60 percent of physicians owned their practices. By 2024, that number had dropped to 42 percent, according to the AMA Physician Practice Benchmark Survey. Three out of four physicians now work for a hospital, health system, or corporate entity. Meanwhile, 81 percent of physicians surveyed by Doximity in 2025 agreed that reimbursement policy has played a significant role in the decline of independent practice. The trend toward consolidation is real, but so is the counter-movement: Direct Primary Care and concierge practices grew 83 percent between 2018 and 2023, and four in ten physicians now report having a side venture or secondary income stream. Ownership is harder than it was a decade ago. It is not disappearing.
This guide lays out the honest financial, lifestyle, and career comparison between starting your own practice and joining an existing group, whether as an employee or on a partnership track. It is written for physicians and dentists at any career stage, but especially for those coming out of training or leaving an employed position and weighing their options.
The Financial Reality of Each Path
The financial comparison between ownership and employment is more nuanced than most people present it. The common narrative is that employed physicians get a steady paycheck while owners make more but take on risk. That narrative is directionally correct but misses the details that actually drive the decision.
Employed physicians in 2026 earn an average total compensation of approximately $386,000, according to the Medscape Physician Compensation Report. Primary care physicians average around $298,000 and specialists average around $417,000. Compensation for employed physicians typically includes a base salary, productivity bonuses tied to wRVUs (work relative value units), and benefits including health insurance, retirement contributions, malpractice coverage, and CME allowances. The financial ceiling for employed physicians is largely determined by their compensation model and the organization’s willingness to reward productivity. Many health systems are moving toward standardized compensation structures where individual negotiation is limited. About a quarter of physicians surveyed reported that negotiation was not an option in their most recent contract.
Practice owners typically earn 15 to 30 percent more than their employed counterparts in the same specialty and market, according to verified compensation data. Owners also have access to income streams that employed physicians do not: profit distributions, equipment depreciation deductions, real estate ownership or lease arbitrage, ancillary service revenue, and the eventual sale value of the practice itself, which can represent a significant asset at retirement. The trade-off is that these earnings come after covering overhead, which for most practices runs 55 to 70 percent of collections. Owners also bear the financial risk during startup, during slow periods, and during payer disruptions.
The income comparison changes dramatically over time. In year one, an employed physician almost always earns more than an owner who is investing in a startup, covering credentialing gaps, and building a patient base. By year three to five, a well-run owned practice typically matches or exceeds the employed income. By year ten, the gap can be substantial, because the owner’s income has grown with the practice while the employed physician’s compensation has grown only with annual adjustments that have barely outpaced inflation in recent years.
The financial question is not simply “which path pays more.” It is “which path pays more over the 20 to 30 years I plan to practice, and what is the risk-adjusted return of each?”
The Autonomy Question
Autonomy is the factor that most providers cite when explaining why they chose ownership, and it is the factor that most employed providers cite when explaining what they wish they had more of.
As an owner, you control your schedule, your patient panel, your payer mix, your treatment protocols, your staff, your technology, your office environment, and your compensation. You decide how many patients to see per day. You decide how much time to spend with each patient. You decide which insurance companies to contract with and which to drop. You decide when to hire, when to expand, and when to take a vacation. You are not beholden to productivity quotas, patient satisfaction surveys tied to your compensation, or organizational policies that may conflict with how you want to practice medicine.
As an employed physician or group member, your autonomy is limited by the organization’s structure, policies, and priorities. You may have less control over your schedule, your patient volume expectations, your referral patterns, and your clinical decision-making. In larger organizations, resource-use guidelines, quality-assurance standards, and referral restrictions can shape how you practice. You may be required to use specific EHR systems, follow specific documentation protocols, and meet specific production targets. Some employed physicians find these constraints reasonable and appreciate not having to manage the business side. Others find them suffocating.
The honest truth is that autonomy exists on a spectrum. A physician joining a small, physician-owned group practice as a partner-track associate has far more autonomy than one joining a large hospital system as a salaried employee. And a solo practice owner who is drowning in administrative work and cannot afford to hire sufficient staff has less functional autonomy than they expected, even though they technically control every decision. The question is not just “how much autonomy do I want” but “what kind of autonomy matters most to me, and which path actually delivers it?”
The Lifestyle Comparison
The lifestyle trade-offs between ownership and employment are real, and they shift over time.
In the early years, employment is almost always easier. You show up, see patients, and go home. Someone else handles billing, credentialing, HR, facilities, IT, compliance, marketing, and the hundreds of operational decisions that consume a practice owner’s time and mental energy. Your income is predictable. Your benefits are handled. Your malpractice insurance is paid. Your evenings and weekends are your own, at least from an administrative standpoint.
Practice ownership in the early years is the opposite. You are the physician, the CEO, the HR manager, the IT troubleshooter, and the marketing director. You are responsible for every operational problem, every staffing issue, every vendor relationship, and every financial decision. The administrative burden is significant, especially in the first two to three years when the practice is still maturing and you may not yet be able to afford the staff to delegate effectively.
Over time, this dynamic often reverses. Established practice owners who have built strong teams and efficient operations frequently report better work-life balance than their employed counterparts because they control their schedules completely. They can block off a Wednesday afternoon, take a three-week vacation, or reduce their patient load as they approach retirement without asking anyone’s permission. Employed physicians in large organizations often face increasing pressure to produce, with less flexibility to adjust their schedules without navigating institutional bureaucracy.
The lifestyle question also depends heavily on your personality. Some physicians genuinely enjoy the business side of medicine. They find satisfaction in building something, in solving operational problems, in managing a team, and in watching a practice grow. For these physicians, ownership is not a burden. It is a source of engagement and fulfillment that employment cannot replicate. Other physicians want to focus exclusively on clinical care and have zero interest in managing a business. For these physicians, employment or a group practice where the business side is handled by partners or administrators is the right fit, and there is nothing wrong with that.
The Hybrid Path: Join First, Then Start
There is a third option that more physicians are choosing, and it deserves serious consideration: join an existing practice as an employee or associate first, learn the business side, and then start or acquire your own practice two to five years later.
This path has significant advantages for physicians coming directly out of training. It provides a stable income during the years when student loan payments are highest and savings are lowest. It provides mentorship and exposure to practice operations without the financial risk of ownership. It provides time to build clinical confidence, develop a referral network, and understand the market before committing your own capital.
A recent AMA article featured a physician who did exactly this, joining a private practice as an employee after residency, learning the business under the mentorship of the practice owner, and then launching an independent practice a few years later with the operational knowledge and confidence that residency did not provide. The physician noted that this gradual exposure to billing, revenue cycle management, staffing, and payer dynamics was the equivalent of a business residency, one that prepared them for ownership far better than jumping in immediately.
If you choose this path, be intentional about it. Negotiate your employment contract with the understanding that this is a stepping stone, not a final destination. Pay attention to the business side of the practice, not just the clinical side. Ask questions about overhead, payer mix, production reports, and staffing models. Build relationships with lenders, real estate agents, and practice consultants so that when you are ready to make the move, you have a network in place. And make sure your employment contract does not include a non-compete clause that prevents you from opening a practice in the geographic area where you intend to build.
What to Evaluate If You Are Starting Your Own Practice
If you are leaning toward ownership, these are the questions that should drive your planning.
Can you sustain three to six months without a full income? Most new practices take three to six months to reach breakeven, and the credentialing process alone can take 90 to 120 days. You need enough working capital or personal savings to cover both practice expenses and personal living costs during this ramp-up period. If you are carrying $300,000 in student loan debt and have no savings, starting a practice immediately after residency may not be financially realistic without aggressive financing.
Do you have a viable market? Not every specialty and not every geography supports a new independent practice. Research the competitive landscape, the payer mix, the referral network, and the demographics of the area you are considering. A primary care physician opening in an underserved rural market faces a very different competitive environment than a dermatologist opening in a saturated suburban market.
Are you willing to invest in the support you need? The practices that succeed are the ones whose owners recognize what they do not know and hire professionals to fill those gaps. A healthcare attorney for entity formation and contracts. A CPA who specializes in medical practices for tax planning. A credentialing company to manage payer enrollment. A billing company or revenue cycle expert to optimize collections. A marketing agency to build your patient base. These are not optional expenses. They are investments that directly affect how quickly and how profitably your practice grows.
Do you understand the startup costs? A primary care practice typically costs $70,000 to $150,000 to start, excluding physician compensation. A specialty practice can cost $200,000 to $500,000 or more depending on the equipment requirements. Dental practices range from $250,000 to $500,000 or more. These numbers should not scare you, but they should be planned for, not discovered after you have already committed.
What to Evaluate If You Are Joining a Group
If you are leaning toward employment or a group practice, these are the questions that should drive your evaluation.
What is the compensation model, and how does it scale? Understand whether you are paid a straight salary, salary plus productivity bonus, or pure production. If the model includes wRVU-based incentives, understand what the conversion factor is, how it compares to MGMA benchmarks for your specialty, and whether there is a realistic path to earning significantly above base. If the model is salary-only with no productivity upside, understand that your income is essentially capped.
Is there a partnership track, and is it real? Many group practices advertise a partnership track that is vague, undefined, or practically unattainable. Ask specifically: what are the criteria for partnership? How long does it typically take? How many associates have been offered partnership in the past five years? What does partnership cost (buy-in), and what does it deliver (profit-sharing, equity, governance rights)? If the answers are unclear, the partnership track may exist on paper but not in practice.
What does the non-compete clause say? Non-compete clauses in physician employment contracts can restrict your ability to practice within a defined geographic radius for one to three years after leaving the group. If you sign a contract with a 20-mile non-compete in a market where you intend to stay long-term, you are effectively locked into that organization. If you leave, you may be forced to move or commute an unreasonable distance. Have a healthcare attorney review every non-compete clause before you sign, and negotiate the scope and duration if possible.
What is the culture, and how are decisions made? Spend time in the practice before you sign. Talk to the existing associates, not just the partners. Ask about call schedules, administrative expectations, and how disagreements are resolved. A group practice with a healthy culture and a governance model that gives associates a voice is a very different experience from one where decisions are made by a small group of senior partners with no input from the rest of the team.
What happens if you want to leave? Understand the termination provisions in your contract. How much notice is required? What happens to your patient panel? Are there any financial penalties for early departure beyond the non-compete? Can you take your patients with you, or does the group retain them? These terms matter enormously if the relationship does not work out.
When Each Path Makes the Most Sense
Ownership makes the most sense when you are in a specialty with strong demand and favorable economics, when you are willing to invest time and money in building something of your own, when autonomy and long-term earning potential are your primary priorities, and when you have the temperament to manage a business alongside a clinical practice. Ownership is also the stronger financial play for physicians who plan to practice for 15 or more years, because the compounding advantages of practice equity, ancillary revenue, and uncapped income grow significantly over time.
Employment or joining a group makes the most sense when you want financial stability and predictability from day one, when you prefer to focus on clinical care rather than business operations, when you are in a specialty or market where the startup costs and competitive dynamics make independent practice difficult, or when you are early in your career and want time to build clinical skills and market knowledge before committing to ownership. Employment is also the right choice for physicians who have no interest in the business side of medicine and would find the administrative responsibilities of ownership genuinely draining rather than energizing.
There is no universally correct answer. There is only the answer that is correct for your situation, your personality, your financial position, and your goals. The mistake is not choosing one path over the other. The mistake is choosing without fully understanding what each path requires and what each path delivers.
How We Help
At New Practice Guide, we work with physicians and dentists across the country who are navigating this exact decision. For those who choose ownership, we connect them with the lenders, real estate agents, credentialing companies, billing partners, construction professionals, and marketing agencies they need to build a successful practice. For those who are evaluating group opportunities, we provide the context and market knowledge that helps them assess whether a specific offer is competitive and fair.
We do not push providers toward one path or the other. We help them understand the full picture and make the decision that is right for their career, their finances, and their life.
If you are weighing this decision and want to talk through your options with someone who has seen how both paths play out across hundreds of practices, we are happy to help.
Frequently Asked Questions
Do practice owners really earn more than employed physicians?
On average, yes. Practice owners and partners typically earn 15 to 30 percent more than hospital-employed physicians in the same specialty and market. However, this premium comes with variability. In good years, the gap can be much larger. In difficult years, owners may earn less than their employed counterparts while still bearing the financial obligations of the practice. The income advantage of ownership is most pronounced over a full career, particularly when you factor in practice equity, real estate ownership, and ancillary revenue streams that employed physicians do not have access to.
How much does it cost to start a practice?
Startup costs vary significantly by specialty and market. A primary care practice typically costs $70,000 to $150,000 excluding physician compensation. Specialty practices range from $200,000 to $500,000 or more. Dental practices typically require $250,000 to $500,000 or more. These figures include lease and buildout, equipment, technology, initial staffing, marketing, insurance, credentialing, and three to six months of working capital. SBA 7(a) loans are the most common financing vehicle, and physicians are among the most favorable borrowers in the eyes of lenders.
How long does it take for a new practice to become profitable?
Most practices reach breakeven within three to six months and achieve stable profitability within twelve to eighteen months. The primary variable is credentialing: payer enrollment takes 90 to 120 days, and you cannot bill insurance until you are credentialed. Practices that begin credentialing four to six months before their target opening date and invest in marketing from day one reach profitability fastest. Practices that wait until after opening to start credentialing and marketing can take six months or longer to reach breakeven.
What if I want autonomy but do not want to manage a business?
Consider a group practice on a partnership track where the administrative and operational burden is shared among partners or handled by a dedicated practice administrator. You get a meaningful voice in how the practice is run, a share of the profits, and more clinical autonomy than a hospital-employed position, without bearing the full weight of business management alone. Another option is hiring a practice manager from the start so that the day-to-day operational decisions are delegated from the beginning, allowing you to focus on clinical care while retaining ownership and the financial upside that comes with it.
Should I join a group first and then start my own practice?
This is an increasingly common and often very smart path, especially for physicians coming directly out of training. Joining an established practice for two to five years gives you a stable income, mentorship, exposure to practice operations, and time to build clinical confidence and a referral network before committing your own capital. The key is to be intentional about it: pay attention to the business side, build relationships with professional advisors, and make sure your employment contract does not include a non-compete that prevents you from opening your own practice in the area where you want to build.
Is independent practice dying?
No. The percentage of physician-owners has declined from 60 percent in 2012 to 42 percent in 2024, but independent practice is not disappearing. It is changing. Direct Primary Care and concierge models are growing rapidly. Physicians are increasingly diversifying into ancillary services, telehealth, and cash-pay models that reduce dependence on insurance reimbursement. Private equity interest in physician practices, while it has driven consolidation, has also raised awareness of the value of well-run independent practices. The physicians who thrive as independent owners in 2026 are the ones who treat their practice as a business, not just a clinical operation, and who invest in the professional support that allows them to compete effectively against larger organizations.
New Practice Guide is a trusted resource built by healthcare providers to connect you with vetted professionals in lending, real estate, credentialing, billing, marketing, construction, and more. Whether you are starting your own practice or evaluating group opportunities, we help you understand the full picture and connect you with the right professionals for your situation. Tell us about your practice and we will help you navigate what comes next.