Private practice vs hospital employment: Which pays off more in oncology?
Industry Buzz
Private practice have options to buy drugs at discounts like 340b, but it requires making strategic partnerships (McKesson/US Oncology, OneOncology, AON). Of course, this isn’t true private practice, but it's better than the alternative of having to buy at ASP and sell at ASP+6%.
—Private practice oncologist via Reddit @dancingwithdragons
Deciding between private practice and hospital employment is an important decision for any oncologist.
Along with factors such as professional fulfillment and autonomy, oncologists must also weigh the effect of where they practice on their compensation.
“The choice between hospital employment and private practice is one of the most significant decisions an oncologist makes,” a spokesperson for the American Society of Clinical Oncology tells MDLinx. “Oncologists must weigh salary stability with other factors, such as administrative burden (electronic health records, billing, etc.), autonomy over clinical schedules, call coverage, professional growth, and leadership activities.”
Private practice can be lucrative
While oncologists’ compensation can vary significantly by region and subspecialty, private practice can prove lucrative for some. One recent study of radiation oncologists found that those in private practice had median lifetime earnings of $11,383,781. By comparison, for radiation oncologists employed by a hospital, the figure was $8,834,886.[]
The benefits of private practice, however, also carry some risk.
“In general, private practice may offer higher earning potential over time because physicians can share in practice profits and ancillary services,” says Amar Rewari, MD, Chief of Radiation Oncology at Luminis Health. “However, that income can be less predictable and depends on the success of the practice. Hospital employment tends to provide more predictable compensation and benefits but may have a lower ceiling compared with successful private practices.”
Where private practice revenue actually comes from
For many oncologists in private practice, compensation is not driven by salary alone, but by the performance of the infusion center.
A key metric is infusion chair utilization (the percentage of available chair time that is actively used for patient treatment). Even small inefficiencies—unused slots, delays between patients, or prolonged drug preparation times—can translate into significant lost revenue over the course of a week.[]
In buy-and-bill models, infusion services, through drug margin and administration fees, represent a major source of practice revenue and are closely tied to physician income. This dynamic helps explain why private practice can offer a higher long-term earning ceiling. Physicians may share in revenue generated from drug administration and ancillary services, meaning operational factors—like scheduling efficiency, staffing, and pharmacy turnaround—can directly influence income.
Despite its impact, infusion efficiency is rarely emphasized in training. Yet in practice, a consistently underutilized chair can quietly erode margins, while a well-run infusion suite can meaningfully enhance both practice profitability and physician compensation.
Related: 3 pros and 3 cons of starting and managing your own private practice
“Private practices must manage staffing, regulatory compliance, payer negotiations, and rising operating costs,” Dr. Rewari adds. “Over the past decade, reimbursement pressures and administrative complexity have made it increasingly challenging for smaller practices to remain independent.”
Tolerance of financial risk
Compensation is just one of many factors to consider when deciding between private practice or hospital employment, according to Dr. Rewari.
Physicians should think about their tolerance for financial risk and their interest in the business side of medicine. Private practice requires involvement in management, operations, and payer relationships.
—Amar Rewari, MD, MBA
“Hospital employment may be more appealing for physicians who prefer a stable salary and want to focus primarily on clinical work. Debt levels, family considerations, and geographic opportunities can also play a role in that decision,” Dr. Rewari says.
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