The decision of the Physician Assistant whether to enter private practice or an alternate career path can be greatly aided by economic considerations. The potential income both now and in the future for each alternative needs to be assessed. Trends in operating costs and gross revenues for relevant private practices must be researched. Characteristics of the practices, such as, age, size, specialty and location have impact, as well. Issues of fee collection and reimbursements require investigation. The purpose of this article is to review the role that economics plays in the decision-making process for the Physician Assistant (PA) in terms of the type of practice to pursue. Critical to the decision of a new Mid-Level Professional whether or not to enter into employment in a private practice or hospital / clinical based assignment, is research into the long term economic consequences. A third practice model to add to the mix is the physician / physician assistant owned practice partnership. This entails consideration of the following: Potential salary presently available and its likely 1. growth in the future Any investment costs accounting for loss of future 2. interest Potential revenue, now and in the future from 3. private practice Operating costs attributable to private practice both 4. now and in the future Problems related to reimbursement and collection 5. of fees Type of practice e.g. size, age, specialty, or multi6. specialty Location of practice 7. Participation in managed care, HMO's, etc 8. Income disbursement from the practice or 9. organization In general, assessing potential salary and prospects for the future can be guided by Bureau of Labor Statistics publications that provide current salary ranges and employment prospects for the future. Among such publications are the Occupational Outlook Handbook and Occupational Outlook Online (http://www.occupationaloutlook-handbook.net). For physician assistants, median annual earnings in 2002 were $64,670 with the middle 50% earning between $49,640 and $77,280. These earnings are affected by factors such as specialty, practice setting, geographical location and years of experience. Physician assistants are expected to be in very high demand over the period extending to 2012, even more so than other professions. To the above data, one would need to make some estimates of the fringe benefits which would be in addition to salary. Perhaps a percentage estimate typical for these professions could be used. If a PA is entering a private practice as a partner, as many are beginning to do, one then would need to determine whether a capital investment would be required, and if so, what the amount would be. To this, one would needs to add an estimate of the lost interest earnings over time using a low risk long term interest rate. Next, an estimate of the revenues and costs associated with private practice must be made. While it may not be possible to obtain precise information related specifically to the PA, one can utilize private practice Private Practice or Not: Economic Considerations for the Physician Assistant 2 of 5 data to elicit trends in both revenues and costs that most likely would have effect on their practices and salaries. For the following analysis, we will primarily utilize data from office based private practices of primary care physicians. This is viewed as being the most akin to the PA profession. For ease of comparison, it has been determined that only data from various surveys conducted by Medical Economics over the past ten years related to office-based MD's and DO's in office-based private practice will be utilized in the following analysis. A limitation is that this may not be the most exact or best data available. In fact, professional organizations may possess more specific data necessary for the final decision making process. While there is no reason to believe the exact same population was sampled and responded to each of the surveys, the nature of the list gives some confidence that it is representative. It should be noted that the subsequent revenue and cost data is presented on a per physician basis. Tables 1 and 2 present data related to the revenue side of the picture. Median net earnings for 1995 and 1999 are presented in Table 1 and total compensation for 2002 and 2003 in Table 2 . While these are not strictly comparable, for eliciting a trend they serve the purpose. The data for 1995 and 1999 show either almost no growth or even a loss in year earnings when inflation is accounted for (consumer price index is utilized as a measure of inflation over the period). The total compensation picture for 2002 to 2003 is mixed across the various specialties but pretty much flat. Figure 1 Table 1: Median Net Earnings ($)