By Bo Claypool
Since our physician recruiters are really more like group practice consultants than mere headhunters, we go beyond consulting with you as to the immediate financial package offered to a prospective physician candidate and we actually help you structure the totality of the deal, to include buy-in arrangements for down the road, if needed.
Physician practice buy-in is a topic robust enough to have its very own website itself, but I will try to tackle it as best I can on this physician recruitment website, which is going to require several installments…this is part one and contemplates those practices offering immediate partnership.
On Buy-in / Part 1 / Partnership from Day 1!
I would say that at least once a week I have to advise either an existing client or a prospective client that they are looking to add a partner, as opposed to an employee (or independent contractor), entirely too soon. Very often the conversation goes a bit like the following:
“…and honestly to sweeten the deal we’d even be willing to offer the right person partnership from the very beginning,” says Dr. Doe.
“Why would you do that?” I reply.
“Like I said, to sweeten the deal for recruitment purposes…also, we don’t want someone to just work here for a year and then leave”
Let us scrutinize this interaction a bit further. At first, Dr. Doe says the immediacy of partnership is premised on the notion that it will help their physician recruitment endeavors. Then, when pressed a bit further, he reveals that it’s also based upon a concern that a physician will leave sooner than ideal, with ideal often being “ever.”
Let me first ask something of the reader. Have you ever heard of any other industry where such a notion is advanced? In other words, have you ever heard of two bakers who just met going into business with each other?
So why would a physician do it?
The only thing worse for a physician or group of physicians than being overworked and undermanned is being in the position where you wish you were once again.
While the wrong physician added to the practice on an employed basis can have an absolutely ruinous effect, the wrong physician added to the practice on an equity basis is even worse. Having to dissolve a partnership agreement makes parting ways exceptionally more difficult.
That said, if you are truly unhappy with a physician candidate you recruited or, conversely, they are truly unhappy with your practice, a partnership arrangement is not going to keep anything together. It’s just going to make the split more challenging. Really the best thing to promote a successful, long term relationship is to do your due diligence on a person ahead of time which is something a professional physician recruiter or physician recruitment team can help you with.
But honestly, there is no substitute for time spent with a person and most people can hide their bad habits for at least a few months to even a year before their true self emerges and it’s not until then that Dr. Doe above knows whether or not the person they have hired is “the right person” and therefore someone they want as a business partner.
I will say that often a client of ours has different, much more altruistic motives in offering partnership form day one. Very often we deal with older, financially secure physicians who have no desire whatsoever to make any money off of the professional service of another physician who joins them, but rather they just want to recruit to provide for the continuity of care for their patients, for continued employment for their staff and for the sake of perpetuity of their life’s work.
Therefore, they offer partnership because they want their newest addition to reap all financial rewards of their hard work. That’s wonderful, but it does not necessarily follow that such a thing requires any sort of equity sharing. Profit sharing does not require ownership. If you’re really that serious about not making any money off of them, why not bonus the individual to the degree where they take 100% of their respective revenue minus their respective overhead?
I must counter this article by saying that I am sure there have been plenty of scenarios where an immediate partnership arrangement worked out swimmingly and we even have a client that is probably the most successful dermatology group in all of Illinois that offers just such a thing and has it organized to where it is not problematic. But this is the exception to the rule. Generally speaking there should be some sort of partnership track. How long? I will save that for the next article.
As professional physician recruiters who have dedicated their professional careers to physician recruitment, we advise our clients on a number of matters including issues related to buy-in. If you’d care to talk with us further about such an issue, please feel free to call us anytime at 312-83-4DOCS (3627) or please fill out the form below.