Buy-In: A Scam or Typical Hurdle in PP?
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Is this not the norm? Most partnership tracks Ive looked at are about 2 years with starting salaries in the 300s. Your salary going to the 450-500 for partner. That is a 300K buy in over two years.
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There is always a "buy in" of some kind. If there is a physician owned ASC, don't expect to be granted ownership in that. It is almost certainly a separate entity.
It is a scam to which people have grown used to. What asset are you buying? If you cannot answer this you are being shafted.
I compare partnership tracks to old pyramidal surgery residencies. They shaft you because they can and you are willing.
Imagine you were the contract owner with the hospital. You would want the best anesthesiologists to work for you so that the hospital keeps renewing with you. The best people cost more money. They should actually go out on a limb and offer you the best deal possible. That's how I would run things.
I compare partnership tracks to old pyramidal surgery residencies. They shaft you because they can and you are willing.
Imagine you were the contract owner with the hospital. You would want the best anesthesiologists to work for you so that the hospital keeps renewing with you. The best people cost more money. They should actually go out on a limb and offer you the best deal possible. That's how I would run things.
If this gig is in a desirable local or the city where you just have to work and live then your going to have to take what you can get in this current job market. My advice would be to "buy in" and in a few years who's going to care. If your looking at gigs nation wide, I would avoid buy in's. 😀
I don't think a "buy in" is what new grads should gravitate to in this day and age. Where I did residency, the big PP group down the street would hand pick residents to join their practice. 200K for 2 years. We have many ex-chief residents at that practice. Now days, they are having a hard time getting new residents to join them. I even saw a gaswork post some months back. Residents are wising up.
IMHO, I think that until your debt to income ratio is near a positive number, you should seek out an "eat what you kill" scenerio. Then, move to your dream job. My 2 cents.
IMHO, I think that until your debt to income ratio is near a positive number, you should seek out an "eat what you kill" scenerio. Then, move to your dream job. My 2 cents.
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Would someone be willing to explain what the term "buy-in" means? Maybe I'm the only one who is incredibly stupid when it comes to this stuff, but I doubt it.
A buy-in refers to a cash purchase of an ownership share. In many practices, in lieu of paying cash, you pay by working for less than your peers for a period of time. In theory, this salary would also be less than your accounts receivable. That's how the practice makes money. In times of security, buying into a group might make sense. If you know they're going to be there at the end of the buy-in, that the hospital isn't going to cancel their contract and hire an AMC, and if they're not going to shaft you at the end of your buy-in period, it can be a good deal. Of course, none of these things is certain, and if any of them occurs, at the end of your buy-in period, you are without a job and have just spent the last few years earning less than you could have if you had taken a job without a buy-in.
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ownership = security. That has been the historical relationship.
An anesthesia group will trade you the security of ownership in return for working harder for less for a period of time.
Historically, paying up for ownership has been a good deal for many. For many others it has been a lousy deal for many reasons- mostly being screwed by older docs.. Given the volatility and uncertainty in healthcare and the economy today and the large number of unscrupulous docs who are more than willing to screw their bretheren. "Paying up" is less likely to be a good deal going forward. Look at each practice individually. For an ASC based practice it is even less likely to be a good deal.
IMO the only partnerships worth "buying into" today are large groups that have a deep bench (well credentialed, multiple fellowship trained docs) have had the exclusive contract for decades, and are offering a true equal partnership.
My father-in-law's radiology group had what he described as a fair and reasonable contract with his old hospital for >20 years. It renewed like clockwork every 3 years. Over the years they worked with the hospital trying whatever they wanted to try to control costs. Reading from home, coverage for angio's, etc. in the middle of the night, late night reading from India, etc. This year they lead them along until the 11th hour (and 59 minutes) and said, "oh BTW we gave the contract to another group, sorry." They had 4 weeks notice.👍 They could delay the renewal that long because of a clause in their contract regarding when the hospital was in financial trouble. Turns out that the new guys were already being credentialed and the chief of the medical staff had no idea that the old group didn't know that they were being sacked.👍👍
Buying into a group now is not necessarily a good idea for many reasons. Not the least of which is little loyalty, ceaseless hospital/ASC penny pinching, and the uncertain anesthesia payment future.(Obamacare) You might slave away, working harder for less, only to find nothing there for you at the end of the rainbow. It could be particularly bad in a few years for the guys exclusively doing their own cases. We seem safe for now, but it could all change quickly.
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The problem is that your "buy in" time is also your 1-5 year audition. They could can you if you don't fit in. However, if you buy your way in upfront and turn out to be a turd, they're screwed.
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You can easily be fired depending on the bylaws of the group and the contract you sign. You don't have to "do anything bad" at all. Contracts typically have "terminate with reason" and "terminate without reason" clauses which may require a different number of partner votes; Perhaps majority vs 2/3 majority, but they can still can you without reason. You might get severance if it's a can w/o reason, but it might be moot if your contract says you first have to complete your buy-in to be eligible for severance. There's many ways to fire someone. They might convince the hospital medical "board" to not renew your privileges. Without privileges at the hospitals you service, you can't be a part of the group. To get those renewals, you have to get your partners or some other physicians to fill in "letters of rec" for you. A simple misunderstanding by you and a surgeon could earn you a verbal or written warning of pretermination by your board or group. Then the next time you allegedly "screw up," you're out. Bye bye.
I second Sevo and Urge's recom's - don't settle for anything greater than 1 year partnerships and a modest buy-in. In fact, the buy-in really should only be an interest-free loan for the AR's that you'll be paid but haven't earned yet, plus maybe a little to go in a locums fund should you leave and they need to hire someone in the interim prior to filling your spot, in a truly equitable group. Also, this buy-in should be reimbursed back as a buy-out when you retire or move.
There's a hell of a lot of things in employment contracts that can set you up for disappointment or make it hard for you to move/leave your current job should you not like it.
If it's to see if you're an ass and don't fit it, 6 mo's time is enough to know somebody well enough to decide that. So, take it for what you will, but if you're making the group money over a period of years for what really doesn't amount to any security, as others have mentioned (hospital contract is not renewed), then you're really SOL.
As I'd mentioned above, easily not true. Especially if you don't have the resources to "fight" a wrongful termination, you're SOL. Joining a group can be like being on Survivor. It's a constant contest of gaining the most alliances so you don't get voted off the island or forced into undesirable circumstances. Even if you're a full partner, if you haven't got the votes for issues that are important to you - too bad. Just being a partner doesn't necessarily mean ****. You've bought nothing. You've got no security. You just have a vote. A single vote. (Make sure you at least got a vote) And you might get your fair share of the profits that you've actually EARNED. (Unless you've joined one of those pyramid schemes which make money off the backs of younger newer partners, then... it might be different.)
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I agree.
It seems like most of the attendings on here are somewhat level headed.
I think if you are a US grad and you dont have 'too many problems'...dont do this buy in business or a partnership track >1yr. It sets bad precedent to the owners of the group who will continue to 'abuse' new grads.
I think when we graduate from residency the thought of 200K seems like a lot of money. In reality it's not much! Pick and choose your job. It will force the employers to change their hiring habits.
It seems like most of the attendings on here are somewhat level headed.
I think if you are a US grad and you dont have 'too many problems'...dont do this buy in business or a partnership track >1yr. It sets bad precedent to the owners of the group who will continue to 'abuse' new grads.
I think when we graduate from residency the thought of 200K seems like a lot of money. In reality it's not much! Pick and choose your job. It will force the employers to change their hiring habits.
There are a lot of good posts here and the general feeling seems to be that "buy-ins" are bad.
Well, I got to tell you guys that you need to consider a few more things. First, do any of you guys (generic term) think that a new grad is as valuable as a seasoned veteran? Secondly, if a group has been around for many years and has secured a rapport with the hospital and the medical staff, do you think you are entitled to just walk in and claim full benefits if you haven't been around for the previous years and put forth all the additional work that the other partners have put forth to get to this position? Do you feel that you are entitled to all the benefits that the most senior partner may be entitled too? This guy has set the bar for you and now you are going to walk in and be an equal partner from day one? I don't think so. You will need to be on a trail run before they will offer you the pot of gold. Just as you should look at them the same way. You should be trying them out to see if they fulfill your needs. 1 year is usually all that is needed but if it is a multi-million dollar group (ie: crna mill) then you can expect more than a year unless they are desperate. But don't worry, you can always pass on the offer and someone else will take it.
So don't get to caught up in the "buy-in" mentality. If the practice is in the location you like, the type of practice you want, and the members seem to be your type of people then you should be happy to give them a trail as they should be happy to give you a trail. Not to mention that the group has been around for many years, and yes I am aware of long term groups getting the boot but thats the breaks and you need to try to predict the stability of the group (this is difficult but so is life).
Finally, I find it sort of arrogant (I know, I may be the most arrogant person here) that new graduating residents think they can be as productive as a seasoned veteran and therefore, don't need to accept any "buy-in". There is plenty more to a good group than just billing units. And if you are offered a position without a "buy-in" then it should be a W2 position (hospital employeed for those of you that don't know). If not then I'd cautious.
Don't get too caught up in yourself.
Well, I got to tell you guys that you need to consider a few more things. First, do any of you guys (generic term) think that a new grad is as valuable as a seasoned veteran? Secondly, if a group has been around for many years and has secured a rapport with the hospital and the medical staff, do you think you are entitled to just walk in and claim full benefits if you haven't been around for the previous years and put forth all the additional work that the other partners have put forth to get to this position? Do you feel that you are entitled to all the benefits that the most senior partner may be entitled too? This guy has set the bar for you and now you are going to walk in and be an equal partner from day one? I don't think so. You will need to be on a trail run before they will offer you the pot of gold. Just as you should look at them the same way. You should be trying them out to see if they fulfill your needs. 1 year is usually all that is needed but if it is a multi-million dollar group (ie: crna mill) then you can expect more than a year unless they are desperate. But don't worry, you can always pass on the offer and someone else will take it.
So don't get to caught up in the "buy-in" mentality. If the practice is in the location you like, the type of practice you want, and the members seem to be your type of people then you should be happy to give them a trail as they should be happy to give you a trail. Not to mention that the group has been around for many years, and yes I am aware of long term groups getting the boot but thats the breaks and you need to try to predict the stability of the group (this is difficult but so is life).
Finally, I find it sort of arrogant (I know, I may be the most arrogant person here) that new graduating residents think they can be as productive as a seasoned veteran and therefore, don't need to accept any "buy-in". There is plenty more to a good group than just billing units. And if you are offered a position without a "buy-in" then it should be a W2 position (hospital employeed for those of you that don't know). If not then I'd cautious.
Don't get too caught up in yourself.
Just a few comments re: Noyac's (I can fully see where's he's coming from)
1) Not all new hires are fresh out of training.
2) A new grad may very well bring valuable skills to the table: fellowship training, take more call, more experience with new technology/techniques like ultrasound-guided blocks, robot hearts, experience with drugs like dexmedetomidine, glidescope proficiency if not mastery and multiple other uses w/ glidescope other than straightforward intubation (you'd be surprised how many people don't use the glidescope well or aren't capable of intubating with either hand w/ a glidescope), newer vent experience; New grads aren't entirely useless just cause they aren't seasoned in private practice. They have a lot to contribute, notwithstanding enthusiasm.
3) Some groups have less productive senior partners depending on the way the group compensates; Just cause you're new doesn't mean you don't work hard or efficiently.
Some of these are playing devil's advocate, but are things I've observed. Ultimately, buy-ins are prone to the laws of supply and demand. If there's a high demand to be in particular place, groups "can get away with" having longer partnership tracks and milking the juniors for more and withholding privileges/perks for more senior partners.
You decide if it's worth it, the buy-in is acceptable to you and whether it's a group/locale you'll be satisfied being in. During your negotiations, it never hurts to ask; If they want you, they'll make you an offer. If they've got people lining up to be milked, well... show 'em your teat-ies.
1) Not all new hires are fresh out of training.
2) A new grad may very well bring valuable skills to the table: fellowship training, take more call, more experience with new technology/techniques like ultrasound-guided blocks, robot hearts, experience with drugs like dexmedetomidine, glidescope proficiency if not mastery and multiple other uses w/ glidescope other than straightforward intubation (you'd be surprised how many people don't use the glidescope well or aren't capable of intubating with either hand w/ a glidescope), newer vent experience; New grads aren't entirely useless just cause they aren't seasoned in private practice. They have a lot to contribute, notwithstanding enthusiasm.
3) Some groups have less productive senior partners depending on the way the group compensates; Just cause you're new doesn't mean you don't work hard or efficiently.
Some of these are playing devil's advocate, but are things I've observed. Ultimately, buy-ins are prone to the laws of supply and demand. If there's a high demand to be in particular place, groups "can get away with" having longer partnership tracks and milking the juniors for more and withholding privileges/perks for more senior partners.
You decide if it's worth it, the buy-in is acceptable to you and whether it's a group/locale you'll be satisfied being in. During your negotiations, it never hurts to ask; If they want you, they'll make you an offer. If they've got people lining up to be milked, well... show 'em your teat-ies.
Having searched the job market 1-2 years ago I can confidently say that in my neck of the woods, virtually any reasonable job that you would want comes with a buy-in of some sort.
Now how it works is debatable. In many desireable locations, buy in of time equals 4-5 years. That's a long time IMHO and too long for me. I took a far shorter buy-in time (although didn't really see anything of only 1 year duration).
How can buy-ins work?
Time: You put in x number of years at a set salary and the group keeps what you generate beyond that.
Money: Often combined with time in various amounts. While putting in a far shorter amount of time at a salary, you also have your salary docked a slight amount for a few years to make up for some portion of your share of accounts receivable that you will be making income off of. Doesn't sound nice, but most of these practices also give a lump sum payout when you retire/leave the practice to make up for your future income from current accounts receivable.
I don't think buy-ins are terrible and they are becoming very commonplace these days. What I think is important is to know people in the partnership before you join. Ask how many people they have hired in the last 5-10 years that didn't become partners. Ask how long each of the partners has been there and how many they've lost to anything besides retirement in the last 10 years.
I joined a group where I had multiple trusted contacts from residency that has virtually no turnover the last 10-20 years and happened to have an opening that I lucked into in terms of timing.
Now how it works is debatable. In many desireable locations, buy in of time equals 4-5 years. That's a long time IMHO and too long for me. I took a far shorter buy-in time (although didn't really see anything of only 1 year duration).
How can buy-ins work?
Time: You put in x number of years at a set salary and the group keeps what you generate beyond that.
Money: Often combined with time in various amounts. While putting in a far shorter amount of time at a salary, you also have your salary docked a slight amount for a few years to make up for some portion of your share of accounts receivable that you will be making income off of. Doesn't sound nice, but most of these practices also give a lump sum payout when you retire/leave the practice to make up for your future income from current accounts receivable.
I don't think buy-ins are terrible and they are becoming very commonplace these days. What I think is important is to know people in the partnership before you join. Ask how many people they have hired in the last 5-10 years that didn't become partners. Ask how long each of the partners has been there and how many they've lost to anything besides retirement in the last 10 years.
I joined a group where I had multiple trusted contacts from residency that has virtually no turnover the last 10-20 years and happened to have an opening that I lucked into in terms of timing.
Every insurance carrier in the US thinks so, or do they pay for experience?
I don't have any issues with a 1-2 year "buy in" process. Stay away from those groups with much longer. My sister was in a 5 year partnership track. Essentially the group said, see ya later after 5 years...and thanks for giving up over 1 million dollars in your hard earned money that we screwed you over by not making you a partner.
It is what it is; a free market. Those with the contracts dictate their terms.
Sure you will take less money (say make $250K while the partners make 400-500K).
That's not the real issue. The issue is as the other poster stated, the "terminate without clause" portion.
Means at around month 18 of your 2 year "buy in, making much less money", the partners of the group decide not to "renew" you....aka, you aren't going to be a full voting partner. Essentially you would have forked over 200-400K of hard earned money for nothing.
The key is to ask to have your malpractice tail covered if you don't make partner. Malpractice tail (for 2 years) really only costs around 15K-25K in most states. That's the big red flag. If the group doesn't want to negogiate paying your tail if you don't make full partner, I would be very reluctant to join the group. It's so obvious. They don't want to even pay your tail if you leave; that's a much smaller amount than making you partner. If they don't want to use this money to pay off your tail, what chances are that they want to share their big profits with you by making you a partner.
It is what it is; a free market. Those with the contracts dictate their terms.
Sure you will take less money (say make $250K while the partners make 400-500K).
That's not the real issue. The issue is as the other poster stated, the "terminate without clause" portion.
Means at around month 18 of your 2 year "buy in, making much less money", the partners of the group decide not to "renew" you....aka, you aren't going to be a full voting partner. Essentially you would have forked over 200-400K of hard earned money for nothing.
The key is to ask to have your malpractice tail covered if you don't make partner. Malpractice tail (for 2 years) really only costs around 15K-25K in most states. That's the big red flag. If the group doesn't want to negogiate paying your tail if you don't make full partner, I would be very reluctant to join the group. It's so obvious. They don't want to even pay your tail if you leave; that's a much smaller amount than making you partner. If they don't want to use this money to pay off your tail, what chances are that they want to share their big profits with you by making you a partner.
It's not all about the billing Urge and you know it.
Very good points here. Long (4-5 yr) partnership tracks are IMO too long. A group should know whether your a keeper or not after a year. After 1-2 yrs you should be full pay and benies but some groups may hold you back when it comes to voting rights for a few more years. THis is debatable for me but at least they are not making money off you any longer.
And it's called a "termination with or without cause" not clause. Make sure your contract requires they terminate "with cause" only. This protects you from being let go at their discretion and legally they need to have a reason to terminate you and if not then they must pay a severance fee which should be somewhere around 1/3 -1/2 of your yearly income.
The malpractice tail coverage is a great point here. Negotiate this as well. Just because there is a partnership track doesn't mean you can't negotiate a few things that others may not have done. I managed to negotiate a sign on bonus and a shorter partnership track in my first gig that the other new members were somewhat miff'd about when they found out but it didn't matter since I didn't remain at that job.
Responses:
1) True but they are still not guaranteed to be a good fit either. I'd say most experienced anesthesiologists can manage to negotiate a shorter track like 6months to 1 yr as opposed to 1-2 yrs.
2) Yes, a new grad will have new skills. I'd say that this is a benefit but not as huge as some would think. A lot of new technologies have come out since I graduated and not one of them has been taught to me by a new grad. But they don't "usually" know many other very important skills, like dealing with administrators, negotiating contracts with insurance co and administration, dealing with difficult surgeons. They haven't been on committees which is important to a group. They may not be a efficient with their time. I can go on but you know what I'm talking about.
3) the "less productive" members are a big red flag to me. If a member is not pulling his or her weight then they need to be down graded to fit their production. For example, if they bill 2/3 as much as the others then they should take home less. Billing isn't everything like I've said here. It's difficult to explain but if your in an all MD group then it's a little easier. Just do the pooled unit system. But if it's an ACT model then you need to average out the funds with the time involved. Call should be equal and if not then it should be compensated.
A few other things. Many private groups have an office with staff, collateral. This costs them money but also can be worth a substantial amount. The partners have all put their share to purchase these things. You need to put in your share as well. It can be a straight hand over of money or it can be in the form of a partnership track.
In some cases, your partnership interest can indeed be part of your estate. And rest assured, it has value in a divorce proceeding. 😉
your post and posts as usual reek of arrogance.
Of course new grads can be as productive as a "so called season veteran" why not. I was. I didnt cherry pick cases. I didnt want to leave early. I didnt expect to get paid even if i wasnt working. I did more cases then 2 of the senior guys put together. I took 2 weeks off the whole year.. Is that productive enough for you? Eight years later, guess how much vacation I tool last year? ten days. New grads can absolutely be as productive if not more productive then seasoned veterans.
a word about buy ins.. there is no bigger hoax that has been pulled in anesthesia then the buy in. the groups wants you to think theyve built something. They havent built squat. they dont bring patients to the hospital.
And this buy in only thrives because we are training too many anesthesiologists. WOuld never exist if the numbers were less.
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yeah but at least he admitted it..............
Seriously though, relax. Noyac makes some good points.
Personally, for a great group I think a 1-2 year buy in is reasonable.
I think anything more is a scam.
Just my 2 cents.
I think this is the more challenging part of transitioning from residency to PP. As a new grad, you may find yourself at the round table with little experience. As non-clinical as it might be, it is worth something to a group when you are able to provide good results with these non-clinical tasks. I am glad I have people in my group that have been through the system for 15+ years.
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For us it's two things:
1. a lower salary for two years which more or less covers the amount of accounts receivable that the group is paying out to a departing doc.
2. Partnership with full voting rights at two years.
3. Rights to accounts receivable start to accrue at the two year mark. Full rights over these two years (4 years after you start). We have had people leave right after partnership years ago and it caused hard feelings so we added this vesting schedule.
4. A buy in at two years for the purchase of stock in our P.C. The amount is quite modest and reflects the book value of our non-cash assets (office , equipment etc.).
5. How in the hell do you guys manage to make 4-500k plus benefits per year? Benefit costs including payroll taxes generally run 90k per year.How many cases are you doing?
1. a lower salary for two years which more or less covers the amount of accounts receivable that the group is paying out to a departing doc.
2. Partnership with full voting rights at two years.
3. Rights to accounts receivable start to accrue at the two year mark. Full rights over these two years (4 years after you start). We have had people leave right after partnership years ago and it caused hard feelings so we added this vesting schedule.
4. A buy in at two years for the purchase of stock in our P.C. The amount is quite modest and reflects the book value of our non-cash assets (office , equipment etc.).
5. How in the hell do you guys manage to make 4-500k plus benefits per year? Benefit costs including payroll taxes generally run 90k per year.How many cases are you doing?
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worked with a busy private group during Ca3. put the tube in just as fast, took it out just as fast, chatted with the nurses and surgeons just as well as the other guys. able to go from one room putting in a blocker to the next putting in u/s guided catheter to next doing a peds case without ANY delay.
while i agree with you that older attendings may have more clinical and administrative experience - this does not necessarily mean greater productivity/billing.
buy ins are about one thing only - money in the pocket of senior partners. that money is not going into the "business" because there is no "business." you're not actually buying any equity. you're just bribing the already present anesthesiologists to ALLOW you to keep your fair share - money that YOU earn. it is what it is.
you don't have to do it. stay in academics - there are good places out there. do locums. do non-partnership track jobs. it's all supply and demand. once people stop groveling and paying what essentially amounts to hundreds of thousands of dollars in bribes for the privilege of getting to keep what you earn, these groups will have to change their practices - that won't happen anytime soon, of course.
while i agree with you that older attendings may have more clinical and administrative experience - this does not necessarily mean greater productivity/billing.
buy ins are about one thing only - money in the pocket of senior partners. that money is not going into the "business" because there is no "business." you're not actually buying any equity. you're just bribing the already present anesthesiologists to ALLOW you to keep your fair share - money that YOU earn. it is what it is.
you don't have to do it. stay in academics - there are good places out there. do locums. do non-partnership track jobs. it's all supply and demand. once people stop groveling and paying what essentially amounts to hundreds of thousands of dollars in bribes for the privilege of getting to keep what you earn, these groups will have to change their practices - that won't happen anytime soon, of course.
As much as I have been a staunch defender of academics, it is NOT a place where a new grad is safe from this type of behavior. In academics, you get paid a base salary plus a bonus for overtime work. The base salary constitutes the majority of the paycheck.
Guess who gets the bigger base? The older guys.
Guess who gets all the residents? The older guys
Guess who takes all the call? The junior guys.
In essence, old guys get paid more to do far less work. Takes a LONG time to make it into the senior ranks. It's almost like having a 10-20 year partnership track!!
Not all buy-ins are unreasonable. You have to consider each offer.
One PP job I considered was not bad at all. The buy-in was only about $100k over 2 years. Partners made their share of full income and had another revenue stream generating $15-20k each. I thought that was very fair. My buddy is a partner at a place making about $500k. His partnership track was 4 years and his buy in was over $1million. I thought he was crazy. He's happy now, and doing very well. The buy in works out to only $50-60k over 20 years there. If he left after 10 years as a partner, he's not doing much better than me, and working harder. Especially in the first 4 years. The new guys take extra call, and most holidays.👍 Once you're in the club, you're golden. As long as the club is still standing.
One PP job I considered was not bad at all. The buy-in was only about $100k over 2 years. Partners made their share of full income and had another revenue stream generating $15-20k each. I thought that was very fair. My buddy is a partner at a place making about $500k. His partnership track was 4 years and his buy in was over $1million. I thought he was crazy. He's happy now, and doing very well. The buy in works out to only $50-60k over 20 years there. If he left after 10 years as a partner, he's not doing much better than me, and working harder. Especially in the first 4 years. The new guys take extra call, and most holidays.👍 Once you're in the club, you're golden. As long as the club is still standing.
I get out a kick out of groups that talk about the practice they've built. I don't know about where you guys live, but I have never seen any marketing, no billboards or advertisements saying "Come have anesthesia with us," nor any patients telling there surgeons "I will only have surgery at Community General because Induction Anesthesia has the contract there." Partnership tracks are about supply and demand for anesthesiologists, plain and simple.
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I may be arrogant but at least I admit it. Another thing, I am also mature enough to avoid picking fights on an internet forum. You and I have always disagreed. You have a different POV. But what I don't understand is why you take things so personally?
Your statement above just continues to show how you don't understand the business of anesthesia. As I mentioned in my post that you quoted, there is much more to productivity in a group than just billing units. Now I'm sure you are he most productive anesthesiologist there ever was but again you fail to grasp what is "also" important in a good group.
To everyone else out there look at things with an open mind. Buy-ins are your choice. You don't have to accept them. Some groups with buy-ins will allow you to work with them and never become a partner. You eat what you kill in this case. For some people here, this is all they want but for others there is more to a group and you may need to accept their terms. I am not advocating that you be an servant for 4 yrs but merely saying that you need to look at the situation and make your decision. I believe that being a productive member of a good group is more rewarding than just billing units and going home.
Funny how some people never grow and therefore, don't see this side of anesthesia.
I've said it before on here, but the first few to six months of private practice are harder than residency. Cases are the same, generally healthier, but that's not the hard part. It's the intangibles, stuff you never even thought about in residency and I don't care where you trained. You become a mediator, consultant, employer, productive med staff member and put on your best Press-Ganey face for EVERY single case/interaction with a patient or family member. Not easy. Cases are the easy part.
One note about something you buy in to...group billing rates.
Our group has outstanding contracts with the major insurers in the area and since we are essentially a monopoly we have mega negotiating power. As a new grad, I can't conjure those reimbursements out of thin air. But since I joined a group, everything I do is billed at the same rate as everybody else.
It should also be pointed out that buying into a private practice group is not limited to anesthesiology as a specialty. As far as I know it's quite common across all medical specialties.
Unrelated to that someone mentioned your first of PP being a learning experience. I'd agree. As a resident I probably did maybe 10-20 cases a week for 49 weeks a year. Supervising 3-4 rooms at a time, I now take care of probably 10-20 patients a day (personal record is 47 in a day at the outpatient surgery center) and they aren't any healthier than what I saw as a resident. I probably took care of more patients in the first 6 months than I did my entire residency combined. The case acuity is the same, but the speed and volume is cranked up considerably and it took me a good month or two to really get up to speed and be able to stay on top of that many sick patients at once between the preop, OR, and PACU.
Our group has outstanding contracts with the major insurers in the area and since we are essentially a monopoly we have mega negotiating power. As a new grad, I can't conjure those reimbursements out of thin air. But since I joined a group, everything I do is billed at the same rate as everybody else.
It should also be pointed out that buying into a private practice group is not limited to anesthesiology as a specialty. As far as I know it's quite common across all medical specialties.
Unrelated to that someone mentioned your first of PP being a learning experience. I'd agree. As a resident I probably did maybe 10-20 cases a week for 49 weeks a year. Supervising 3-4 rooms at a time, I now take care of probably 10-20 patients a day (personal record is 47 in a day at the outpatient surgery center) and they aren't any healthier than what I saw as a resident. I probably took care of more patients in the first 6 months than I did my entire residency combined. The case acuity is the same, but the speed and volume is cranked up considerably and it took me a good month or two to really get up to speed and be able to stay on top of that many sick patients at once between the preop, OR, and PACU.
And you can thank the senior members of that group for negotiating those contracts which you are benefiting from.
This is true somewhat but the better groups would still have those buy-ins until there just were not any more residents to hire. However, this would cause bigger issues not related to buy-ins.
I know this is an old thread, but can someone explain number 3 to me?
Based on the example above: lets say partner pay is 400K, Salary year 1 and 2 is 250k, buyin of of 100K in year 3 and 4. Full financial partner 4years x 400K = 1600K vs new guy 2 years x 250k+(400K-100K) x 2 years = 1100K.
So is the buy in 125K or is it 500K (4 year difference between new guy and partner pay)? Why would the group structure it as in the example above, as opposed to 4 year partner track with salary ttl over 4 years equal to 1100K? Are they the same? Or is there an advantage for the group to have one structure over the other?
Irrespective of group stability/history/hospital contract/stipends ect, how would you determine wether or not a pp offer with a buyin is worth/justifies the payoff (from a pure financial standpoint) ? For you Sr guys in PP, how do you determine the buyin amount or that the new hire will be subject to in order to attract good candidates and maintain a strong practice? Has the increasing presence of AMC's effected your non-partnership track offers? If you take the theoretical example above, the salary difference of 500K over 4 years is > 1 year of full partner pay (400K).
Would love to hear how this works in different practices. Thanks!
And I agree with Noy...Relationships with administration and surgeons are difficult to quantify, but take a ton of effect and time to develop and maintain. New grads should't expect to just walk in and make as much as the SR guys.
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Bogus. I never understood this. Everyone claims to be the ultimate capitalist until it suits them not to be. Exclusive contracts in anesthesia contributed to the demise of the specialty. The old guys get the contract and then rest on their laurels (or a$$es). Why not let a bunch of young guys come in and outcompete the old guys who can't deliver an anesthetic anymore? That's capitalism, right?
I know you are upset with the practice that you were or possibly still are in, but I've rotated through (as a resident) private practice groups where the old guys work hard, are good people, deliver a good Anesthetic, and are great mentors to the young guys in the practice. Residents I know have gone on and taken jobs there as a result and have been very happy and feel fairly compensated for their work. I don't think all pp groups are bad situations like yours. Ive followed your posts and have learned a good amount from them (and I'm glad you call out the shady places and speak up), but I don't think all of the older anesthesiologists are washed up greedy businessmen. I sincerely hope you have or do find a way out into another practice or field all together. Being miserable with your job is no way to go through life.
So if a group is fair, stable, and has great leadership, what should the buy in look like?
Our group has a buyin.
1st year =salary of our lowest salary in past 5 years minus roughly AR. Huge improvement from my initial salary when I joined (100k higher). We increased due to the starting offers at similar hospitals in the state.
2nd year =90% partner pay
At end of 2nd year is partnership vote by entire multi specialty group.
Prior to partnership we give full voting rights on clinical issues. Right to be present for financial meetings, but no vote for that.
No further buy in for our department, however you have to buy the multi specialty group stock to be partner in that group.
Doing that is basically required, and cost is in the hundreds of thousands range. Returns after tax have been >10% for the past 15 years, some years in the 30% range. This was a very tough pill to swallow as a new grad, and almost scared me off. I'm glad it didn't.
I think aside from the multispecialty group buy in these numbers are reasonable for a "fair" group.
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1st year =salary of our lowest salary in past 5 years minus roughly AR. Huge improvement from my initial salary when I joined (100k higher). We increased due to the starting offers at similar hospitals in the state.
2nd year =90% partner pay
At end of 2nd year is partnership vote by entire multi specialty group.
Prior to partnership we give full voting rights on clinical issues. Right to be present for financial meetings, but no vote for that.
No further buy in for our department, however you have to buy the multi specialty group stock to be partner in that group.
Doing that is basically required, and cost is in the hundreds of thousands range. Returns after tax have been >10% for the past 15 years, some years in the 30% range. This was a very tough pill to swallow as a new grad, and almost scared me off. I'm glad it didn't.
I think aside from the multispecialty group buy in these numbers are reasonable for a "fair" group.
Sent from my iPhone using SDN mobile app
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since the first year salary is now 100k higher than when you started, your group must be doing well and profits increasing right? What has led to an increase in profits?
Can you explain how the stock works? (Most new people like me have zero idea about how a practice runs from a business aspect), How do you determine the price? How do finance the hundreds of thousands of stock that the new guy is required to purchase? Do you hang on to the stock as the price goes up then cash out at the end? Or does the stock go up and then you sell shares and take the profit as income? I literally have no clue how something like that works, but I find it interesting, can you explain it to me?
Its good that you are starting to think about this now. It will make your job search more meaningful. Keep in mind if you DONT engage in the path to ownership (which I agree can be sleezy and frustrating) you can keep your pride while they keep your 100-200k extra salary..
One takeaway from all of this discussion is that the terms "buy in" and "partnership" can mean very different things. Finding out what they mean is essential to understanding what you are getting into, but it isn't always easy to find out the true structure and finances of a group from the outside. Only after a certain time with the group will the actual truth be revealed to you, good or bad. So be flexible and dont move your kids/buy a house/leave a good job for this uncertainty....
Key questions: How much do partners make? Is there a buy in? If so how does it work? How many years to partner? How likely is it that Ill make partner after that time?
Partners usually make 500k ish in an anesthesia group
Buy ins work all different ways. Often just the years of underpaid labor are enough. Asking for $$ on top of that seems like a lot to me.
Usually 2-4 years to partner.
Usually some type of marker along the way that ensures you will be partner. (sign papers/vote after 1yr?)
I think the mystery starts to become more clear when you start talking actual numbers and working for the group... for example:
Your offers:
AMC 350k 4 calls/mo no increases or decreases or performance markers. possibly 25k more in ot
PP group A 250k 3 yrs 4 calls/mo to partner where partners make 500k
University 290k with slower pace and set pay increases unless you are really bad
With the PP group yes you are "giving up" 250k a year to the partners, or are you "giving up" 100k per year compared to the AMC (which is your next highest offer). That doesnt matter.
However you look at it, its your only path to the bigger money.
Now with this being said I have seen some very shady groups offer "jr partnership" of 350k or even lower for an undetermined amount of time until "sr partners" advance them which never happens for decades or ever. It all depends on the numbers. The numbers depend on your local job market comparing AMC, other PP, and university offers.
So to describe how the more sleezy places do things here is what happened to me. I took a "partnership" track position with the idea being that I make roughly 100K less for the first two years and then I was offered partner, with a small buy-in. Well two years came and went and then after a little grumbling I was offered a "buy in" for 500K up front or I could continue to work at a reduced salary for 4 years. Lastly, when asked what partner entitled me to, I was told it only gave me profit-sharing. So at the end of the day I wouldn't get **** from being a partner. I almost walked out the moment I was given this offer but decided I may as well finish my dinner and have an expensive bottle of wine on them. After talking to several people in my area this seems to be the way to screw the young docs.
While it may or may not have been a scam, I can't say for sure until you detail what the profit sharing is/was. Most lucrative private groups distribute most of the cash as profit sharing since you can lessen your tax burden compared to taking it as salary. Whether or not it was a fair offer, though, can probably be determined by how trust worthy the individuals are.
The scam part wasn't the profit sharing but the fact partner wasn't a true partnership based on the fact that if the group sold then I wouldn't get a partner share, ever. I would get some chunk thrown in but if partners sold for a few million each the figures I was told would be a tenth of that. Pahhhlease. That's shady.
