Is John Pinto's private practice lecture series still accurate?

[docdoc2012]

Again those partners who get the cash upfront will be fine. Most can quit or retire. It’s the younger (non-partner at time of buyout) docs who will have to deal with things falling apart.

Most won't quit or retire. They'll probably get even less in upfront cash on the second sale and more shares. it's the eternal carrot.
Other than location, not sure what will keep the younger docs working at these groups at that point.

---

Members don't see this ad.

 

[i-doctor]

Most won't quit or retire.

I disagree. Those who sell to PE in the first place are self-selected for those who are usually near the end of their careers and want the cash.

 

[eyeeye_captain]

Most won't quit or retire. They'll probably get even less in upfront cash on the second sale and more shares. it's the eternal carrot.
Other than location, not sure what will keep the younger docs working at these groups at that point.

Agreed, a large percentage of business oriented older docs don’t want to hang up the spurs. Second sales are killer now, but with interest rates going up and history on the side of PE collapse, I wouldn’t bet big on them going forward. There definitely are younger partners who will take an upfront payday to pay off loans and live high on the hog for a while with a good salary that will carry them through while betting on things not falling apart.

I think location is the strange thing that I get, but don’t get with the younger docs. I understand as I grew up in the middle of nowhere and will never move back, but it seems like if it isn’t a major city on either coast, there’s minimal interest when they could make a killing in the heartland or in the nearish suburbs in some pretty cool places.

 

[docdoc2012]

I disagree. Those who sell to PE in the first place are self-selected for those who are usually near the end of their careers and want the cash.

That hasn't been true more recently. Yes there is typically a higher percentage of older docs in practices that sell but there are many practices where a lot of docs are late 40s to early 50s. There are plenty of younger docs in there 40s trying to sell too. It's a huge cash infusion to invest and retire , you get more if you stick around for the second sale. If you are miserable you just leave and are young enough to set up shop somewhere else. There a lot of groups with younger docs getting ready to go to market.

 

[docdoc2012]

Agreed, a large percentage of business oriented older docs don’t want to hang up the spurs. Second sales are killer now, but with interest rates going up and history on the side of PE collapse, I wouldn’t bet big on them going forward. There definitely are younger partners who will take an upfront payday to pay off loans and live high on the hog for a while with a good salary that will carry them through while betting on things not falling apart.

I think location is the strange thing that I get, but don’t get with the younger docs. I understand as I grew up in the middle of nowhere and will never move back, but it seems like if it isn’t a major city on either coast, there’s minimal interest when they could make a killing in the heartland or in the nearish suburbs in some pretty cool places.

My theory is that a lot of people in ophtho are medical heirs and don't have to worry about money. Most of the training programs are in the cities, that's what they're used to, that's what they know. They don't actively think about wealth building.

 

[solitude]

Why is the second sale so lucrative? Do the PE firms really add that much value after the first sale? If not, why would another firm buy it? And who is going to be the third buyer? Somebody gets left holding the bag here.

 

[solitude]

That hasn't been true more recently. Yes there is typically a higher percentage of older docs in practices that sell but there are many practices where a lot of docs are late 40s to early 50s. There are plenty of younger docs in there 40s trying to sell too. It's a huge cash infusion to invest and retire , you get more if you stick around for the second sale. If you are miserable you just leave and are young enough to set up shop somewhere else. There a lot of groups with younger docs getting ready to go to market.

The point has been made on here by others in the past, but bears repeating. Any PP ophthalmologist who is relying on a PE sale to fund their retirement has been careless with their personal finances. By early 50s, one should have 20 years of accumulation and the value of one's practice should be gravy. Even for the docs in their 40s you referenced, the idea of potentially ruining one's practice by selling out and then facing the potential of having to uproot one's family and move, all for a bite at the apple, reflects poor management of one's finances, and/or just plain greed.

 

[RetinaDude]

This is when things are about to get interesting and dangerous. The second PE will most likely hold the practice for a while, especially in this economy.
The opportunistic concern with keeping their physicians relatively happy will be nonexistant with the second PE. Not looking forward to watching the train wreck

From what I’ve heard, the amount of money is staggering (8 figure amounts) and the docs are quite content with their new found riches. Most now have what I would describe as F-U money, and once their contract is up, they can sail off into the sunset. Of course, it’s the older docs who have these new found riches. Any new associates will never (or very unlikely) have the opportunity to make partnership (true PP partnership).

 

[docdoc2012]

The point has been made on here by others in the past, but bears repeating. Any PP ophthalmologist who is relying on a PE sale to fund their retirement has been careless with their personal finances. By early 50s, one should have 20 years of accumulation and the value of one's practice should be gravy. Even for the docs in their 40s you referenced, the idea of potentially ruining one's practice by selling out and then facing the potential of having to uproot one's family and move, all for a bite at the apple, reflects poor management of one's finances, and/or just plain greed.

I agree. It's likely a combination of greed and poor financial management. Physicians have never been credited with being great with finances.
One of my fellowship attendings who sold their practice essentially said it was a question of taking the gamble that is payments will stay the same or the cuts will be be relatively small during your career span, or get cash upfront to have a cushion that you can invest for the future.
Another justification is the decreasing valuation of the practice shares especially from the time they were bought about 10 years ago. And people are trying to recover the ridiculous amount of goodwill that went into the buyin.
Cash in hand now and displace yourself or hope for cash to accumulate over the span of your career.
Is any of it worth sacrificing patient care and selling yourself to an entity solely driven by profits and run by people with sociopathic tendencies? Not to me.

 

[docdoc2012]

From what I’ve heard, the amount of money is staggering (8 figure amounts) and the docs are quite content with their new found riches. Most now have what I would describe as F-U money, and once their contract is up, they can sail off into the sunset. Of course, it’s the older docs who have these new found riches. Any new associates will never (or very unlikely) have the opportunity to make partnership (true PP partnership).

Yes. Depending on the multiplier you receive and the practice size. An avg size retina group with a 50-60 pt per person volume is receiving anywhere from 7-12mill per partner. However, only some of that comes as cash. The very first sales were getting all cash so the docs were literally quitting and leaving a few months in. Now they're tied there because 30-40% of that amount is vested over 4-5 years, or if a second sale happens.

 

[docdoc2012]

Why is the second sale so lucrative? Do the PE firms really add that much value after the first sale? If not, why would another firm buy it? And who is going to be the third buyer? Somebody gets left holding the bag here.

It all depends on the stock options you get and how the PE deal is structured. If you negotiate actual PE stock in the entity as a whole, you are sitting pretty. Typically your company itself isn't worth significantly more unless there's been a big overhead slash before the sale. The pes that are big enough to benefit from huge drug rebates haven't had a lot of second sales.

 

[Laradd]

Well, let's just say that John Pinto's lecture series is as accurate as a weather forecast in the middle of a hurricane. You might get a general idea, but you'll probably still end up getting wet.

 

[dantt]

The opportunistic concern with keeping their physicians relatively happy will be nonexistant with the second PE. Not looking forward to watching the train wreck

Playing devils advocate here. Why would the 2nd PE be any worse than the 1st? They're interested in the same things and are playing the same play.

 

[docdoc2012]

Playing devils advocate here. Why would the 2nd PE be any worse than the 1st? They're interested in the same things and are playing the same play.

1.They're less likely to please the doctors. The first flip is crucial, and the more new docs they can recruit, the better it is for valuation. They have to at least pretend to care for a couple of years.
2. No one has really seen past a second sale yet. The players at the level of the second sale are just as likely to hold as they are to flip. There no longer will be a short term incentive to please docs or give AF about patient care. It'll be a continuous slow squeeze.
3. Staff morale - a big staff turnover happens at the first flip. Can you imagine what it would do to staff morale if the same thing happens at the second flip a few years later? Would anyone want to work in that environment?

 

[idkididk]

How do you guys think the 2nd wave will affect younger guys like me who will be looking for jobs in the next few years? Seems like things will only be worse for young associates...

 

[i-doctor]

How do you guys think the 2nd wave will affect younger guys like me who will be looking for jobs in the next few years? Seems like things will only be worse for young associates...

Nah.. I think you should be optimistic. The state of flux—including retirements after PE, and/or people quitting—means more job openings. And starting salaries overall are starting to be bid up due to PE needing to grow and to replace retiring doctors. The net effect will be a doctor shortage for a long time. You will be coming out at a good time…

 

[RetinaDude]

I agree with I-doctor. I believe the only area where PE has failed to plan is the supply of docs. Currently, there are more ophthalmologists retiring every year than are finishing residency. All these PE practices are throwing money at the older docs so as soon as their contracts are up, you can bet many will also take that money and run. All of this combined is going to make it a buyer’s market for young docs. It’s already at a point where you can go almost anywhere you want, but PE owned practices are trying to expand and replace docs who leave. If they want new docs, they’ll have to increase their salaries. If they want to keep you, they’ll have to keep it sweet. It’s not like there’s a line of docs waiting in line behind you to take your place

 

[Slide]

I agree with I-doctor. I believe the only area where PE has failed to plan is the supply of docs. Currently, there are more ophthalmologists retiring every year than are finishing residency. All these PE practices are throwing money at the older docs so as soon as their contracts are up, you can bet many will also take that money and run. All of this combined is going to make it a buyer’s market for young docs. It’s already at a point where you can go almost anywhere you want, but PE owned practices are trying to expand and replace docs who leave. If they want new docs, they’ll have to increase their salaries. If they want to keep you, they’ll have to keep it sweet. It’s not like there’s a line of docs waiting in line behind you to take your place

The flip side is that the second owners of the PE will instead resort to cheaper labor - so comprehensive ophthalmologists may be nudged to practice outside their comfort zone in specialty work (e.g. managing medical retina, performing MIGS or filtering surgeries, aggressive refractive surgery, etc.) . Or, in states where optometrists have surgical/laser privileges, you will see an aggressive push by management for optometrists to do as much as possible. I'm basing this on seeing how PE firms in other fields have used more mid-levels to do work performed by MDs in order to save costs on wages/salary.

 

[docdoc2012]

I agree with I-doctor. I believe the only area where PE has failed to plan is the supply of docs. Currently, there are more ophthalmologists retiring every year than are finishing residency. All these PE practices are throwing money at the older docs so as soon as their contracts are up, you can bet many will also take that money and run. All of this combined is going to make it a buyer’s market for young docs. It’s already at a point where you can go almost anywhere you want, but PE owned practices are trying to expand and replace docs who leave. If they want new docs, they’ll have to increase their salaries. If they want to keep you, they’ll have to keep it sweet. It’s not like there’s a line of docs waiting in line behind you to take your place

I want to believe this is true. And it likely will be in smaller markets. Any city that is remotely desirable that is PE dominated however will still be pretty competitive because of the sheer number of people wanting/needing to be there. There is theoretically a supply-demand issue. However, many PE groups have adopted the strategy of buying referral sources like the area optometrists. In these areas, it is much harder to strike out on your own when you don't really have referral sources to turn to.
I think the key for the new generation will be a new generation of optoms and other specialty MDs trying to open shop to become our new referral sources, allowing our new ophtho grads to sustain solo/new group practices. Even patients who are disillusioned by the PE system won't really have anywhere else to turn to otherwise, and disillusioned patients cannot be relied on as your only patient base. Referral sources are key. And they are incredibly locked in under the current corporate system

 

[docdoc2012]

The flip side is that the second owners of the PE will instead resort to cheaper labor - so comprehensive ophthalmologists may be nudged to practice outside their comfort zone in specialty work (e.g. managing medical retina, performing MIGS or filtering surgeries, aggressive refractive surgery, etc.) . Or, in states where optometrists have surgical/laser privileges, you will see an aggressive push by management for optometrists to do as much as possible. I'm basing this on seeing how PE firms in other fields have used more mid-levels to do work performed by MDs in order to save costs on wages/salary.

We are entering the age of ophtho PAs. They already are doing injections in some Florida groups

 

[RetinaDude]

The flip side is that the second owners of the PE will instead resort to cheaper labor - so comprehensive ophthalmologists may be nudged to practice outside their comfort zone in specialty work (e.g. managing medical retina, performing MIGS or filtering surgeries, aggressive refractive surgery, etc.) . Or, in states where optometrists have surgical/laser privileges, you will see an aggressive push by management for optometrists to do as much as possible. I'm basing this on seeing how PE firms in other fields have used more mid-levels to do work performed by MDs in order to save costs on wages/salary.

The problem with the idea of using general ophthalmologists as “cheap labor” is the shortage of all fields of ophthalmology, whether it’s general, retina, or peds. PE will simply have a hard time finding warm bodies to fill these spots.

mid levels are well documented in almost all of the medical world except ophthalmology. Yes, ODs may be able to step in to a degree but most (and I know this is hard to believe) really don’t want to do anything higher than optometry and don’t want to take the risks of surgery and injections. There’s a small vocal OD community that does. Also, not sure how it is in other communities, but in mine, a lot of the older ODs are also having trouble recr younger ODs to take over their practices. The US population is growing, especially among the elderly, and there will not be enough docs to serve all of these pts

 

[RetinaDude]

I want to believe this is true. And it likely will be in smaller markets. Any city that is remotely desirable that is PE dominated however will still be pretty competitive because of the sheer number of people wanting/needing to be there. There is theoretically a supply-demand issue. However, many PE groups have adopted the strategy of buying referral sources like the area optometrists. In these areas, it is much harder to strike out on your own when you don't really have referral sources to turn to.
I think the key for the new generation will be a new generation of optoms and other specialty MDs trying to open shop to become our new referral sources, allowing our new ophtho grads to sustain solo/new group practices. Even patients who are disillusioned by the PE system won't really have anywhere else to turn to otherwise, and disillusioned patients cannot be relied on as your only patient base. Referral sources are key. And they are incredibly locked in under the current corporate system

This is based on the fear conspiracy that all of medicine will be consumed by PE. It’s not. My group, and plenty of others, have been approached by PE many many times. We adamantly refuse to join, and I do NOT see that changing. Within our group, it’s considered a moral compass dilemma and we are perfectly fine being private MD/DO owned. No general ophthalmology groups in our area have been purchased through PE either, and they’ve all been approached. There are plenty of PE owned groups within several hours of us but we have absolutely no fear of their presence. Even if they wanted to expand into our areas, they cannot recruit retina docs to fill the spots. Trust me, they’ve been trying for years to fill open positions just within their own communities and cannot get it done.

it used to be that places like NYC and LA could offer crappy starting salaries and they’d have graduating ophthalmologists falling all over themselves to take those jobs (ie, $90,000 starting salary in LA vs $300,000 starting in a medium sized city). Yes, those jobs still exist (they were around when I finished residency) but I don’t see them as much as I used to. If someone wants to take one of those positions, that’s their own fault and I feel no pity for them. There is so much opportunity to do well in ophthalmology, that there is zero excuse to not be successful and avoid PE.

 

[RetinaDude]

We are entering the age of ophtho PAs. They already are doing injections in some Florida groups

No we are not entering the age of ophth PAs. That’s been going on since close to the time I was in residency. Florida is an outlier with some cataract docs who really push the limits, and that is NOT something new

 

[i-doctor]

This is based on the fear conspiracy that all of medicine will be consumed by PE. It’s not. My group, and plenty of others, have been approached by PE many many times. We adamantly refuse to join, and I do NOT see that changing. Within our group, it’s considered a moral compass dilemma and we are perfectly fine being private MD/DO owned. No general ophthalmology groups in our area have been purchased through PE either, and they’ve all been approached. There are plenty of PE owned groups within several hours of us but we have absolutely no fear of their presence. Even if they wanted to expand into our areas, they cannot recruit retina docs to fill the spots. Trust me, they’ve been trying for years to fill open positions just within their own communities and cannot get it done.

it used to be that places like NYC and LA could offer crappy starting salaries and they’d have graduating ophthalmologists falling all over themselves to take those jobs (ie, $90,000 starting salary in LA vs $300,000 starting in a medium sized city). Yes, those jobs still exist (they were around when I finished residency) but I don’t see them as much as I used to. If someone wants to take one of those positions, that’s their own fault and I feel no pity for them. There is so much opportunity to do well in ophthalmology, that there is zero excuse to not be successful and avoid PE.

Yes, going back to idkididk’s original question, no matter how it plays out there will be a dire shortage of ophthalmologists in the next decade. He will be a hot commodity…like a piece of gold.

 

[docdoc2012]

This is based on the fear conspiracy that all of medicine will be consumed by PE. It’s not. My group, and plenty of others, have been approached by PE many many times. We adamantly refuse to join, and I do NOT see that changing. Within our group, it’s considered a moral compass dilemma and we are perfectly fine being private MD/DO owned. No general ophthalmology groups in our area have been purchased through PE either, and they’ve all been approached. There are plenty of PE owned groups within several hours of us but we have absolutely no fear of their presence. Even if they wanted to expand into our areas, they cannot recruit retina docs to fill the spots. Trust me, they’ve been trying for years to fill open positions just within their own communities and cannot get it done.

it used to be that places like NYC and LA could offer crappy starting salaries and they’d have graduating ophthalmologists falling all over themselves to take those jobs (ie, $90,000 starting salary in LA vs $300,000 starting in a medium sized city). Yes, those jobs still exist (they were around when I finished residency) but I don’t see them as much as I used to. If someone wants to take one of those positions, that’s their own fault and I feel no pity for them. There is so much opportunity to do well in ophthalmology, that there is zero excuse to not be successful and avoid PE.

After fairly recently going through the job search process (and having the fortune of being well connected and having good mentors), I beg to differ. It's not that jobs were being internally filled. It's just that non-PE jobs were few and far between. This was the experience of the entire class, regardless of fellowship prestige etc. Most of us were actively trying to escape PE. If a practice wasn't actively selling, they would be during our associate phase.
I'm lucky that I landed in a group like what yours sounds like. However I did have to make a pretty decent location sacrifice for it. But a non-PE job with a strong patient focus was my main priority.
It's not a conspiracy. It's actually happening. From hearing from people acquisition committees and you would be surprised how many smaller groups with younger docs are actively trying to go to market. Groups that you would never think of.
I'm hoping there are groups like yours and mine in the future for the new grads, but it might just be up to them to start their own. Hopefully we see a new wave of that. Fight the power.
This is the reality of our time. We will be a hot commodity. But we have to make sure our hands aren't tied logistically if we want to take advantage of that

 

[docdoc2012]

No we are not entering the age of ophth PAs. That’s been going on since close to the time I was in residency. Florida is an outlier with some cataract docs who really push the limits, and that is NOT something new

PEs who can't find retina docs to fill their slots will definitely be hiring ophtho PAs for injections. It's the next logical step. ODs and Comp ophtho wouldn't fit the criteria or the skill set to pay ratio. A PA doing a shots would make the most financial and medicolegal sense in terms of midlevel providers

 

[i-doctor]

This whole PE situation has occurred due to a confluence of factors. One factor rarely discussed is that many of the younger docs today are risk adverse and do not want to buy in to become a partner. It’s understandable with the expensive dollar amounts involved, fear of future Medicare payment cuts, and also with their having large student loan payments. I know a couple of docs who sold to PE primarily as an exit/retirement strategy since their young associates did not want to buy in to their practices. PE swooped in to fill that void. (However, I do not really know if their young associates were offered a fair deal)

 

[docdoc2012]

This whole PE situation has occurred due to a confluence of factors. One factor rarely discussed is that many of the younger docs today are risk adverse and do not want to buy in to become a partner. It’s understandable with the expensive dollar amounts involved, fear of future Medicare payment cuts, and also with their having large student loan payments. I know a couple of docs who sold to PE primarily as an exit/retirement strategy since their young associates did not want to buy in to their practices. PE swooped in to fill that void. (However, I do not really know if their young associates were offered a fair deal)

The issue is so many of these groups have huge goodwill components to their buy-ins. It's essentially like buying a stock that will get devalued more and more as the years go by. Other than access to a greater percentage of collections there aren't many benefits unless it's a very profitable practice with lots of OOP procedures and a shared pot

 

[dantt]

PEs who can't find retina docs to fill their slots will definitely be hiring ophtho PAs for injections. It's the next logical step. ODs and Comp ophtho wouldn't fit the criteria or the skill set to pay ratio. A PA doing a shots would make the most financial and medicolegal sense in terms of midlevel providers

I have worked at practices that hire PAs to do injections. They don't last long. Nobody wants to do injections all day long.

 

[RetinaDude]

After fairly recently going through the job search process (and having the fortune of being well connected and having good mentors), I beg to differ. It's not that jobs were being internally filled. It's just that non-PE jobs were few and far between. This was the experience of the entire class, regardless of fellowship prestige etc. Most of us were actively trying to escape PE. If a practice wasn't actively selling, they would be during our associate phase.
I'm lucky that I landed in a group like what yours sounds like. However I did have to make a pretty decent location sacrifice for it. But a non-PE job with a strong patient focus was my main priority.
It's not a conspiracy. It's actually happening. From hearing from people acquisition committees and you would be surprised how many smaller groups with younger docs are actively trying to go to market. Groups that you would never think of.
I'm hoping there are groups like yours and mine in the future for the new grads, but it might just be up to them to start their own. Hopefully we see a new wave of that. Fight the power.
This is the reality of our time. We will be a hot commodity. But we have to make sure our hands aren't tied logistically if we want to take advantage of that

I texted six different groups this AM, with partners in each that i know very well. We stay in touch and discuss practice concerns frequently. These are practices all over the country and each have at least 4 partners. None are selling to PE and none have any intention. Yes, its a small sample size but it's representative of the fact that not everyone in retina is jumping ship to PE. I find PE similar to the job situation years ago whenever I would hear people complaining about the low starting salaries in large metro areas. Those were the only places they were looking so they thought everyone was also offering all grads lowball salaries. It wasn't. It was just that their views were so focused on these small areas that they did not notice the amazing opportunities available by expanding their search. I don't like what PE has done to our world, and I am sorry that it has made job searching more scary, but I hope it means increased opportunity for groups that may have been looked over in the past (who are not considering PE).

I agree about the goodwill comment you made earlier. Thirty years ago, that may have been the "norm" but today its just BS. The buy in should consist of buying the actual goods (slit lamps, equipment, etc...), your A/R, and any real estate you can own. And it should be shared equally without any one partner owning more than the other(s)

 

[TheLesPaul]

This whole PE situation has occurred due to a confluence of factors. One factor rarely discussed is that many of the younger docs today are risk adverse and do not want to buy in to become a partner. It’s understandable with the expensive dollar amounts involved, fear of future Medicare payment cuts, and also with their having large student loan payments. I know a couple of docs who sold to PE primarily as an exit/retirement strategy since their young associates did not want to buy in to their practices. PE swooped in to fill that void. (However, I do not really know if their young associates were offered a fair deal)

Younger docs are risk averse because so many older docs are sleazy, slimy, scumbags who don't think twice about taking advantage of fresh grads. PE seems like the "devil you know" when coming out of academia. Really unfortunate that we have done this to ourselves.

Also, I have seen scenarios like you mentioned play out. A young associate will not pay an 8-10X EBITDA for partnership and PE will. "did not want to buy in" really means "would be foolish to pay that much" for the practice.

 

[jd123]

Younger docs are risk averse because so many older docs are sleazy, slimy, scumbags who don't think twice about taking advantage of fresh grads. PE seems like the "devil you know" when coming out of academia. Really unfortunate that we have done this to ourselves.

Also, I have seen scenarios like you mentioned play out. A young associate will not pay an 8-10X EBITDA for partnership and PE will. "did not want to buy in" really means "would be foolish to pay that much" for the practice.

Agree with LesPaul. In my opinion, young docs are just as entrepreneurial as older docs, but millennials have had the rug pulled out from under them by the boomer doc generation.

 

[dantt]

Also, I have seen scenarios like you mentioned play out. A young associate will not pay an 8-10X EBITDA for partnership and PE will. "did not want to buy in" really means "would be foolish to pay that much" for the prpractice.

I listened to a podcast recently where an ophthalmologist described how their father felt he was doing them a favor charging them 8x to let him buy into the family business. The rationale was so that they could tell future partners they bought in at 8x so everybody else has to also. I'm not going to judge.

 

[docdoc2012]

I texted six different groups this AM, with partners in each that i know very well. We stay in touch and discuss practice concerns frequently. These are practices all over the country and each have at least 4 partners. None are selling to PE and none have any intention. Yes, its a small sample size but it's representative of the fact that not everyone in retina is jumping ship to PE. I find PE similar to the job situation years ago whenever I would hear people complaining about the low starting salaries in large metro areas. Those were the only places they were looking so they thought everyone was also offering all grads lowball salaries. It wasn't. It was just that their views were so focused on these small areas that they did not notice the amazing opportunities available by expanding their search. I don't like what PE has done to our world, and I am sorry that it has made job searching more scary, but I hope it means increased opportunity for groups that may have been looked over in the past (who are not considering PE).

I agree about the goodwill comment you made earlier. Thirty years ago, that may have been the "norm" but today its just BS. The buy in should consist of buying the actual goods (slit lamps, equipment, etc...), your A/R, and any real estate you can own. And it should be shared equally without any one partner owning more than the other(s)

The practice I was with training with was adamantly anti-PE on moral and financial grounds. They were really upset with a trainee for joining a PE group, and then went to market 2 months later. Many group that sold on the last year were very much antiPE until they weren't. Money talks.
I disagree that this concern is in a similar vein to getting lowballed in big cities. PE groups in big cities are still lowballing starting salaries compared to the smaller markets, at least for retina. There may be groups that haven't sold. But how many of them are hiring in any given year? How many can absorb the volume of fellowship grads coming out? And how many of these looked over groups you mentioned have been were looked over for very real reasons? How many are predatory? It's a pretty murky situation.

You shouldn't have to move to the middle of nowhere to have a decent job after working for 12+ years on getting educated. You don't have to live in NYC. But unless you want to you shouldn't have to be forced into the boonies. I very much understand that the best jobs are in off the beaten path locations. But people can't be faulted for not wanting to move there.

 

[Slide]

The practice I was with training with was adamantly anti-PE on moral and financial grounds. They were really upset with a trainee for joining a PE group, and then went to market 2 months later. Many group that sold on the last year were very much antiPE until they weren't. Money talks.
I disagree that this concern is in a similar vein to getting lowballed in big cities. PE groups in big cities are still lowballing starting salaries compared to the smaller markets, at least for retina. There may be groups that haven't sold. But how many of them are hiring in any given year? How many can absorb the volume of fellowship grads coming out? And how many of these looked over groups you mentioned have been were looked over for very real reasons? How many are predatory? It's a pretty murky situation.

You shouldn't have to move to the middle of nowhere to have a decent job after working for 12+ years on getting educated. You don't have to live in NYC. But unless you want to you shouldn't have to be forced into the boonies. I very much understand that the best jobs are in off the beaten path locations. But people can't be faulted for not wanting to move there.

As I heard from a friend in the field, “Everyone has their price.” I will be honest, if I had my own practice and was offered a $30 million buyout from PE for my practice, heck yeah I’d consider it strongly.

 

[LightBox]

Agree with LesPaul. In my opinion, young docs are just as entrepreneurial as older docs, but millennials have had the rug pulled out from under them by the boomer doc generation.

This victim mentality or blaming "boomers" is a loser attitude. Four words: start your own practice. No practice owner needs to offer you anything just because you think you deserve it. Be entrepreneurial like every practice owner before you. Stop watching Netflix after work and learn how to run a practice.

 

[TheLesPaul]

This victim mentality or blaming "boomers" is a loser attitude. Four words: start your own practice. No practice owner needs to offer you anything just because you think you deserve it. Be entrepreneurial like every practice owner before you. Stop watching Netflix after work and learn how to run a practice.

I did! And so have many of us early in career. The context of my comments was that most young physicians would rather trust a university or even corporate setting (lower ceiling, less likely to get screwed) compared to a shady boomer practice owner who promises to make you partner 'really soon, don't worry'. Many ophthalmologists are really unethical business partners.

 

[Slide]

This victim mentality or blaming "boomers" is a loser attitude. Four words: start your own practice. No practice owner needs to offer you anything just because you think you deserve it. Be entrepreneurial like every practice owner before you. Stop watching Netflix after work and learn how to run a practice.

A lot of my colleagues and former residents have started their own practices. If anything I think solo/micro practices are having a resurgence due to the previously stated issues. Our generation is just wary of the much older generation because as TheLesPaul said, anecdotally a lot of the older guys are really unethical and shady (eg, pulling partnership, forcing goodwill, dumping, PE takeover). In fact that's why exactly they've started their own practices. I'm in academia but in one of the satellite clinics I used to work at before COVID hit, the now-retired comp guy wanted us to pay more than fair-market value for his clinic, which needed a renovation and newer equipment. He could not comprehend how paying above FMV was illegal and wanted an under the table payment. I'm sure you can find really bad business partners of all types and ages but most of the ophthalmologists I knew who had the "f you I got mine" attitude was in the much older generation.

 

[Anakinmemer]

@RetinaDude From all the posts I've read you always have a bright outlook on the future of the field and it's really inspiring for me as a student to read. I know things aren't perfect but I still look forward to practicing one day and it's nice to see some docs are still happy in ophthalmology.

 

[docdoc2012]

@RetinaDude From all the posts I've read you always have a bright outlook on the future of the field and it's really inspiring for me as a student to read. I know things aren't perfect but I still look forward to practicing one day and it's nice to see some docs are still happy in ophthalmology.

Most ophthalmologists are happy, make no mistake. What's happening to us is happening to all of medicine. The difference is we still have agency and can have a successful practice independent of hospitals/corporations if we are willing to put in the time and effort.
This however involves going in with open eyes and a realistic view of the landscape you are dealing with. Information is power, and we need to be informed of where greed is trying to drive medicine

 

[Anakinmemer]

Most ophthalmologists are happy, make no mistake. What's happening to us is happening to all of medicine. The difference is we still have agency and can have a successful practice independent of hospitals/corporations if we are willing to put in the time and effort.
This however involves going in with open eyes and a realistic view of the landscape you are dealing with. Information is power, and we need to be informed of where greed is trying to drive medicine

I appreciate the insight. Based on your replies you went through a retina job search recently correct? If you don't mind sharing what are the PE offers like in terms of starting salary and income ceiling? I guess I've been wondering what makes these jobs so enticing to new grads as it seems many are still taking them.

 

[docdoc2012]

I appreciate the insight. Based on your replies you went through a retina job search recently correct? If you don't mind sharing what are the PE offers like in terms of starting salary and income ceiling? I guess I've been wondering what makes these jobs so enticing to new grads as it seems many are still taking them.

Few thoughts on your questions:
1. In the retina world the traditional epitome of a private practice job is a retina only privademic group with big names who are well connected who can potentially get you on the podium, into research trials etc. Most of these groups have now sold to PE but they still have the reputations that retina fellows are taught to pursue. Fellows are traditionally not geared towards thinking about the money aspect/long term financial side of things. The newer grads are just now waking up to how PE is effecting these practices. This is what had made these jobs continue to be enticing, I would say until this year
2. In bigger cities, many groups either have huge overheads or the practices are predatory churn and burn practices - essentially they use associates with an unofficial promise of partnership and that is never delivered upon. In these situations, a very transparent corporate contract can be almost a relief, even if the contract isn't really in your favor
3. the only PEs not having trouble recruiting at the moment are those with the privademic reputation or those in big cities. Many grads simply don't want to leave their city enclaves where they trained. The thought of moving to a smaller place to look for jobs is simply unappetizing.i believe it's a shortsighted decision, unless you have a financial cushion - in which case more power to you.
In bigger cities PE starts were around 250k with an unofficial bonus guarantee.in midsized cities PE starts were around 300-350k. I didn't look any smaller than that.

 

[i-doctor]

I wonder what the percentage is these days of docs who are still with their original employer who’ve now been in practice, say, 5 years. Maybe 50%? More?

 

[Anakinmemer]

Few thoughts on your questions:
1. In the retina world the traditional epitome of a private practice job is a retina only privademic group with big names who are well connected who can potentially get you on the podium, into research trials etc. Most of these groups have now sold to PE but they still have the reputations that retina fellows are taught to pursue. Fellows are traditionally not geared towards thinking about the money aspect/long term financial side of things. The newer grads are just now waking up to how PE is effecting these practices. This is what had made these jobs continue to be enticing, I would say until this year
2. In bigger cities, many groups either have huge overheads or the practices are predatory churn and burn practices - essentially they use associates with an unofficial promise of partnership and that is never delivered upon. In these situations, a very transparent corporate contract can be almost a relief, even if the contract isn't really in your favor
3. the only PEs not having trouble recruiting at the moment are those with the privademic reputation or those in big cities. Many grads simply don't want to leave their city enclaves where they trained. The thought of moving to a smaller place to look for jobs is simply unappetizing.i believe it's a shortsighted decision, unless you have a financial cushion - in which case more power to you.
In bigger cities PE starts were around 250k with an unofficial bonus guarantee.in midsized cities PE starts were around 300-350k. I didn't look any smaller than that.

I appreciate the reply. For 6 years of training I truly can't think of a worse monetary decision than signing with PE for 250k. At that point I'd take a chance with a predatory practice because I can't imagine their associates are making much less...

 

[dantt]

I wonder what the percentage is these days of docs who are still with their original employer who’ve now been in practice, say, 5 years. Maybe 50%? More?

Less. Far less.

 

[eyeeye_captain]

$250k for a PE job in a (likely) high COL location? Don’t bother getting up, I’ll see myself to the door. Thought PE groups were pricing private groups out, sounds like they’re pretty close to in line with them while having a lower ceiling. Luckily non-competes are getting harder to enforce since PE can have a big geographic footprint.

Looking at folks I know from residency and fellowship, 5 year retention for that cohort is over 50%. I’d guess that’s a little high, probably closer to 35% for everyone.

I know plenty of lifers, and I know some docs who were on job #3 before they were 3 years out. That’s across private, PE, academic, VA, the works. I see more turnover in the PE spots in my region, but I know at least one private group here that has a new associate every single year.

 

[RetinaDude]

Every person I trained with has remained in their first job out of training. Looking at the years before and after my residency class, I only know of two people who changed jobs.......one was kind of a psychopath and the other would've remained at the first practice but he moved back home for family reasons.

And yes $250k for a PE job would not be very palatable. For PP, yes that's reasonable because you know the ceiling is limitless (to a degree). With PE, you are only going to be allowed to make so much money. The remainder of the money has to go to your PE overlords.

 

[owleye]

Few thoughts on your questions:
1. In the retina world the traditional epitome of a private practice job is a retina only privademic group with big names who are well connected who can potentially get you on the podium, into research trials etc. Most of these groups have now sold to PE but they still have the reputations that retina fellows are taught to pursue. Fellows are traditionally not geared towards thinking about the money aspect/long term financial side of things. The newer grads are just now waking up to how PE is effecting these practices. This is what had made these jobs continue to be enticing, I would say until this year
2. In bigger cities, many groups either have huge overheads or the practices are predatory churn and burn practices - essentially they use associates with an unofficial promise of partnership and that is never delivered upon. In these situations, a very transparent corporate contract can be almost a relief, even if the contract isn't really in your favor
3. the only PEs not having trouble recruiting at the moment are those with the privademic reputation or those in big cities. Many grads simply don't want to leave their city enclaves where they trained. The thought of moving to a smaller place to look for jobs is simply unappetizing.i believe it's a shortsighted decision, unless you have a financial cushion - in which case more power to you.
In bigger cities PE starts were around 250k with an unofficial bonus guarantee.in midsized cities PE starts were around 300-350k. I didn't look any smaller than that.

Super ominous…seems their goal is to turn retina into pediatrics.

 

[PLA2]

not sure where the 250k number is coming from but i've seen PE offer starting with production bonus telling candidates they can except 400k first year in an ultra high COL area in cali. 400k is pretty low... I thought the whole point of PE was to start at a higher salary?

 

[docdoc2012]

not sure where the 250k number is coming from but i've seen PE offer starting with production bonus telling candidates they can except 400k first year in an ultra high COL area in cali. 400k is pretty low... I thought the whole point of PE was to start at a higher salary?

The numbers are coming from contracts offered to myself and fellows my same year in various cities. 250k salary with a bonus guarantee that can take you up to 350k to 400k first year. PEs that bought the bigger retina groups in bigger cities have kept the starting salaries as is, which have traditionally been lower in bigger cities. What they're basically offering is access to 32 to 35 percent of collections after your 'partnership' period without having to buyin. The assumption is that people will still join because of location