Leaving active practice as a partner in a group

[powermd]

Suppose you spend 10-15 years practicing anesthesia with a group as a partner, but eventually decide you wish to leave active practice and pursue other business interests. What are your options and responsibilities to your group? Would the remaining members have to buy out your shares in the partnership? Surely your equity in the partnership could be worth a lot. Could you hire a new anesthesiologist on salary to fill your clinical responsibilities while you keep the profits from his work?

I'm sure options are as variable as are group partnership contracts, but what would be expected typically in such a circumstance?

Ether, Mil - Suppose you suddenly decided you'd rather play golf all day instead of supervise CRNAs, what would your options be?

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[EtherMD]

Suppose you spend 10-15 years practicing anesthesia with a group as a partner, but eventually decide you wish to leave active practice and pursue other business interests. What are your options and responsibilities to your group? Would the remaining members have to buy out your shares in the partnership? Surely your equity in the partnership could be worth a lot. Could you hire a new anesthesiologist on salary to fill your clinical responsibilities while you keep the profits from his work?

I'm sure options are as variable as are group partnership contracts, but what would be expected typically in such a circumstance?

Ether, Mil - Suppose you suddenly decided you'd rather play golf all day instead of supervise CRNAs, what would your options be?

Happy day! The day any practicing Anesthesiologist can afford to semi-retire and enjoy life is the day we are all looking forward to. This means less call/no call, day work and preferential cases with a day or two off during the week. You can forget about Holidays and Weekends as well; or, you could get a job as an "attending" and let everyone else do all the work while you teach and supervise. Nice.

Every Group has its own set of rules. Some give you "stock" in the company worth a few hundred or several thousand dollars. Bigger Groups offer you "stock" in the billing company as well. Most have "accounts receivable" that will pay you some money for a period of time 6-12 months after you retire. The important thing is to ask your new Group how the rules work for retiring members.

In the end, a partner retiring is a beneficial thing for everyone. What you want to avoid is a Group that allows "senior" partners to remain fully vested in the company and "avoid" hospital call. Some Groups give "perks" to the senior member or founder of the Group allowing him to draw full salary but avoid "call" and late afternoon/evening work. A big Group can live with one "king" but more than one will destroy the Group morale. Regardless of income, the work and the money must be shared equally. However, Groups tolerate less work from certain members because of contractual issues (a certain MD holds a lucrative contract) or commitee meetings (B.S. if you ask me). Again, you must find out which members and how many members of any Group are receiving special treatment. Ultimately, you must decide if you can "live with the arrangement" or want to look elsewhere. The market place is such that you should NOT put up with too much Sh#@ these days.

The Group that offers you a 6 year partnership track should be avoided like the Avian Flu. Most of the MD's in these Groups had a TWO year partnership track but want you to be their Bit@# for 6 years. At the end of the track you might find all of health care has changed while you were busy making those greedy bastards rich.

A retiring partner should NOT be allowed to take advantage of existing or new members. Everything should be spelled out clearly and be fair for all parties. This means hiring a foreign Physician that can barely speak English to work for 50% partner pay while you get the other 50% is VERBOTEN.

 

[Planktonmd]

Happy day! The day any practicing Anesthesiologist can afford to semi-retire and enjoy life is the day we are all looking forward to. This means less call/no call, day work and preferential cases with a day or two off during the week. You can forget about Holidays and Weekends as well; or, you could get a job as an "attending" and let everyone else do all the work while you teach and supervise. Nice.

Every Group has its own set of rules. Some give you "stock" in the company worth a few hundred or several thousand dollars. Bigger Groups offer you "stock" in the billing company as well. Most have "accounts receivable" that will pay you some money for a period of time 6-12 months after you retire. The important thing is to ask your new Group how the rules work for retiring members.

In the end, a partner retiring is a beneficial thing for everyone. What you want to avoid is a Group that allows "senior" partners to remain fully vested in the company and "avoid" hospital call. Some Groups give "perks" to the senior member or founder of the Group allowing him to draw full salary but avoid "call" and late afternoon/evening work. A big Group can live with one "king" but more than one will destroy the Group morale. Regardless of income, the work and the money must be shared equally. However, Groups tolerate less work from certain members because of contractual issues (a certain MD holds a lucrative contract) or commitee meetings (B.S. if you ask me). Again, you must find out which members and how many members of any Group are receiving special treatment. Ultimately, you must decide if you can "live with the arrangement" or want to look elsewhere. The market place is such that you should NOT put up with too much Sh#@ these days.

The Group that offers you a 6 year partnership track should be avoided like the Avian Flu. Most of the MD's in these Groups had a TWO year partnership track but want you to be their Bit@# for 6 years. At the end of the track you might find all of health care has changed while you were busy making those greedy bastards rich.

A retiring partner should NOT be allowed to take advantage of existing or new members. Everything should be spelled out clearly and be fair for all parties. This means hiring a foreign Physician that can barely speak English to work for 50% partner pay while you get the other 50% is VERBOTEN.

Lots of wisdom and reality in this post.

 

[militarymd]

Like Ether says, every group is different. The shares in my group are worth exactly 100 dollars.

The share buys you voting rights in group decisions....that's it....

Everything else is shared equally with everyone: revenue, call, vacation, cases......so a partner leaving only means that the group needs to find a body to fill in the spot.

 

[powermd]

Like Ether says, every group is different. The shares in my group are worth exactly 100 dollars.

The share buys you voting rights in group decisions....that's it....

Everything else is shared equally with everyone: revenue, call, vacation, cases......so a partner leaving only means that the group needs to find a body to fill in the spot.

Your arrangement sounds very reasonable and fair to all partners. I also like that you let new employees know very early on if partnership is forthcoming, and that your partnership track is short- one year, right?. How common is your model of practice, Mil? I'm fully expecting to meet a sea of sharks when I go job hunting a year from now.

 

[militarymd]

Your arrangement sounds very reasonable and fair to all partners. I also like that you let new employees know very early on if partnership is forthcoming, and that your partnership track is short- one year, right?. How common is your model of practice, Mil? I'm fully expecting to meet a sea of sharks when I go job hunting a year from now.

The last 3 partners were made partners within 30 days.

We have 1 who has been non-partner for almost 4 years now....he's not board-certified.

Yes...there'll be sharks out there.....and the way I see.......if they want to screw you....they will....one way or another....

-Have the lawyer check your contract to minimize the possible screwing
-check out your employer.
-bottom line......it's your assessment of the man/woman who you will be calling your partner....

 

[Noyac]

Many groups would like to have partners retire. THey can always fill the spots with associates that make less for some period of time and in the meantime the remaining partners split the pot among fewer members. I'm sure this is very obvious to most here. Partners retiring is what a group wants in most cases when it comes to finances.

 

[johankriek]

I'm fully expecting to meet a sea of sharks when I go job hunting a year from now.

oh you will meet plenty of sharks.. just honestly tell yourself what you want put it on a piece of paper, and before you take the job include it in the contract and if they dont agree.. take a walk. simple as that. You wont be a resident anymore you dont owe anything to anybody. Just make sure you get paid for everything you do. In other words negotiate salary just without calls.. then each call you take negotiate the extra pay for that. then each time you work a weekend negotiate the extra pay for that.. make a short leave notice.. ( 4-5 weeks notice for you to leave). Very difficult for them to take advantage of you if you have the extra pay for calls and weekends spelled out. so if they want you to take all the weekends. they just will be making you richer. remember you dont have to accept anything you dont like..

 

[Noyac]

oh you will meet plenty of sharks.. just honestly tell yourself what you want put it on a piece of paper, and before you take the job include it in the contract and if they dont agree.. take a walk. simple as that. You wont be a resident anymore you dont owe anything to anybody. Just make sure you get paid for everything you do. In other words negotiate salary just without calls.. then each call you take negotiate the extra pay for that. then each time you work a weekend negotiate the extra pay for that.. make a short leave notice.. ( 4-5 weeks notice for you to leave). Very difficult for them to take advantage of you if you have the extra pay for calls and weekends spelled out. so if they want you to take all the weekends. they just will be making you richer. remember you dont have to accept anything you dont like..

This is all very true however, many groups have contracts that others have signed and may even be hiring more than one new member. In this case they view your requests as unfair to the others and will not agree to your needs. That is fine you will just have to decide how much you want to work at that place.

 

[dhb]

Like Ether says, every group is different. The shares in my group are worth exactly 100 dollars.

What are the shares price based on earnings? if you're keeping your shares worth 100 do you issue more if the revenue of the group goes up and vice-versa?

 

[EtherMD]

What are the shares price based on earnings? if you're keeping your shares worth 100 do you issue more if the revenue of the group goes up and vice-versa?

Token shares issued to "legally" make you a partner in the Group/corporation. As such these token shares are given a value (nominal) for legal puposes. Every partner holds the same amount of shares at the same assigned value. When you leave or retire then the shares are redeemed and you have dinner with the money at OutBack or Wendy's.

 

[Dr. Wexler]

Everything else is shared equally with everyone: revenue, call, vacation, cases

MilMD,

So does that mean the practice effectively spreads the gains and losses over the entire group? Isn't this a disincentive to work hard (however you want to measure 'work')? Seems to me that is why other practices favor productions bonuses or RVU-based compensation systems.

 

[militarymd]

MilMD,

So does that mean the practice effectively spreads the gains and losses over the entire group? Isn't this a disincentive to work hard (however you want to measure 'work')? Seems to me that is why other practices favor productions bonuses or RVU-based compensation systems.

We have a pretty good "team" of partners....we all have the same goal...get the work done....

I suppose if you have a slacker in the group, then that person takes advantage of everyone else.....

Our OA is written is such a way that no one is immune from being fired....including partners, so we all work hard ....together.

There's no fighting over who gets the Blue Cross cases and who gets the Medicare cases.

 

[johankriek]

This is all very true however, many groups have contracts that others have signed and may even be hiring more than one new member. In this case they view your requests as unfair to the others and will not agree to your needs. That is fine you will just have to decide how much you want to work at that place.

If they dont like your stipulations, ( which are fair), they are interested in taking advantage of you because the stipulations that i mentioned are not off the wall. YOu SHOULD get paid for everything you do. Dont you think?

 

[EtherMD]

If they dont like your stipulations, ( which are fair), they are interested in taking advantage of you because the stipulations that i mentioned are not off the wall. YOu SHOULD get paid for everything you do. Dont you think?

Johan,

I understand your concern about getting screwed in a Group. But, when we hire someone he gets the same schedule as me. This means the same number of calls, weekends, back-up calls, etc. The only thing he gets different is the pay for 24 months. This is disclosed up-front and NOTHING should be a suprise. There are decent MD's out there that want to be fair.
Unfortunately, you believe all private practice guys are scum and have an agenda. Well, my agenda is simple: tell the truth and bend over backwards to help the new guy succeed. I tell the new guy my partnership income and expected partnership income in 24 months (same as his). The work load, hours, cases, etc., will be divided equally among all members of the Group.
I would state this in the contract but would not agree to your proposal.

Thus, you are working solo and making less than average private practice income. Our FIRST year associate earns more than you and his work is the same as mine (plus or minus 5%). I included the 5% differential because NOONE can be 100% the same but 95% is close enough in a Group.
Wise-Up and look for a good Group of fair Anesthesiologists to join.