Private Equity Group vs Small PP

[PillmillPhil]

Pain fellow here looking to join PP....

Option 1. I have opportunity to join a private equity group with 15 docs/14 locations spanning 180 miles of the state. The CMO being a KOL (highly connected with industry and pushing advanced procedures). Promise of partnership, high salary, Opening a new location. Claims he is very serious about preventing "cannibalization" between docs.

Option 2. Join a small PP with 2 other docs as an independent contractor (no partnership opportunity) where they pay my overhead. Decent base and bonus structure. Not as interested in the advanced procedures but would allow me to pursue this once my patient base is built. Would need to independently buy in ASC years down the road. Also plan to open a new location in my second year.

Anyone have experience with a monster group like option 1? Do these places really turnover new grads like a factory?

My thoughts- What is being offered is too good to be true and will likely be soul crushing in the end. I am naturally leaning towards option 2 as I am concerned about getting screwed despite the potential for a great learning experience and financial opportunity.

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[swamprat]

I would'nt choose either of them

 

[PillmillPhil]

I would'nt choose either of them

Don't have the means (medical school debt) or time (I have a wife and young children) to open my own PP and really don't have an interest to stay in academics

 

[swamprat]

Don't have the means (medical school debt) or time (I have a wife and young children) to open my own PP and really don't have an interest to stay in academics

Well the PE sounds terrible, - the other one at least you can eventually branch out on ur own if ur so inclined. That PE will crush you.

 

[Ferrismonk]

I once worked for a private-equity based group which was smallish, but then expanded to huge. Was fair deal on paper. The problem with these groups, even when they are fair to the docs, is that you have zero control over business decisions. With a smaller group they'll often at least listen to you. Think of the PE group similar to hospital employed except that your overlords actually are trying to squeeze every last dollar out of you instead of relative neglect as long as you're profitable.

Difficult to say in your position. If these are your only two options, I would likely choose the PE group for the higher base salary with an eye to move on in about 2-3 years.

 

[drusso]

I would'nt choose either of them

What's wrong with each option?

 

[drusso]

Pain fellow here looking to join PP....

Option 1. I have opportunity to join a private equity group with 15 docs/14 locations spanning 180 miles of the state. The CMO being a KOL (highly connected with industry and pushing advanced procedures). Promise of partnership, high salary, Opening a new location. Claims he is very serious about preventing "cannibalization" between docs.

Option 2. Join a small PP with 2 other docs as an independent contractor (no partnership opportunity) where they pay my overhead. Decent base and bonus structure. Not as interested in the advanced procedures but would allow me to pursue this once my patient base is built. Would need to independently buy in ASC years down the road. Also plan to open a new location in my second year.

Anyone have experience with a monster group like option 1? Do these places really turnover new grads like a factory?

My thoughts- What is being offered is too good to be true and will likely be soul crushing in the end. I am naturally leaning towards option 2 as I am concerned about getting screwed despite the potential for a great learning experience and financial opportunity.

It sounds like option 1 is the future and option 2 is the past.

 

[Status Sciaticus]

Is there an option to be employed by a hospital on a base + production?

 

[PillmillPhil]

Is there an option to be employed by a hospital on a base + production?

I have not heard of this at least not in the region where I am wanting to go.

 

[PillmillPhil]

It sounds like option 1 is the future and option 2 is the past.

I agree with that...the question is whether all the excitement surrounding the advanced procedures/ implants is going to fizzle out or become widely accepted by payors and patients alike. The option 2 owner told me that most of the implanting takes too much time was not financially viable when they previously managed an ASC granted they werent doing the same procedures that are out today.

 

[drusso]

Is there an option to be employed by a hospital on a base + production?

Only if someone is juicing the vig on SOS and cranking out facility fees for their employer. Otherwise, you could be busy all day in a hospital and go broke on pro fees. Hospital billing departments suck and you can't control your payer mix.

 

[gazzer]

Pain fellow here looking to join PP....

Option 1. I have opportunity to join a private equity group with 15 docs/14 locations spanning 180 miles of the state. The CMO being a KOL (highly connected with industry and pushing advanced procedures). Promise of partnership, high salary, Opening a new location. Claims he is very serious about preventing "cannibalization" between docs.

Option 2. Join a small PP with 2 other docs as an independent contractor (no partnership opportunity) where they pay my overhead. Decent base and bonus structure. Not as interested in the advanced procedures but would allow me to pursue this once my patient base is built. Would need to independently buy in ASC years down the road. Also plan to open a new location in my second year.

Anyone have experience with a monster group like option 1? Do these places really turnover new grads like a factory?

My thoughts- What is being offered is too good to be true and will likely be soul crushing in the end. I am naturally leaning towards option 2 as I am concerned about getting screwed despite the potential for a great learning experience and financial opportunity.

How does "partnership" work in option 1? Key to make the best of this situation would be to make sure you take over an existing patient base. That many docs and locations means highly saturated market. The mention of "cannibalization" means offices are within 10 miles of each other. Good luck. You will burn out fast. But, as someone mentioned above you could make it work for 2-3 years, but then you will have to deal with non competes on your way out.

 

[RoloTomassi]

Usually the only time PE is a good deal is if you had an existing PP and sold shares to PE. You give up some or all control for a retirement check. You do this knowing the remainder of your time there will suck but the check is worth it.

On the other hand, joining an established PE owned chain means you'll just be a hamster on a wheel. Those ASC shares are just to keep you running faster, but eventually you'll burn out.

 

[swamprat]

It sounds like option 1 is the future and option 2 is the past.

It shouldnt be. PE is destroying medicine. I dont have a solution the older guys are selling out for their retirement. Outside of the usual BS corporatization brings to the practice of medicine I don't want to be doing modules every quarter and threatened to withhold my pay or worse if I dont finish by due date. Its idiotic. And if they don't do it yet they certainly will. I have experienced PE on the EM side of things - that field is burning to the ground.

 

[ateria radicularis magna]

Did you get any red flags from either option? Things you felt seemed a bit off? A lot of times a gut feeling may prompt some important questions.

 

[PillmillPhil]

Did you get any red flags from either option? Things you felt seemed a bit off? A lot of times a gut feeling may prompt some important questions.

Option 1: have not met in person yet, but offered to fly me out. Median salary quoted seemed high for employed doc (the carrot on a stick?). heavy ties with industry and PE model make me uneasy. I’ve heard new grads get abused in these systems.

Option 2: Had a good gut feeling after meeting them. Very transparent with how I am paid, bonus structure, non-compete appeared fair. Not ideal that advanced procedures are not a priority (No ASC)

 

[swamprat]

Option 1: have not met in person yet, but offered to fly me out. Median salary quoted seemed high for employed doc (the carrot on a stick?). heavy ties with industry and PE model make me uneasy. I’ve heard new grads get abused in these systems.

Option 2: Had a good gut feeling after meeting them. Very transparent with how I am paid, bonus structure, non-compete appeared fair. Not ideal that advanced procedures are not a priority (No ASC)

You can do advanced procedures- you don't need someone from PE to hold your hand. I am sure that private practice will allow you to join a local ASC to do surgical cases. Trust me I learned all the advanced stuff on my own with courses and then doing them. With that being said you don't need to be doing advanced procedures your first year out - huge learned curve to get the bread and butter down trust me its as difficult as fellowship to really hone your skills and confidence down - confirming your in the right spot with no one looking over your shoulder. I did a lot of reading and self reflection first year - learned the anatomy in greater detail, the fluoro anatomy - where my needle was, change my techniques etc. You will have plenty of time for bigger procedures. Option 2 sounds much better IMO when you put it like this.

 

[callmeanesthesia]

I’m in private practice. During fellowship I thought advanced procedures were going to be a huge portion of my practice. I did a lot in fellowship - SCS, pumps, MILD, Vertiflex, kypho, and vertebral body RFA for tumors. I thought for sure I would be doing all of them right out of the gate. Turns out, where I am we have surgeons who don’t seem to have a problem doing a laminectomy for older, sicker patients, so I saw very few patients who were appropriate candidates for MILD and Vertiflex. I do SCS and kypho because they fill important niches. Pumps, it turns out, suck if you’re not in a place connected to a cancer center for referrals. I thankfully never did start doing those, and have been able to punt patients from other offices looking for me to take over with “sorry, I’m not set up for that.”
95% + of my practice is bread and butter in office procedures, including RFA.

 

[gazzer]

Pain fellow here looking to join PP....

Option 1. I have opportunity to join a private equity group with 15 docs/14 locations spanning 180 miles of the state. The CMO being a KOL (highly connected with industry and pushing advanced procedures). Promise of partnership, high salary, Opening a new location. Claims he is very serious about preventing "cannibalization" between docs.

Option 2. Join a small PP with 2 other docs as an independent contractor (no partnership opportunity) where they pay my overhead. Decent base and bonus structure. Not as interested in the advanced procedures but would allow me to pursue this once my patient base is built. Would need to independently buy in ASC years down the road. Also plan to open a new location in my second year.

Anyone have experience with a monster group like option 1? Do these places really turnover new grads like a factory?

My thoughts- What is being offered is too good to be true and will likely be soul crushing in the end. I am naturally leaning towards option 2 as I am concerned about getting screwed despite the potential for a great learning experience and financial opportunity

Pain fellow here looking to join PP....

Option 1. I have opportunity to join a private equity group with 15 docs/14 locations spanning 180 miles of the state. The CMO being a KOL (highly connected with industry and pushing advanced procedures). Promise of partnership, high salary, Opening a new location. Claims he is very serious about preventing "cannibalization" between docs.

Option 2. Join a small PP with 2 other docs as an independent contractor (no partnership opportunity) where they pay my overhead. Decent base and bonus structure. Not as interested in the advanced procedures but would allow me to pursue this once my patient base is built. Would need to independently buy in ASC years down the road. Also plan to open a new location in my second year.

Anyone have experience with a monster group like option 1? Do these places really turnover new grads like a factory?

My thoughts- What is being offered is too good to be true and will likely be soul crushing in the end. I am naturally leaning towards option 2 as I am concerned about getting screwed despite the potential for a great learning experience and financial opportunity.

Option 2 sounds like they want you to grow their practice for them with no infrastructure in place. What is preventing them from creating a true partnership track if the expectation is to build a base comparable to the partners.

 

[PillmillPhil]

Option 2 sounds like they want you to grow their practice for them with no infrastructure in place. What is preventing them from creating a true partnership track if the expectation is to build a base comparable to the partners.

Not sure why no partnership track but will ask. The other doc with them is independent contractor as well. Seems to be happy with the arrangement.

 

[ateria radicularis magna]

Option 1: have not met in person yet, but offered to fly me out. Median salary quoted seemed high for employed doc (the carrot on a stick?). heavy ties with industry and PE model make me uneasy. I’ve heard new grads get abused in these systems.

Option 2: Had a good gut feeling after meeting them. Very transparent with how I am paid, bonus structure, non-compete appeared fair. Not ideal that advanced procedures are not a priority (No ASC)

Hmm option 1 sounds like there must be a catch…what else did they sell you on? Did you speak directly to the kol ? Do you like the geographic area? Does your significant other?
Did they mention impending sale, audits, leadership issues, high turnover of doctors, opioid issues, ancillaries, payor mix, marketing expectations, expectations as far as supervision of pas etc? What is the partnership composed of? If pe I imagine asc shares or some kind of fractional company shares or something.

 

[PillmillPhil]

Hmm option 1 sounds like there must be a catch…what else did they sell you on? Did you speak directly to the kol ? Do you like the geographic area? Does your significant other?
Did they mention impending sale, audits, leadership issues, high turnover of doctors, opioid issues, ancillaries, payor mix, marketing expectations, expectations as far as supervision of pas etc? What is the partnership composed of? If pe I imagine asc shares or some kind of fractional company shares or something.

I spoke to the kol directly. The two options are within the same city limits which we are pretty set on. Since this was our initial convo I didn’t ask all the questions and let him pitch to me. From what I gathered their model is as “opioid sparing”, definitely supervision of mid levels (to what extent I don’t know but likely a great deal), I believe the partnership is via ASC shares.

 

[au bon pain]

I spoke to the kol directly. The two options are within the same city limits which we are pretty set on. Since this was our initial convo I didn’t ask all the questions and let him pitch to me. From what I gathered their model is as “opioid sparing”, definitely supervision of mid levels (to what extent I don’t know but likely a great deal), I believe the partnership is via ASC shares.

Sounds like having no hiring/firing power or meaningful control over midlevels who will be prescribing the meds that you're ultimately responsible for as you "supervise" them. And they'll use the allure of ASC shares as a carrot to keep you churning, which ironically will make your *potential* future ASC shares all the more expensive for you to purchase. Maybe I'm wrong and perhaps this is an amazing gig, but some things to consider

 

[Agast]

Just a side note, the world of Pain is not that big and when you're dealing with super groups it's even smaller. Based on the information you've given it would not be that hard for them to identify you and themselves if any of them happen to browse the forum. I can tell you from experience it makes you not want to hire that person any more.

 

[DrSpine]

Option 1 is brutal. PE is the worst of the worst. But if its high pay, go there for 1-2 years, get your skills and experience set, then bail. Make sure there's no claw back or brutal Non-Compete if you're planning to stay in the area.

 

[PillmillPhil]

Just a side note, the world of Pain is not that big and when you're dealing with super groups it's even smaller. Based on the information you've given it would not be that hard for them to identify you and themselves if any of them happen to browse the forum. I can tell you from experience it makes you not want to hire that person any more.

I find it more valuable the opinion of others who may have “been there, done that” to avoid 2 years or potential misery. If I get “found out” IMO it’s 100% worth it if the consensus is stay away from that place...

 

[gazzer]

I find it more valuable the opinion of others who may have “been there, done that” to avoid 2 years or potential misery. If I get “found out” IMO it’s 100% worth it if the consensus is stay away from that place...

Talk to 3 docs that have left (or let go for not pumping asc with “advanced procedures”) in the last 6-8 months and I’m sure it will be that many docs. Talk to 3 new hires 2-3 months in. You will get a full assessment.

 

[PillmillPhil]

Talk to 3 docs that have left (or let go for not pumping asc with “advanced procedures”) in the last 6-8 months and I’m sure it will be that many docs. Talk to 3 new hires 2-3 months in. You will get a full assessment.

That’s exactly what I was looking for on this forum, but so far few have spoken from personal experience. If anyone wants to DM me to avoid exposure please do!

 

[callmeanesthesia]

That’s exactly what I was looking for on this forum, but so far few have spoken from personal experience. If anyone wants to DM me to avoid exposure please do!

You may be able to look on LinkedIn for people who list their old jobs or never updated their profile, or if the company maintains a Facebook or news feed, look back a few years for posts announcing new doctors, who are no longer with them, then track them down. Cold call the doctors’ new offices and ask their staff to pass them a message to call you.

 

[ateria radicularis magna]

Do all PE shops have the same play book?

 

[au bon pain]

Do all PE shops have the same play book?

EBITDA >>>>> everything else

 

[ateria radicularis magna]

Interested in hearing more details of your experiences deciding between these 2 options, if you care to share.

 

[PillmillPhil]

Interested in hearing more details of your experiences deciding between these 2 options, if you care to share.

Choosing option 2. Ultimately, going with my gut..Plan on doing implants / joining ASC after I am well established in the area

 

[drusso]

Choosing option 2. Ultimately, going with my gut..Plan on doing implants / joining ASC after I am well established in the area

Make yourself indispensable and they will BEG you to be in business with them.

 

[PillmillPhil]

Make yourself indispensable and they will BEG you to be in business with them.

besides being a good doc, how would you recommend practically accomplishing this?

 

[DODOCSS]

besides being a good doc, how would you recommend practically accomplishing this?

if your patients like you, little else matters

 

[RoloTomassi]

Ability to generate revenue and referrals actually matters more I would argue.

If you are going to be independent contractor, make sure patients come to see YOU not the practice, referral physicians have your cell, send everything though YOU, you have your own website.

You will be valuable to them for what you bring in, but if they know you'd be stiff competition if you left, that's valuable as well.