Private practice partnership track structure

[Pathofourlives]

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I'm just curious, for those of you in private practice, what is the structure of your partnership track?

For my group, 3 year sweat equity (~50% of partner income) + $175k buy in.

The associate total compensation includes health insurance, $10k CME and $6k health reimbursement account.

 

[Dave CX]

What are you buying in to? They own a lab? My old practice didn't own anything so the buy in was nominal. Otherwise 2yrs full partnership.

 

[Med Director New England]

I'm just curious, for those of you in private practice, what is the structure of your partnership track?

For my group, 3 year sweat equity (~50% of partner income) + $175k buy in.

The associate total compensation includes health insurance, $10k CME and $6k health reimbursement account.

There are so few true pathologist owned practices around anymore not sure how much good info you’ll get here. Also Dave has a good point - what are you buying into ? (real estate, owned building(s), etc)

A few hospital contracts doesn’t really equate to value that you should be buying into imo. Things can change quickly esp in hospitals that are 100-200 beds in size.

1/2 partner take for several years + 175 buy in…hard to say if that is a good deal depending on what you get at the end of it (partner salary + whatever the value of the asset you are buying into).

 

[SunBakedTrash]

I’m very jaded. I almost always trust the soulless ghouls in hospital administration over pathology practice owners. I would guess i’m far from alone in this sentiment. A lot less BS and drama with hospital employment. In the post-apocalyptic age of managed decline, i’ll take my bindle on the road before I stay to fight with dogs over my ever-shrinking trash heap.

 

[Alteran]

I’m very jaded. I almost always trust the soulless ghouls in hospital administration over pathology practice owners. I would guess i’m far from alone in this sentiment. A lot less BS and drama with hospital employment. In the post-apocalyptic age of managed decline, i’ll take my bindle on the road before I stay to fight with dogs over my ever-shrinking trash heap.

Everyone likes to harp on private practice payment and promotion structures, but I can tell you that you will find no better in hospital employment. I've been told of local hospital employed physicians, whose contracts with the hospital group have built in incentive and productivity bonuses, been denied their bonuses either in part or in whole because they were too productive. The hospital system freaked out that there are actually physicians who want to work hard and make some money. So the 5-figure bonuses they would have paid out were more than they budgeted and thus decided to either not pay it or pay a portion of what was contractually obligated. No word on what these physicians are going to do about it but think about your options if you were them: 1) take it to court and spend money out of pocket probably in the amount of the withheld bonus such that when you do get it its probably a wash on your pocketbook, 2) after you fight it and win (or lose), you now have a target on your back and will probably be fired for the first thing you do wrong that they can legally get away with, 3) leave without your money.

And this happened to non-pathologists, so don't think that our private practice or hospital based employment structures as pathologists are the only ones to be undesirable. The worst our field does is promise something (like partnership) that you never had, were never going to have, and have never benefitted from.

 

[KeratinPearls]

Everyone likes to harp on private practice payment and promotion structures, but I can tell you that you will find no better in hospital employment. I've been told of local hospital employed physicians, whose contracts with the hospital group have built in incentive and productivity bonuses, been denied their bonuses either in part or in whole because they were too productive. The hospital system freaked out that there are actually physicians who want to work hard and make some money. So the 5-figure bonuses they would have paid out were more than they budgeted and thus decided to either not pay it or pay a portion of what was contractually obligated. No word on what these physicians are going to do about it but think about your options if you were them: 1) take it to court and spend money out of pocket probably in the amount of the withheld bonus such that when you do get it its probably a wash on your pocketbook, 2) after you fight it and win (or lose), you now have a target on your back and will probably be fired for the first thing you do wrong that they can legally get away with, 3) leave without your money.

And this happened to non-pathologists, so don't think that our private practice or hospital based employment structures as pathologists are the only ones to be undesirable. The worst our field does is promise something (like partnership) that you never had, were never going to have, and have never benefitted from.

You can always leave but it’s not as easy if you are situated of course. Depending where you work, like rural, hospitals will do what they can to keep you happy as it’s hard to fill these spots in undesirable locations with a good candidate at least. The worst thing is for a hospital to bring in a crappy pathologist or someone with personality issues. Also having to spend money to hire a new pathologist will be costly to the hospital from what I’ve heard.

Groups are having trouble finding pathologists now from what I’ve heard even in larger more desirable cities. Now imagine if you are in a rural location you may have some leverage as hospitals don’t want to lose you especially if you are a proven commodity. It also helps if your hospital is financially strong and growing (hiring more docs and increasing surgpath volumes). A loss of a pathologist, especially with high surgpath volume can lead to the other paths working 7 days a week and that cannot be sustainable in the long run.

If bonuses are withheld from one doc, that doc is probably not the only one. That can lead to a lot of pissed off docs and if they leave can lead to a collapse of hospital services.

 

[mike-sheree]

This is how it now is folks. Twenty+ years ago, on this board, I said the current employment model was the wave of the future. Welcome to the wave. The smart thing now is to double dip. Get a military( or similar career) put in 20 years, rinse, repeat, annd make money elsewhere.

 

[octopusprime]

I think buy-ins for tangible assets is a risky proposition in pathology as the landscape has been and still is changing regularly, particularly with respect to lab ownership. It's might be feasible if one has a multitude of accounts or the group can manage losing or gaining smaller accounts regularly, but I'd be cautious if all the eggs are in one basket (ie. 1 big hospital contract is the majority of business), or if there's some big derm or GI accounts that could easily (and likely will given the trend) sell out to private equity in the future (happens all the time with the current PE landscape).
Some groups make it work, or they themselves are the ones that swoop in and undercut the local guys and snag arrangements with big GI and derm groups, but equity in pathology is a risky proposition given the ability of big players (large corporate labs and health systems) to undercut via economy of scale. Tread cautiously.

CONVERSERLY, if your "buy in" is simply a fee, that's absurd...you're already taking a 50% paycut and paying 3 yrs worth of sweat equity.

 

[mike-sheree]

I think buy-ins for tangible assets is a risky proposition in pathology as the landscape has been and still is changing regularly, particularly with respect to lab ownership. It's might be feasible if one has a multitude of accounts or the group can manage losing or gaining smaller accounts regularly, but I'd be cautious if all the eggs are in one basket (ie. 1 big hospital contract is the majority of business), or if there's some big derm or GI accounts that could easily (and likely will given the trend) sell out to private equity in the future (happens all the time with the current PE landscape).
Some groups make it work, or they themselves are the ones that swoop in and undercut the local guys and snag arrangements with big GI and derm groups, but equity in pathology is a risky proposition given the ability of big players (large corporate labs and health systems) to undercut via economy of scale. Tread cautiously.

CONVERSERLY, if you're "buy in" is simply a fee, that's absurd...you're already taking a 50% paycut and paying 3 yrs worth of sweat equity.

OR, it’s 3 years worth of “dues”. Speaking 1992 dollars, if your compensation goes from $160,000k/yr with ~10k bonus up to $700,000 your “sweat equity “ is worth it after $160,000K buy-in of significant tangible assets. BUT, if trust is non-existent in your potential arrangement it is a MAJOR crap shoot. I got lucky- some folks don’t.
As they say in the world of international diplomacy, “trust is the coin of the realm”. I think it is damned near extinct today, hence the heightened attractiveness of double-dip employment careers. AND, over several decades, I have seen the most profitable, promising, prestigious groups in significant metro areas dwindle to diddly squat. I’ve also seen the same little small one/two person shop thrive. Nothing can be accurately predicted and no guarantees can be assumed. It’s not your Father’s Oldsmobile!

 

[WEBB PINKERTON]

I had to look at the date of this post to see when the OP posted it. 175k buy in...LOL

It sucks LADOC isn't here anymore. His hospital system sold out to labcorp. Would be interested to hear how he is doing.

 

[octopusprime]

OR, it’s 3 years worth of “dues”. Speaking 1992 dollars, if your compensation goes from $160,000k/yr with ~10k bonus up to $700,000 your “sweat equity “ is worth it after $160,000K buy-in of significant tangible assets. BUT, if trust is non-existent in your potential arrangement it is a MAJOR crap shoot. I got lucky- some folks don’t.
As they say in the world of international diplomacy, “trust is the coin of the realm”. I think it is damned near extinct today, hence the heightened attractiveness of double-dip employment careers. AND, over several decades, I have seen the most profitable, promising, prestigious groups in significant metro areas dwindle to diddly squat. I’ve also seen the same little small one/two person shop thrive. Nothing can be accurately predicted and no guarantees can be assumed. It’s not your Father’s Oldsmobile!

Edit: "...some most folks don't."

Ok if your partners are pulling in $700k, and you're making $350 as an employee, plus a $175k buy in, you're essentially pulling in ~$300k/yr for those first 3 yrs, which is fine (though simpler to just make your salary commensurate with a 'buy in'). Or if there's some significant real-estate/assets you're going to own a portion of, great.
But if no tangible assets or your partners are pulling in $400-500k, that's the equivalent of making $150-200k/yr for 3 years. Need more details.

 

[DrVan Nostrand]

I had to look at the date of this post to see when the OP posted it. 175k buy in...LOL

It sucks LADOC isn't here anymore. His hospital system sold out to labcorp. Would be interested to hear how he is doing.

did he get banned? lol

 

[Pathprimer]

"We realize that there are a lot of misconceptions about the current state of private practice pathology. If you are interested in a fantastic work-life balance, great compensation and an amazing community, please apply! Also, feel free to reach out if you have any questions. This position is available summer of 2025, with an earlier start date if necessary. If you are interested, send your CV and cover letter to: [email protected]"

Saw a job post on pathoutlines today. Found it hilarious. Maybe they frequent this forum? LOL

 

[Sawback3]

if your "buy in" is simply a fee, that's absurd...you're already taking a 50% paycut and paying 3 yrs worth of sweat equity.

Absurd is right. I guess you’re buying into a ‘club’ of sorts; a ‘Made Guy’. It would depend heavily on the protections offered, but without tangible assets, your share can’t be worth much.

I am personally unsure of how this works, though. I’ll let the bean counters pay me my production bonuses.