Wait what? 80k a month in overhead PER doc???
So, basically this is a huge infusion outfit and they probably have 20+ employees, and a huge office lined wall to wall with infusion chairs. Heck, if the profit (not revenue) is 1.8M then they're doing something right.
My big problem with this sort of set up is that:
1. I would bet money they're just giving half the people that walk in the door infusions and not even offering SC treatments half the time. And this isn't including the fact that I would bet money a lot of these pts don't even have real disease.
2. Your ability to get infusions may not be what you or they think it is. Between JAKs and SC DMARDs, Medicare Advantage, and step up requirements from private insurers, getting a big panel of infusion patients is near impossible.
In #2 scenario, you're basically helping them pay their overhead, while not being able to generate the same kind of infusion revenue (assuming their infusion revenue isn't split evenly).
Payer mix means what percent of their patients are Medicare versus Medicaid versus private payer.
Agree with all this. We need details.
I work PP in the semi rural South currently. My deal was:
-$300k base
-$25k signon
-$50k loan repayment
My overhead is something like $35k/month. $80k/month is extremely high *but* for a small rheumatology PP in Seattle that may not be all that surprising (this is one of many reasons small rheumatology practices struggle, or get mixed up with Articularis or Bendcare or those other private funding groups). My “hot take” is that this overhead situation is the main reason they’re trying to add another partner - the existing partners are straining under the weight of the overhead in one of the most expensive locales in America. One question I always asked at my interviews was “why are you adding another partner?” The answers I got were sometimes very revealing.
My questions:
- what other ancellaries are available? Do they have a lab, their own XR/CT/MRI machines? I only heard DEXA as an ancillary source - DEXA doesn’t amount to much.
- I agree that this sounds like an infusion mill where they’re basically running Remicade and Orencia etc into practically anyone they can get an insurance auth on, including people that probably have just fibromyalgia. $1.8 million in profits for
two rheumatologists doesn’t break down any other way (unless these guys are also running a pill mill or dealing coke on the side or something…don’t laugh, some docs near me just got indicted for this) - and I would also bet this is one of these rheum practices where the partners plow through 30 pts a day, spending 5 min with each one while practicing really ****ty medicine (there are a surprising number of rheums out there like this, unfortunately). This isn’t cool, isn’t ethical, and if it is indeed what is going on you don’t want to be anywhere near these people. Chances are this isn’t the only sleazy thing they’ve been doing.
- what is the “productivity bonus”
- are you the first physician they’re trying to add as a future partner? Or do they regularly burn through “future partners” that they then deny partnership to (this happens regularly out there, unfortunately)
- you need to see a full breakdown of the practice finances. They need to show you profits, expenses, operating costs, and where it is all breaking down and who is getting what. If there is any hesitation or reluctance to do this, RUN! I got mixed up in a really bad PP deal before my current PP job with one other rheumatologist that refused to show her finances to me or my attorney when I signed - she turned out to be a con (wo)man who hadn’t paid her taxes in years and was doing all sorts of other janky nonsense too. Thankfully I got out of that nonsense after a month, but still. Good partners won’t be afraid to show what’s up with their numbers. It sounds like you’ve been given very little info here.
- look carefully at the wording of the contract regarding partnership. You need to know buy in details, and what you have to do to become a partner. What you want to see is a more or less well defined path to partnership (ie, if you hit this amount of collections in this timeframe, you become eligible, then you start a buy in process, etc etc). If the contract is extremely vague (“option to become a partner in x years”), then I would regard it as a situation where they’re not committed to actually making you a partner. You don’t want it to purely be their whim whether or not you become a partner, no matter how good your performance is.
- you also want to know how much the “buy in” is. These days, the trend is towards lower buy ins. Mine is only like $25k, spread over 5 years in monthly payments - but at the sleazy practice I described above, they were talking about a $125-150k buy in which is frankly absurd. I have seen practices where the buy in is only $5k, or even nothing. You also need to know what is included in the buy-in - ie, are you buying just into the “practice” or do they own the real estate, the billing company, etc etc and are you buying into those too?
- if you want to do private practice and do well, you have to become comfortable with the “business of medicine”. PP means being much more business minded than you would be in a hospital system (or especially academia). If you are cool with thinking like a businessman as well as a physician and want to learn the business side of medicine, PP is the place for you. If not, it isn’t.
- if you aren’t working with an attorney yet, you need to be. You especially need an attorney to evaluate a partnership track contract
