All the CMGs seem to be offering physician invested equity programs to some degree. Apollo has something similar....It's called ApolloMD Ownership program or something similar. They sell stocks that are supposedly undergo valuation by an independent third party. You can buy up to 10K shares per year. At certain times of the year, they really push it. You'll get emails encouraging you to take advantage of the program, blah blah. They guarantee 8% annualized growth. As much as I despise these types of programs, you have to hand it to them (all CMGs)... they are masters at getting money out of their workers. It's absolutely brilliant to figure out a way to raise capital from none other than your slaves working down in the pit! Brilliant. Some docs really buy into these things and are maxing out their investment each year. Here's the problem:
1) Lack of transparency, regulation, fiduciary liability, etc.. - Your money isn't regulated or protected like it is in the open market. If the company files for bankruptcy, gets bought out or goes belly up, you can kiss your money goodbye. Don't believe me? Just look at some of these USACS docs, or any of the docs who fled to TX to work for Neighbors FSEDs before they filed for bankruptcy. I know one doc personally who invested 250K and got $0 back.
2) Non tax-deferred - If you haven't maxed out your SEP or 401K, why on earth would someone want to invest in a non tax deferred vehicle? It makes no sense and I see docs doing this all the time.
3) Psychological indentureship - Part of our power over these companies is the sheer breadth of options available to us on any given day. Most of us could quit working in one ER and go to work in another at a moment's notice with no sweat off our back. Worst case scenario? We could jump on a plane and start doing locums virtually anywhere with little to no effort other than a phone call to a staffing agency, signing a contract and filling out the obligatory paperwork for credentialing. Recruiting and hiring us is not easy. We hold all the cards for the most part... Meaning that if the CMG doesn't make us happy or foster an enjoyable work place environment, assuage any fears we have about fair compensation for our efforts, etc.. then we simply can turn in our notice and find another job anywhere we want. We have no patients to follow us, no office space leases to terminate, no secretaries or MAs to fire, etc.. I don't know about you guys but that gives me a tremendous amount off psychological confidence and control over my personal destiny. That's perhaps, the biggest reason I don't invest in CMG equity offerings. Because you're not really getting any equity. You don't own anything. And the more money you have tied up in the CMG, the more psychological control they have over you. You've got 100K invested in their ownership "stock offering"? They know you aren't going anywhere. You almost can't help yourself but be emotionally invested in the company. After all, they've got your money! It's just difficult to think straight or to evaluate your position with any real objectivity. You lose negotiating and leveraging power. Want to re-negotiate a 3yr contract for a small additional sign on? Why should they do that? You've got 100K invested in their equity program. That's additional assurances to them that you aren't really considering another job, you're just bluffing and they are more likely to call you on that bluff given that scenario.
Now, I'm not hating on all these companies for offering the stock equity programs in the first place. Hell, IT IS extremely smart from a business perspective and I can't blame them for doing it. However, the only equity or stock offering I would ever do would be for a private SDG with REAL equity ownership. You simply aren't going to get that working for any CMG.
