What is your partnership setup?

[Blackmateria]

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For those who are "partners" in their pain groups,

1. How did you earn it or buy in

2. How are you paid

3. Do you have equal votes on decisions with the other partners?

 

[drusso]

For those who are "partners" in their pain groups,

1. How did you earn it or buy in

2. How are you paid

3. Do you have equal votes on decisions with the other partners?

Medical Practice Partnership

Buy-In Framework, Compensation Model, and Partnership Philosophy​

Purpose​

The goal is to establish consistent language and expectations so that buy-in discussions proceed smoothly and without misunderstanding.

Components of a Buy-In Transaction​

A buy-in transaction can be understood in three parts: the cover charge, the accounts receivable transition, and the reserve ante.

1. Practice Valuation (The Cover Charge)​

A formal practice valuation informs but does not solely determine the purchase price for a buy-in. The valuation establishes a baseline from which the partners negotiate.

For example, if a practice is valued at $1 million, a 25% partnership share would carry a cover charge of $250,000. This is the price of admission to the partnership table.

Deferred bonuses and accrued vacation cannot be applied toward the cover charge, as doing so could create potential tax liability.

The cover charge may be financed internally by existing partners at their discretion, or externally by the incoming partner, who pays it upfront.

2. Accounts Receivable Transition​

All accounts receivable generated by the associate physician prior to the buy-in remain with the existing company and its prior owners.

Becoming a partner means starting fresh. The new partner begins building new receivables from the date of their partnership onward.

3. Reserve Contribution (The Ante)​

The practice maintains approximately up to 3 months of operating capital in cash reserves as a standard business practice.

The incoming partner must contribute their pro rata share of the reserve before they are eligible to receive distributions under the compensation model.

For example, if the company maintains $400,000 in reserves, a full-share 4th partner would ante up $100,000 (25%) before being eligible for distributions.

Physician Compensation Model​

The compensation model progresses through four phases, each reflecting a different stage of the physician’s financial relationship with the practice.

Phase 1: Subsidization​

The new physician receives predictable, fixed compensation (salary or guaranteed draw) from the existing owners while their patient base and accounts receivable mature. This phase provides stability during the ramp-up period and lasts for a defined timeframe agreed upon in advance.

Phase 2: Productivity​

Compensation shifts to a percentage of collections. This phase continues until the subsidy costs and sunk costs incurred by the existing owners have been recouped. The duration is directly tied to the length of the subsidization phase.

Phase 3: Equity / Partnership​

The physician transitions to the full cost-allocation proforma used by the partnership. Compensation is now determined by the practice’s financial model, which accounts for both direct and indirect overhead, and includes profit-sharing as defined by the partners.

Phase 4: Risk Sharing​

The partner is fully exposed to both the upside and downside of business performance. Compensation incorporates the cost-allocation model plus the allocation of revenue and profit from ancillary service lines. This is the mature, long-term compensation structure of a full partner.

Partnership Philosophy​

Beyond the mechanics of transactions and compensation, the quality of a partnership depends on shared values, mutual commitment, and clear expectations. The following principles should guide the formation and maintenance of partnerships.

The Model Serves the Mission​

A compensation model is ultimately just numbers on a spreadsheet—it can be adjusted as needed. However, the model should reflect the ground truth of the business’s financial dynamics and articulate a philosophy of effort and reward that promotes productivity. As the saying goes:

“Show me your budget, and I’ll tell you your values.”​

Anticipate Part-Time Production​

Partners may work part-time for many legitimate reasons—family commitments, health, work-life balance, sabbatical, or professional development. The compensation model should anticipate and accommodate this scenario rather than treating it as an exception. Failing to prepare for this reality is preparing for conflict.

That said, the terms “full-time” and “part-time” deserve careful definition. Hours available for clinical duties differ from revenue production. A week of high-volume procedural work will produce different financial results than a week spent staffing new patients with APPs, handling administrative tasks, cultivating new business-development relationships, or supervising behavioral-health providers. The practice should determine whether full-time status is measured by clinical hours, administrative contribution, revenue targets, or some hybrid threshold.

“It isn’t glamorous, but cleaning horse stalls is good for the horse.”​

Autonomy Is a Partnership Privilege​

Control over one’s schedule and production is a benefit reserved for partners who have earned their seat at the table. Non-partner employed providers should commit to full-time work—both legs and butt in the canoe, oars in the water, rowing the boat. Understanding the chain of command is mission-critical. Experience has shown that employment arrangements with providers who do not share the partnership’s passion, commitment, and thirst for adventure for growing the practice often fail to endure, even when those individuals make meaningful short-term contributions.

“Many hands make for light work.”​

Character Matters​

The quality, success, and satisfaction of any business partnership may be best predicted by each partner’s relational style. Individuals who bond and separate well from others, who are skilled at creating community, who avoid self-defeating and self-destructive behavior, and who approach relationships from a place of security tend to make the best partners. When evaluating a potential partner, consider not just their clinical skills and productivity, but also how they form and maintain relationships, their personal "origin story," and family history.

“We are only as needy as our unmet needs.”​

 

[LaminaV]

How do you determine a practical valuation ? Is that some form of ebitda?

 

[drusso]

How do you determine a practical valuation ? Is that some form of ebitda?

You hire a firm to come in and do it. Usually costs between $2K-$5K, depending upon how rigorous you want it and for what purpose.

 

[Uncertain particle]

Currently a “high producer” hospital-employed physician exploring private practice opportunities. A few questions I’d appreciate clarification on:

1. What’s a reasonable guaranteed period before transitioning to productivity? I’ve seen anything from 6 months to 2 years. For what it’s worth, at my current hospital-based job, I exceeded 8,000 wRVUs after one year and am currently hitting between 10,000–12,000 in year 3. I can perform basically all bread and butter fluoroscopic/ultrasound procedures, as well as implants and advanced interventions, including SCS, pump, kypho, SI fusion, BVNA, ReActiv8, endoscopic transections, etc.
2. What’s a reasonable collection percentage? I’ve heard anywhere from 30% to 55%. Should that be a percentage of professional fees only, or of everything collected for encounters the patient has with me?
3. If the practice is PE-backed, should I run and never look back?
4. Is it reasonable to request a clearly written-out partnership track and ASC buy-in structure upfront?
5. Some practices are hiring for a newly opened branch, while others are offering roles at an established clinic with an ASC. The latter appears to me to be the more reliable/better option. Is that generally fair, or am I missing something?

 

[Dr. Ice]

Currently a “high producer” hospital-employed physician exploring private practice opportunities. A few questions I’d appreciate clarification on:

1. What’s a reasonable guaranteed period before transitioning to productivity? I’ve seen anything from 6 months to 2 years. For what it’s worth, at my current hospital-based job, I exceeded 8,000 wRVUs after one year and am currently hitting between 10,000–12,000 in year 3. I can perform basically all bread and butter fluoroscopic/ultrasound procedures, as well as implants and advanced interventions, including SCS, pump, kypho, SI fusion, BVNA, ReActiv8, endoscopic transections, etc.
2. What’s a reasonable collection percentage? I’ve heard anywhere from 30% to 55%. Should that be a percentage of professional fees only, or of everything collected for encounters the patient has with me?
3. If the practice is PE-backed, should I run and never look back?
4. Is it reasonable to request a clearly written-out partnership track and ASC buy-in structure upfront?
5. Some practices are hiring for a newly opened branch, while others are offering roles at an established clinic with an ASC. The latter appears to me to be the more reliable/better option. Is that generally fair, or am I missing something?

Why do you want to leave the hopd job? What’s your geography?

 

[Uncertain particle]

Why do you want to leave the hopd job? What’s your geography?

Indiana. To be fair my current gig is not bad at all. The conversion factor is good, I have a reasonable amount of autonomy, and the team is strong. The main issue is the location. Small-town living hasn't worked well for me and my wife. we're also originally from Europe, and flying back home from my area is a pain.

As i'm considering this move the real question is whether I want to work at the hospital again. I guess I've also convinced myself that I can likely do better financially, with less bureaucracy, more autonomy and ownership, at a private practice than staying as an employed physician.

 

[drusso]

Currently a “high producer” hospital-employed physician exploring private practice opportunities. A few questions I’d appreciate clarification on:

1. What’s a reasonable guaranteed period before transitioning to productivity? I’ve seen anything from 6 months to 2 years. For what it’s worth, at my current hospital-based job, I exceeded 8,000 wRVUs after one year and am currently hitting between 10,000–12,000 in year 3. I can perform basically all bread and butter fluoroscopic/ultrasound procedures, as well as implants and advanced interventions, including SCS, pump, kypho, SI fusion, BVNA, ReActiv8, endoscopic transections, etc.
2. What’s a reasonable collection percentage? I’ve heard anywhere from 30% to 55%. Should that be a percentage of professional fees only, or of everything collected for encounters the patient has with me?
3. If the practice is PE-backed, should I run and never look back?
4. Is it reasonable to request a clearly written-out partnership track and ASC buy-in structure upfront?
5. Some practices are hiring for a newly opened branch, while others are offering roles at an established clinic with an ASC. The latter appears to me to be the more reliable/better option. Is that generally fair, or am I missing something?

1. What’s a reasonable guaranteed period before transitioning to productivity?

For an experienced interventional pain physician, 12 months is reasonable. Eighteen months is generous. Two years is usually only appropriate if you're opening a new market from scratch. The guarantee exists to allow referral patterns, credentialing, and payer contracts to mature not because an experienced physician needs that long to become productive. I would also negotiate protection if the practice cannot provide adequate clinic time, block time, staffing, or equipment.

1. What’s a reasonable collection percentage?

The more important question is "percentage of what?" Make sure the contract clearly defines collections. For an employed physician in private practice, 35–45% of physician-attributable collections is common, and 45–50% is excellent, depending on how overhead is handled. I would also want complete transparency regarding ancillary revenue (ASC, imaging, biologics, etc.) generated by my patients, even if that revenue is not included in physician compensation.

1. If the practice is PE-backed, should I run?

Not necessarily, but I would ask a lot more questions. The key issue isn't private equity itself, it's governance. Who controls physician compensation, staffing, scheduling, clinical operations, and future ownership? If physicians are truly leading the practice, PE may simply be a capital partner. If physicians are primarily there to generate EBITDA for someone else's exit, I would tell them to pound sand.

1. Is it reasonable to request a clearly written partnership track and ASC buy-in structure?

Absolutely. If partnership is part of the recruiting pitch, it should be in writing before you sign. The agreement should clearly define eligibility, valuation methodology, financing terms, ownership rights, voting rights, and ASC buy-in opportunities. "We'll work that out later" is not a partnership plan.

1. Is an established clinic with an ASC generally a better opportunity than a newly opened branch?

In most cases, yes. An established clinic typically has a mature referral base, existing payer contracts, experienced staff, procedural volume, and ASC access, making your path to productivity much more predictable. A new satellite can be an excellent opportunity, but only if you're compensated for taking on the additional risk with a longer guarantee, stronger income protection, and a meaningful equity opportunity.

My advice: Focus less on starting salary and more on long-term alignment. The best jobs allow physicians to participate in the value they help create through partnership, real estate, ASC ownership, and meaningful governance, not just higher RVU production.

 

[Uncertain particle]

That's very helpful, thank you, I don't mean to hijack this thread, but I assume others have similar questions. Here's a few more:

How should 'personally rendered' or 'physician-attributable' collections be defined in the contract — and what specifically gets carved out? Is it reasonable to request that my collection percentage apply to all collections on services I personally render — including the technical and facility components, not just the professional fee?

If I'm joining a PE backed practice that's 3-4 years in so likely to sell again in 2-3 years, and perhaps during my associate years — before I've converted to partner — how do I protect both my partnership track and my promised equity buy-in so a change of ownership doesn't erase them? Can I get the partnership conversion terms — the eligibility criteria, the timeline, the buy-in valuation method — written so they bind a successor owner, not just the current one?

 

[drusso]

That's very helpful, thank you, I don't mean to hijack this thread, but I assume others have similar questions. Here's a few more:

How should 'personally rendered' or 'physician-attributable' collections be defined in the contract — and what specifically gets carved out? Is it reasonable to request that my collection percentage apply to all collections on services I personally render — including the technical and facility components, not just the professional fee?

If I'm joining a PE backed practice that's 3-4 years in so likely to sell again in 2-3 years, and perhaps during my associate years — before I've converted to partner — how do I protect both my partnership track and my promised equity buy-in so a change of ownership doesn't erase them? Can I get the partnership conversion terms — the eligibility criteria, the timeline, the buy-in valuation method — written so they bind a successor owner, not just the current one?

Don't F8ck around with PE practices. "They will never love you back."

 

[eyeeye_captain]

a PE backed practice… protect both my partnership track and my promised equity buy-in

My sweet summer child, if you think those things are real in a PE practice I’ve got some amazing oceanfront property in Nebraska that may interest you.

 

[Uncertain particle]

I figured, but I appreciate the confirmation!

So the question becomes, how do you protect those partnership and equity purchase promises in a practice that isn't PE-backed? Certain markets are just so saturated with PE firms that I think it's reasonable to assume these practices may eventually be acquired..

 

[Gnarvin]

I figured, but I appreciate the confirmation!

So the question becomes, how do you protect those partnership and equity purchase promises in a practice that isn't PE-backed? Certain markets are just so saturated with PE firms that I think it's reasonable to assume these practices may eventually be acquired..

That’s the neat thing, you don’t. If it isn’t in writing in a legally binding contract, then there isn’t a realistic way to “protect” promises.

 

[eyeeye_captain]

I figured, but I appreciate the confirmation!

So the question becomes, how do you protect those partnership and equity purchase promises in a practice that isn't PE-backed? Certain markets are just so saturated with PE firms that I think it's reasonable to assume these practices may eventually be acquired..

So I’m in a different field (retina), which is infested with PE.

You ask for reasonable accommodations in the contract with the independent group. A buy out option is very common, and some groups will also have a buy in option where if everyone is happy prior to a potential sale you can make partner then and there to benefit like the other folks. A medical contract lawyer will be more useful as some of this may be state dependent. Honestly any truly reputable group will protect you ahead of time. If they balk, eh…

I feel you on certain markets being essentially closed to non-PE. I could rattle off a dozen big ones for us.

 

[mille125]

That's very helpful, thank you, I don't mean to hijack this thread, but I assume others have similar questions. Here's a few more:

How should 'personally rendered' or 'physician-attributable' collections be defined in the contract — and what specifically gets carved out? Is it reasonable to request that my collection percentage apply to all collections on services I personally render — including the technical and facility components, not just the professional fee?

If I'm joining a PE backed practice that's 3-4 years in so likely to sell again in 2-3 years, and perhaps during my associate years — before I've converted to partner — how do I protect both my partnership track and my promised equity buy-in so a change of ownership doesn't erase them? Can I get the partnership conversion terms — the eligibility criteria, the timeline, the buy-in valuation method — written so they bind a successor owner, not just the current one?

you cant

 

[PainDoc2025]

Currently a “high producer” hospital-employed physician exploring private practice opportunities. A few questions I’d appreciate clarification on:

1. What’s a reasonable guaranteed period before transitioning to productivity? I’ve seen anything from 6 months to 2 years. For what it’s worth, at my current hospital-based job, I exceeded 8,000 wRVUs after one year and am currently hitting between 10,000–12,000 in year 3. I can perform basically all bread and butter fluoroscopic/ultrasound procedures, as well as implants and advanced interventions, including SCS, pump, kypho, SI fusion, BVNA, ReActiv8, endoscopic transections, etc.
2. What’s a reasonable collection percentage? I’ve heard anywhere from 30% to 55%. Should that be a percentage of professional fees only, or of everything collected for encounters the patient has with me?
3. If the practice is PE-backed, should I run and never look back?
4. Is it reasonable to request a clearly written-out partnership track and ASC buy-in structure upfront?
5. Some practices are hiring for a newly opened branch, while others are offering roles at an established clinic with an ASC. The latter appears to me to be the more reliable/better option. Is that generally fair, or am I missing something?

A few side questions about your HOPD job as I will be starting a HOPD job soon and interested in also hitting 10-12k RVUs:
1) Whats your $/wRVU?
2) How many clinic + procedure days per week?
3) How many patients do you see on clinic days?
4) How many procedures on procedure days?

 

[Uncertain particle]

A few side questions about your HOPD job as I will be starting a HOPD job soon and interested in also hitting 10-12k RVUs:
1) Whats your $/wRVU?
2) How many clinic + procedure days per week?
3) How many patients do you see on clinic days?
4) How many procedures on procedure days?

68$/wrvu
2 clinic days, 1 procedure, 1 OR. 5th day I'm splitting between clinic, procedures and OR.
I schedule 28 patients in clinic anticipating no-shows, end up seeing 22-23.
25 procedures a day. That's the fastest my HOPD can go, even though I'm very quick! My hospital just can't move faster than that. I've heard others say the same thing. >35 is definitely doable in private practice. Mostly fluro (Epidurals, facets, RFAs and trials), few US guided, I keep all landmark based stuff in clinic (knees, tpi etc)

7k wRVU first year, finished second just below 9, 10+ thereafter. Looking back I could have ramped a little faster. I'd say don't fall in the trap of taking it easy while you have a guaranteed base, that is if you want to hit 10+k wRVUs soon.

 

[Ronin1]

Hope math is simple. You need about 100 encounters a week. This should get you to 4800.

My wrvu value per encounter is 2.5. Do the math. For me

4800*2.5*71=852,000.