Physicians Practice Pearls: Give a Little, Get a Lot

Once upon a time, I was the imperial overlord - in my office anyway. As sole owner of a primary-care practice, if I felt we needed a day off, I closed the office. If I wanted to buy something, I bought it. I had absolute power.

And absolute misery. For one thing, I was the last person paid. I got what was left over after the bills and payroll were taken care of. Any mistakes I made came out of my paycheck, sometimes whittling it down to nothing. As much as I enjoyed and excelled at being a physician, my administrative weaknesses drained my salary.

Today, my two partners and I each own a third of the practice. My take-home salary is much higher, and our overall practice direction is great.

Here are some other advantages of taking on a partner or two:

• A partner is motivated to increase the practice’s bottom line. As their piece of the pie grows, so does yours.

• More eyes catch mistakes. Multiple perspectives make it harder to do dumb things.

• Each partner brings different talents. Perhaps you’re not too swift at reading a contract, but your partner excels at it. You can divvy up tasks according to strengths.

Certainly, there are negatives. You can’t make unilateral decisions. Sometimes you’ll have to play peacemaker between your partners. There are more meetings and things happen more slowly than before. You’ll probably spend more time with your partners than you do with your spouse. And medical partnerships can fall apart for the same reasons that marriages do: poor communication, selfishness, or just plain incompatibility. Also, a partner can take advantage of you like no one else if you are not careful. For these reasons, choose wisely.

Still, it’s worth it, especially if you keep these thoughts in mind when selecting a partner:

• Don’t rush. Some physicians feel that after working two to three years in a practice, every physician should have a chance at partnership. False. If a physician simply wants to “be a doctor” and has no interest in owning and running the business, then keep him where he wants to be.

• Clarify expectations up front. What does it mean, exactly, to own a part of the business? How much administration time will be required? What roles will this new partner take in your practice?

• Set up the income-division formula very carefully. Certainly the amount of work a physician does counts, but a partner should also receive some income simply because she owns a portion of the business.

• Get lots of advice. Executing a buy-in is complicated and fraught with potential pitfalls. Should you have a hard buy-in number, or should you do it as a sliding percentage? The best number is usually one where both sides equally suspect the other got a slightly better deal. Seek expert input.

Remember, you worked hard to build the business, taking a lot on your shoulders at the outset. You must be doing something right if others want to join you; don’t sell yourself short during negotiations (which won’t be easy). Done right, the benefits of adding partners far outweigh any of the potential burdens, and ultimately, you’ll find yourself less stressed and much more content.

Robert Lamberts, MD, is a board-certified primary-care physician with Evans Medical Group in Evans, Ga. He is a recognized national expert on EMR. He also maintains a popular, more-or-less healthcare-focused blog, distractible.org. Dr. Lamberts can be reached at rlamberts@EvansMedicalGroup.com.

This article originally appeared in the February 2009 issue of Physicians Practice.