Understanding Buy-in

Question: I am a physician employed in a small family practice. I was told some time ago that I would have the opportunity to become a partner, and was wondering what the buy-in process usually entails. Do I have to borrow the money to buy in, or does the clinic usually take a percentage of my production per year until the buy-in is complete?

Answer: Usually buy-ins are structured so that the practice pulls money from your pay during the employment period, which is normally one to four years. The terms of the buy-in, as well as the period of time, totally depend on the contract. You should request a copy of the agreement in writing as soon as possible. This need not imply the practice is asking you to partner right now, but it does give you a sense of what to expect. If other physicians have become partners in the practice, there must be a buy-in in place, even it is has never been written down. Your ideal would be to have an agreement in which the buy-in money is taken from your collections, not straight cash, with as little negative financial impact to you as possible.