Choosing the right partner to add to your practice takes planning and strategic decision-making. When the match is right, the benefits can be significant: more hands to share the load of running a medical practice, and increased revenue and expanded patient population. A partner can bring in new, complementary strengths and skills. Adding a partner is also a way to prepare for the future by setting your practice up for a smooth transition if you or another partner is looking toward retirement.
But a mismatched partnership can cost you time and money, not to mention endless amount of conflict, dysfunction, and liability. Mutual trust and a long-term commitment on both sides are critical.
“Just like with marriage, it can be very difficult, traumatic, and expensive to break up with a partner,” says Clifton Straughn, MD, partner at Direct Access MD, a concierge-service model family practice in Anderson, South Carolina. “So, do your due diligence and take your time.” Picking the right partner is essential.
Before you begin the process of partnership with a physician, be sure you know what you need, the skill sets you’re looking for to complement your practice, and the personality characteristics and values that are important to you so the person you choose can check all the boxes and not just add a name to the letterhead.
“A lot of times, doctors go into this with just a general idea that they need more doctors or that they would like to be bigger or have more clout,” says Tim Boden, a certified medical practice executive with over 40 years of experience.
“But you have to understand that to a certain degree, if you’re bringing somebody in who has basically an identical clinical profile to yours, you’re going to be sacrificing a bit of your lunch for a while until that person builds a name for himself or herself. A new partner’s skill set should match the need that you’re trying to fill.”
Figure out and discuss with your current partners how much it will cost to bring in a partner between their compensation and additional practice expenses. How much revenue will you expect the partner to generate? Will your practice break even the first year or the second? And how will you cover any shortfall?
It’s also essential to understand how the day-to-day operation of your practice will change after you add another partner.
Will the new partner’s percentage of ownership be the same as that of the other partners?
Will their ownership include a percentage of the facility, equipment, supplies, and accounts receivable?
How will you split call and work hours?
How will decision-making work?
How would buyout work if a partner were to leave the practice, and is there a minimum obligation, such as a 5-year commitment?
As a team, you may also want to discuss “soft skills,” or the way you’d hope a partner would represent your practice to patients and the community.
“These can be harder to quantify,” says Straughn. “Evaluating them can take artful questions and simple observation over time.”
It’s a Slow Process
Many practices offer paths to partnership rather than bringing in a partner straight away. With this process, an incoming physician works toward that goal. If you’re going this route, discuss this during the hiring process, so that both sides are clear about the process. Rule number one is to make sure that new hires understand that partnership is possible, although it’s not a given. The typical partnership track is 2 to 3 years, but you can set the timeline that works best for your practice.
Boden recommends at least a year for this period so as to allow you the opportunity to evaluate the new member, how they work, and how they fit with your team. The partnership track method is typically for young or fairly new physicians.
“I would avoid ever promising an ownership position to a recruit,” says Boden. “I would only show them how it can happen and what it would look like if they qualify.”
Consider Professional Help
If you want to be sure you weigh all the pros and cons of your new partner, a medical practice consultant may be the way to go. A consultant can identify many situations that you might overlook.
Some services offer a medical practice assessment to help you see where you need the most help and what skills might be best to bring to the table. They might also be able to take over some of the administrative work of a new hire if you like, so you and the other partners can focus solely on interacting with and observing the clinical abilities of a potential partner.
A healthcare attorney can help you build a sound agreement regarding decision-making and how the fees/costs will be divided and can put legal protections in place for everyone involved.
You’ll need a buy-sell agreement (also called a partnership or shareholder agreement) that spells out the terms and conditions, including buying into and selling out of the practice. A fair agreement respects all parties, while a poor one that offers the new partner a minority share or lessor profit may favor the practice’s current partners but could breed resentment, undermining the practice’s culture and morale.
Ideally, you’ll select someone with excellent credentials and experience with similar goals for the practice who blends well with your staff. It’s best to find someone who fits well culturally with your office and who practices medicine with a similar patient philosophy.
To that end, Boden encourages out-of-the-box questions for interviews, such as what a potential partner wants to make sure they have room for in their life, or what their ideal work and family life looks like. The more you can assess components such as emotional intelligence, he says, the fuller picture you’ll get.
“You’re going to be spending major hours every week with this person, and your destiny is going to be tied up with theirs to some degree,” says Boden. You can teach somebody the job, but if you don’t genuinely like and respect them and want to work with them daily, it may not be the right fit.
Rachel Reiff Ellis is an Atlanta-based freelance writer and editor specializing in health and medicine. She is a regular writer for WebMD and Fortune Well, with additional work appearing in Prevention, Oprah Magazine, Women’s Health and others.