For physicians pursuing private practice, the path to partnership may be one of the most consequential aspects of the offer — and the most difficult to evaluate. The details are often vague, or the verbal explanation is left undocumented. However, as physician recruitment becomes more challenging, practice leaders recognize the need to structure appealing partnership opportunities to differentiate themselves in the competition for providers.
At the Medical Group Management Association‘s recent Private Practice Conference, Jackson Physician Search’s Senior Vice President of Recruitment, Tara Osseck, joined City Capital Advisors’ Matt Phillips to walk practice leaders through how to design partnership models that appeal to today’s physicians. The session was built for practice owners and administrators, but it surfaced insights relevant to physicians as well.
If becoming a partner in a private practice is potentially on your physician career path, there is a lot to consider. A recent post by Neal Waters on evaluating private practice opportunities is a great place to start, but it also helps to know where practice leaders are coming from. Keep reading for a few physician takeaways from the MGMA session.
Recognize What “Partnership Track” Should Actually Mean
A well-designed opportunity has a documented, repeatable path that the practice leaders can describe in detail without hesitation. If a senior partner cannot explain in a first conversation how long it typically takes to become a partner, which milestones must be met, what the buy-in entails, and how many partners are typically added each year, consider the lack of an answer to be your answer. Ambiguity or vagueness usually means the practice hasn’t done the work to define the path, or the model is deliberately vague to protect the founding physicians’ interests.
Tara stressed this point to session attendees at the Private Practice Conference, emphasizing the need for transparency and structure. She warned practice leaders not to confuse a positive culture with a well-structured partnership, a point physicians should take note of as well.
Takeaway: Practice leaders should be able to share specifics about the practice’s path to partnership. Before signing a contract, ask for those details in writing. As you move through the interview process, warmth and a sense of connection are important, but they don’t replace a well-structured partnership.
Understand the Ownership Model
Practice ownership models sit on a continuum. On one end is an income-dominant model, where partners share annual profits but the entity itself accrues little equity value. On the other end is a total-return model, in which partners earn both profit distributions and equity appreciation, which are paid out at exit. Income-dominant structures keep buy-ins affordable but may not reward you for years spent building practice value. Total-return models can deliver meaningful exit proceeds but require larger buy-ins and more sophisticated valuations.
The MGMA session touched on the pros and cons of different models, but Tara and Matt concluded that there is no universally correct structure, and there are plenty of options in between the two extremes. They advised practice leaders to be able to explain why the specific model works for their practice and offer details about how it has performed for physicians who have already retired or left the group.
Takeaway: Press practice leaders to reveal not only how the partnership pays out (income vs. equity or somewhere in between) but also the benefits of the particular model. Ask how the model has evolved over the years and why. Most importantly, request the details on how the partnership has performed in recent years for both current partners and those who have already retired or left the practice.
A Checklist for Evaluating a Partnership Opportunity
Now that you know what to look for, don’t hesitate to ask the following questions:
The Path
- How long is the typical partnership track, and has the timeline changed in recent years?
- What percentage of associates over the last five years have made partner?
- Is the path to partnership documented?
The Ownership Model
- Is this an income-dominant, total-return, or hybrid model?
- How is the practice valued, and what specifically does my buy-in represent?
- Can any portion of the buy-in be earned through “sweat equity”?
- What have recently retiring partners actually received upon exit?
Governance
- How are major decisions made: majority vote, managing partner, committee?
- Do all partners hold equal shares, or is there a tiered structure?
- What vote threshold is required for mergers, acquisitions, or admitting new partners?
- How can a partner be removed, and how are disputes resolved?
Financial Health
- Are financial statements available for review?
- How have partner distributions trended over that period? If they’ve declined, why?
- How is the payer mix shifting, and how is the group responding?
- What is the practice’s debt load and overhead trajectory?
The Exit
- What happens if I leave two years after becoming a partner?
- How are death, disability, and long-term illness handled?
- What occurs if the group is acquired by a hospital system or private equity firm?
- Is there a non-compete, and what are its terms?
At the MGMA session, Tara challenged practice leaders to have answers to these questions. She emphasized that winning the next generation of physicians requires transparency, specificity, and real structure behind the promise of partnership. Your job, as a candidate, is to hold them to that standard. Ask the hard questions. Read the documents. The right physician partnership opportunity is worth the scrutiny.
If you are seeking a private practice opportunity that fits your needs, the team at Jackson Physician Search is here to help. Reach out today to explore opportunities that align with your long-term career goals.
Related Resources
- American Medical Association: A Smaller Share of Doctors Are in Private Practice Than Ever
- American Medical Association: What Is Private Practice and Is It Right for You?
- White Coat Investor: How to Evaluate a Medical Practice Buy-In
