The number of physicians in private practice is in steady decline, but before you write off physician partnership as old-fashioned, consider this: the downward trend may not reflect a lack of interest but rather a lack of opportunity. The spike in medical practice mergers and acquisitions means the majority of physician jobs are now with hospitals and health systems, leaving fewer and fewer private practice opportunities. And yet, physicians increasingly prioritize autonomy and flexibility — both of which they are more likely to find as a partner in private practice rather than an employee of a large healthcare organization.
If this is true, private practices have a clear recruitment advantage — if they can articulate it. How leaders structure and present partnership opportunities to physician candidates can make or break the deal. In a recent session at the Medical Group Management Association’s Private Practice Conference, Jackson Physician Search’s Senior Vice President of Physician Recruitment, Tara Osseck, and Capital City Advisors’ Managing Director Matt Phillips discussed this very topic. Keep reading for the key takeaways from their session: “Designing Physician Partnership Models for Recruitment, Retention, and Continuity.”
The Current Market
The worsening physician shortage means the competition for physician talent is only getting tougher. Patient demand is driving volume, and yet there are simply not enough physicians to meet the need. Private practices, once the most common practice setting for physicians, are now competing with hospitals, health systems, and private equity-owned groups to hire physicians. The numbers suggest the employment model is winning. Recent data from the American Medical Association found 42% of physicians are in private practice, but does this reflect what physicians really want?
The New Generation of Physicians
Physicians leave residency with an astounding amount of debt. The average medical school debt combined with undergraduate loans is around $250,000, but one-third owe more than that. Paying off these loans and becoming financially stable is a top priority, but they also want a healthy work-life balance. Predictable hours and ample time off are non-negotiable. They want a steady income without the pressure to work around the clock to meet productivity goals.
Younger physicians believe employed roles are more likely to offer defined schedules, clear coverage models, and less administrative burden. They assume independent practices will require bigger call commitments and more operational responsibilities. They see senior physicians cashing out at a premium and walking away from the financial pressures involved with running a business. Put simply, private practice may seem like more trouble than it’s worth. It’s up to you to show them otherwise.
Most Common Missteps in Communicating Physician Partnership Opportunities
Chances are good that what your practice has to offer is appealing to physician candidates, but the message is often lost in translation. Practice owners, not wanting to overpromise, use vague language to describe the partnership track or defer the conversation altogether, not realizing that by downplaying the potential to become a partner, they are withholding their most powerful recruitment tool. On the other hand, some owners tend to oversell the opportunity, making promises that the contract doesn’t reflect, which will ultimately cause the candidate to lose trust.
Practice owners also tend to conflate culture with structure. Conveying an environment of warmth and family is important, but a positive culture doesn’t replace a well-structured ownership model. Warmth builds connections, but clarity builds trust. This clarity must begin with the first interaction and continue through the entire relationship.
Defining the Partnership
Before practice leaders can communicate the partnership track to candidates, they must be able to define it. This means having a clear and consistent path to partnership that aligns with the practice’s goals. If this is not the case, it may be time to re-examine the current ownership model.
The traditional path to partnership requires an initial period of employment followed by an offer and buy-in. The timeline, as well as the amount and terms of the buy-in, will vary, but the key concept is that after a period of employment in which the physician proves him or herself to be a good fit for the practice, the physician is invited to buy in and start participating in the profits of the practice.
Ownership Model Continuum
The specifics of the ownership model vary, but generally range from an income-dominant model, distributing profits only, to a total return model, which factors in both profits and equity appreciation. There are pros and cons of both, which were touched on in the session, but it is not possible to please everyone. The model must give equal consideration to keeping the initial investment affordable for new partners, reinvesting proceeds for practice growth, and providing fair exit proceeds for retiring physicians.
The model should support and align with long-term strategic goals and objectives for practice. There is no one-size-fits-all approach. Fortunately, a variety of structures, including MCOs and LLCs, provide the flexibility to accommodate the different wants and needs of partners. Most importantly, the model must be transparent, easy to understand, and well-documented.
What They Need to Know
For younger physicians to fairly evaluate a private practice opportunity, they need to have answers to the following questions:
- Will I have autonomy here?
- What does professional development look like? Growth, mentorship, leadership opportunity?
- What does ownership actually cost — financially and in terms of time?
- When is the partnership real, and what could take it away?
- What happens if this doesn’t work out?
Recruitment conversations must cover these questions, whether they are explicitly asked or not. If you do not answer these questions clearly during this process, candidates will make assumptions that may not be in favor of the practice.
As you discuss the partnership with candidates, listen for red flags such as exclusive focus on the base salary, resistance to the associate period, asking about noncompete terms, or not being able to articulate why private practice is appealing to them. For the partnership to be successful, it has to be a good fit on both sides. Full transparency during the recruitment process is critical to evaluate.
Physician Partnership Opportunities
Private practice presents as an attractive option for physicians seeking autonomy, flexibility, and long-term value. Practices hoping to bring new physician partners on board must ensure the partnership is structured in a way that is both accessible and attractive to the new generation while still taking care of their mid- and late-career partners.
But even with an attractive ownership model in place, if leaders aren’t willing and able to explain, in detail, the structure and benefits of partnership to candidates, they are leaving their most powerful recruitment tool on the table. Don’t be vague when you discuss partnership; instead, provide details on both the path to partnership and the benefits of becoming a partner. Most physicians want to be a part of something bigger — make sure they understand how they can achieve this with your practice.
If you are seeking physicians to join your practice, the recruitment team at Jackson Physician Search is eager to learn more about who you are looking for and help you discover potential candidates. Reach out today to learn more.
