When assessing a medical practice partnership, it is important to understand the benefits of buying-in. The physician considering the medical practice buy-in offer cannot assess it properly without an accurate knowledge of the return.

However, the benefits may not be all that significant in terms of financial reward, at least initially.

In most cases, this is because a medical practice partnership net income is not distributed according to percentage of ownership. It is usually distributed based on individual productivity.

Some medical groups will maintain a tier-based system where a smaller portion of the practice net income is distributed according to productivity and some equally.

Very often the return is based on how the partners compensate themselves. Or how the physician will be compensated once his or her buy-in begins. Because most medical practice partnership compensation arrangements are based largely (or entirely) according to individual productivity, the level of the physician’s productivity at the time of the medical practice buy-in is crucial.

Sometimes, at the time of the buy-in, a physician’s productivity isn’t sufficient enough to allow him or her to be successful under the compensation arrangement. Sometimes it’s not sufficient to provide a raise in remuneration from the last year of employment.

The question a doctor must ask themselves in this case is, ‘does it make sense to buy-in to to temporarily earn less compensation than I was earning as an employed physician? If the answer is no, it might mean that the Physician is not ready for a medical practice partnership.

In some circumstances, the best course of action may be deferring the buy-in date until the physician is capable of buying in. Keep in mind, there is very often a direct relationship between buy-in price and partnership compensation.

Also, some circumstances outside of physician’s control can to change for the new partner to be successful. For example, the retirement of or reduction in schedule of another group partner, or retirement of another physician within the community.

Before buying-in, an honest assessment of the physician’s potential for increased productivity in future years if productivity is a good idea at the time of buy-in. There is always potential that the physician’s productivity will increase.