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Group sold to private equity before becoming partner—am I stupid to stay?

Home General/Welcome Group sold to private equity before becoming partner—am I stupid to stay?

  • Avatar Throwaway1 
    Participant
    Status: Physician
    Posts: 5
    Joined: 06/29/2019

    Under a year from partner, was blindsided that my radiology group sold to a corporation.

    Partners got multimillions, I was offered less than 100k

    I will get a small bump in salary from 350 to 400k with a chance at a small additional productivity bonus. ~200k less than partnership income would have been.

    My initial impulse was to say **** them and move on to greener pastures. But the more I think about it, the harder it is. I have family here. My kids have tons of friends and are thriving in school. The wife is happy in her job, but she has a great deal of flexibility that would make it easy to relocate.

    The other jobs here are all academic or other corporate and employed outfits, only the corporate ones are hiring, so moving across the street is not an option.

    My options are:

    1 Suck it up and stay, while resenting the people I work with. The non compete is restrictive and would make a new local job impossible.
    2 Take a similar paying local job or become a remote teleradiologist  (some allow 34 weeks vacation if willing to do nights)
    3 Relocate (included for completeness sake, not a realistic option)

    Wondering if anyone else has been through this and could shed any light.

    #226483 Reply
    Avatar Eye3md 
    Participant
    Status: Physician
    Posts: 69
    Joined: 12/01/2017

    I’m not here with any advice, just sorry you are going through this. Private equity is eating up groups in ophthalmoloy as well. My group has resisted so far. With all of these PE stories out, I’ve often wondered about it from the perspective of an associate in a practice, who’s not a partner yet. Your story tells the tale. PE sounds like a great deal for partners, especially the ones nearing retirement, but not so great for young partners (who get “stock” but have to go with a lower income) and associate physicians, like yourself, who don’t get stock (or very little) and also have to go with a lower income.

     

    Im curious if the non-compete would hold up with this being an unexpected turn of events in your professional life?  If you are serious about staying in the area, may be worthwhile to speak with an attorney. Good luck to ya!

    #226523 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1799
    Joined: 01/08/2016

    ug, sorry you are going through this.  regarding the non-compete, does the prior employment contract hold up when the employing entity no longer exists?

    I think you are on the right track–take the emotion out of being screwed and look at the facts:  It could very well still be the perfect job for you and your family, even at 200k/yr less….

    #226524 Reply
    Liked by Tim, wonka31, billy
    Avatar billy 
    Participant
    Status: Physician
    Posts: 162
    Joined: 04/07/2016

    If youre going to resent your coworkers/the former partners who sold out then start looking for a new job and leave.  If you stay, small slights will seem huge and your life will become miserable at work.  Plus others in your position will start looking for new jobs too flooding the market so its better to be one of the first to leave than one of the last.  If you think you will be able to get over the group selling out, then I would consider staying only IF the new terms of your employment are similar to whatever new job you would get- no sense in leaving for a worse paying job.  But again, if you think you will hold resentment against the former partners (who will very likely still be in charge of your schedule anyway), then go before things turn more sour.

    Avatar StarTrekDoc 
    Participant
    Status: Physician
    Posts: 2040
    Joined: 01/15/2017

    Sorry to hear about the pickle and your partners didn’t look after the rest of the group.  If that’s what you see, I would be cautious on whether there’s other things not seen as far as decisions moving forward.

    Option 2 doesn’t appear bad.  Typo? 34 weeks?  prehaps 34 days.   34 weeks?   It’s a new start without uprooting the family and location.

    Would also pursue with lawyer about the validity of the noncompete and how that would work locally for you specifically.

    Just concerned if the partners got the golden parachute and let folk in the plane — still have primary decision making with the new owners.

    #226532 Reply
    Liked by Peds, billy
    Avatar Throwaway1 
    Participant
    Status: Physician
    Posts: 5
    Joined: 06/29/2019

    Not a typo.

    Night jobs are plentiful because burnout rate is high—night work is hard in radiology, and doesn’t pay well, especially if a remote job. Had one of these offers lined up out of fellowship but decided to go the traditional route instead

     

    #226541 Reply
    Avatar StarTrekDoc 
    Participant
    Status: Physician
    Posts: 2040
    Joined: 01/15/2017

    Not a typo.

    Would be a night job 7 overnight shifts in a row followed by 14 days off.

    These jobs are plentiful because burnout rate is high—night work is hard in radiology, and doesn’t pay well, especially if a remote job. Had one of these offers lined up out of fellowship but decided to go the traditional route instead

     

    its the option I’m leaning towards—as others have alluded to, I will never get over the resentment at the offensive retention offer of 1% their buyout for the same commitment. I am sure things will get ugly if I stay

    Click to expand…

    Perhaps get a few of your junior radiologists to negotiate a more reasonable telerads schedule to break up the 7 nights in a row into something less concentrated q3 call perhaps.

    Then that will be a ready-made group to compete directly when/if the noncompete time expires and willing to take the fight direct to them.

    #226548 Reply
    Avatar OralMaxillofacial 
    Participant
    Status: Physician, Dentist
    Posts: 18
    Joined: 02/10/2016

    At the end of the day you weren’t an owner so you deserve nothing. You have no equity stake. You could have left them high and dry a month before. True partners can’t do that. Is the group small? Do you have the skill sets to run it? If it’s quite large are all the operations and organizational structures already in place therefore you’re not critical anyway? Have the previous owners spent years building the systems, etc? Or is this just PE purchasing revenue stream? Everything in life including medicine is moving towards commoditization of doctors, services, etc.

    That being said I understand how this feels horrible. You had a grand plan of being a good doc and taking care of your patients, wife, kids, etc. I think a bulk of your plan can continue just fine. That being said the night time service sounds great. You’re joining the dark side you’re hating on though. Your PE backed group may force you into it anyway.

    Was there a massive buyin you’re now avoiding? If you’re a business owner you need lots of cash or credit ready to go when things go bad. This transition is happening in my specialty. Associates in my specialty don’t mind it too much once they run the numbers. It’s the loss of control some dislike but most don’t have the skill sets to run a huge practice, HR, legal, marketing and thinking 10 years ahead anyway. The groups have grown over time but the young generation can’t handle it.

    #226550 Reply
    Liked by RosieQ, octopus85
    Avatar Dusn 
    Participant
    Status: Physician
    Posts: 194
    Joined: 01/02/2018

    I’m sorry. PE will just continue to push you to increase revenue and decrease your salary. How else will they make money? And when they sell the group again in a few years it will continue to get worse. Unfortunately I think you’ll need to leave in the near future no matter what your immediate decision is

    #226554 Reply
    Avatar Throwaway1 
    Participant
    Status: Physician
    Posts: 5
    Joined: 06/29/2019

    I understand it wasn’t mine to sell.

    But I also accepted a significant pay cut for years with the intention of one day being a partner. Had I just signed on with corporate on day 1, I would be 200-300k right now.

    It’s a large established group, none of the partners were here when the group was created. They are selling the revenue stream that’s it—a couple people at the top maintain the contracts and do the political heavy lifting, that is it. Most of the partners just show up to work and go home.

    All they are selling is the promise that future radiologists will continue to do the same work they are doing

    I don’t feel like I’m owed the same deal as the partners. But More than bread crumbs as a retention offer.

    #226555 Reply
    Avatar marr65 
    Participant
    Status: Physician
    Posts: 20
    Joined: 08/12/2018

    I’ll offer you a perspective of how your group will run after the sell. Your partners will essentially be looking at their clock until their buyout are vested. After that, they would be part timing or retiring. They would take the easy hrs, less call, more administrative stuff, less clinical work and if the hospital ask the group to offer more coverage they would agree lighting quick without the employees input. Here is the kicker, you would be the on the frontline picking up more clinical work being the grunt. If you quit or complain, they would fire you quickly and replace you in a heartbeat especially if the group is located in a big metro.

    Corporate has anticipated that some will leave but they aren’t hiring. You will be tasked with picking up the slack. If that sounds appetizing to you, then stay. If not, plan for an exit.

    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 697
    Joined: 06/18/2018

    “My initial impulse was to say **** them and move on to greener pastures. But the more I think about it, the harder it is. I have family here. My kids have tons of friends and are thriving in school. The wife is happy in her job, but she has a great deal of flexibility that would make it easy to relocate.”

    And this is how they can skim 1/3 of your income (now you make 400k instead of 600k…and will likely have less benefits). They know most people there have community attachments such that leaving isn’t a realistic option. Sucks man. Sorry.

     

     

    #226567 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2629
    Joined: 05/07/2017

    I understand your frustration.  100k? (how much less than 100k probably matters) however doesn’t seem like they screwed you.  See the other thread where the guy got nothing.

    wrong place, wrong time.  It sounds like intellectually you understand that this was a possibility when you signed on but felt like it was not going to happen/too naive to renegotiate the outcome.    In reading your posts, i think eventually you will view this with less emotion and just as the business decision it was for your partners.  In the end, the 200k you didn’t earn working for corporate won’t be a big deal.  The feeling of betrayal however may or may not linger for a while.

    Evaluate the job on its current merits and stay if emotionally it is still good.  If you enjoyed work before working with your partners, you may still be able to enjoy it.  I understand general radiology right now is very much tilted towards job seekers, so you may have opportunities you didn’t have a few years ago.

    Good luck.

     

    #226573 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2806
    Joined: 01/03/2017

    I’m sorry this happened to you. Unfortunately, they don’t owe you anything. That’s the risk we take when joining a private group. Sometimes it pays off and sometimes it doesn’t.

    By the way you describe resenting your co-workers if you stay, I think staying is the one option that wouldn’t work out.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #226593 Reply
    Liked by jfoxcpacfp
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2484
    Joined: 05/01/2017

    suuuuuuucks.

    i think you have to set a date about a month out on your calendar to push towards and then sit down with a glass of wine on the back porch and think about whether or not this is worth leaving over feelings of resentment.

    others have said this well, the partners really didn’t owe you anything. it’s just a bunch of people looking out for #1. if you were a partner being offered millions how much of it would you have given to the other, more junior people? maybe a lot, maybe nothing. this is why these situations are so toxic. the partners feel (usually with some justification) that they built the thing from the ground up and that it’s theirs. it doesn’t belong to the associates.

    quite frankly in 2019 i would go so far as to say that i just don’t think i’d join an SDG at this point unless the salary/benes were so good that i didn’t care if they sold out from underneath me. if i were faced with joining one i think i’d be negotiating every line on my contract and pushing for specific provisions in the event of a buy out. to be fair this might mean that we just wouldn’t be a good fit for each other.

    but while this feels like a cosmic injustice to you right now you want to make sure you’re not uprooting your family and giving up an otherwise good job b/c you are pissed. hence the suggestion to just put head down for a bit and then try to assess later with a clear head. you also might consider talking to a professional e.g. a counselor or a coach. again you don’t want to do anything stupid just to show the guys who kind of screwed you that you can.

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