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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?

  • Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    The terrible thing is, with the litany of these kinds of threads popping up, it could happen at the new place as well. Do we really want PE running healthcare? I feel like a bigger deal should be being made out of this. Bad for everyone, except the PE firms.

    #226654 Reply
    Avatar GoBlueMD 
    Participant
    Status: Physician
    Posts: 80
    Joined: 05/27/2017

    Also a rad.

    If you are anchored by family or house, I would try to negotiate a 50-100k guarantee over the 400k for 3-5 yrs. if declined, I would take the telerads job. Other local corporate or telerads groups will have their own myriad of issues

    If not anchored, I will leave. There are still a bit of PPs and employed jobs that pay 500k+ after a 1-2 years of service. However, the location will likely be in the Midwest, south or other rural spot. I will make sure to ask the practice if they are interested in selling to a corporate group. These days, corporates are targeting the larger 50+ rads groups.

    Good luck.

    #226668 Reply
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1137
    Joined: 01/12/2016

    I agree with zaphod. Psychiatry isn’t run this way as far as I’m aware but the idea of medical providers being run by PE seems like a problem, even worse than being run by hospital admin types. I fear this type of medicine more than socialized medicine. That’s just me though, I am sure.

    OP, I agree with mpmd in making a decision in a few weeks. I definitely wouldn’t stay if I couldn’t move past the resentment, which is understandable. But it would make your position in the group unbearable. Good luck figuring out what comes next.

    #226670 Reply
    Liked by Dusn
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1159
    Joined: 11/07/2017

    I agree with zaphod. Psychiatry isn’t run this way as far as I’m aware but the idea of medical providers being run by PE seems like a problem, even worse than being run by hospital admin types. I fear this type of medicine more than socialized medicine. That’s just me though, I am sure.

    Click to expand…

    Definitely not just you wideopenspaces

    #226688 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2629
    Joined: 05/07/2017

    The terrible thing is, with the litany of these kinds of threads popping up, it could happen at the new place as well. Do we really want PE running healthcare? I feel like a bigger deal should be being made out of this. Bad for everyone, except the PE firms.

    Click to expand…

    Is PE worse than regular hospital admin?  It’s just one step in the process.  At some point, the pendulum will swing the other way.  I just don’t know if any physicians who have never owned their practices will want to take out the loans necessary to buy the practices back in 15 years.  Or at that point, if they will have been institutionalized.

     

    #226694 Reply
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1799
    Joined: 01/08/2016
    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.

    Click to expand…

    MPMD, I’m glad you added that second sentence.  (We wouldn’t hire you nor would you want to sign with us.)

    PP/SDGs involve an ownership mentality: even as a nonpartner with great salary/benies, I *absolutely* cared whether the practice was sold out from underneath me.

    OP, it’s pretty sound advice to wait a bit before making a decision.

    #226696 Reply
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 215
    Joined: 05/09/2019

    That’s pretty obnoxious to have a non-compete for radiology.  I would think that most people would just use facility preference to decide where to refer rather then radiologist preference, not sure how you could justify using a non-compete on a radiologist anyway other then a way to keep them at your facility and pay them less then they could make across the street.   Anyways, I would just reverse the situation and decide that way- if you didn’t have that history with your group and you had a place in that city, would you take the job with the group or would you be looking to move away.   You are working for a corporation now and its not the corporations fault that your partners screwed you.  I would probably just try to see it as a high paying job in an area that you like.  If you think that you could do better somewhere else, then you should plan on moving away.   I would meet with a lawyer to see if the non-compete was enforceable though, especially because you changed employers mid career.

    #226698 Reply
    Liked by Dusn, redsand, G
    Avatar Caligas 
    Participant
    Status: Physician
    Posts: 68
    Joined: 12/19/2017

    There may be some legal argument against “they owe you nothing.”

    The devil is in the details. But if you were promised partnership in exchange for a buy in period, you may have enough standing to at least negotiate a chunk of the buy out. Might be worth an hour of a lawyers time to find out.

    Maybe they give you a few hundred grand to avoid a big pain into the ass.

    #226699 Reply
    Liked by adventure
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 323
    Joined: 06/10/2019

    I saw the writing on the wall after 6 years at a multispecialty group.

    So what did I do? I went solo. I became the employer. I became the CEO.

    Solo = autonomy and satisfaction. No politics. No discrimination. No performance pressure. No restrictive covenant. No artificial income limits. No expenses out of my control. No mandatory meetings or committee involvement.

    Group practice, hospital employment, PE employment, corporate employment = nobody cares, we’re all replaceable.

    Every provider I know who sold their practice and is now employed is complaining, even after getting big bucks.

    What are most doctors doing? Getting an employed position and waiting for increasingly empty promises to come to fruition. It’s the employee mindset. It’s the inability to adapt to changes in the system. Sadly, more such stories are coming.

    I’ve been approached. No thanks! Decisions follow us the rest of our lives. Do not sacrifice the long term for the short term appeal. Contemplate wisely.

    #226709 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2484
    Joined: 05/01/2017

    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.

    Click to expand…

    MPMD, I’m glad you added that second sentence.  (We wouldn’t hire you nor would you want to sign with us.)

    PP/SDGs involve an ownership mentality: even as a nonpartner with great salary/benies, I *absolutely* cared whether the practice was sold out from underneath me.

    OP, it’s pretty sound advice to wait a bit before making a decision.

    Click to expand…

    Of course I would care if a SDG I was part of was sold.

    The problem is that time and time again it appears that the people who control SDGs don’t care much about the associates and don’t practice ethical disclosure when buyouts are coming down the pipeline.

    How many times have we seen this post or heard about this?

    I have nothing against a buy-in period to be a partner in an SDG. 15 or 20 years ago it was clearly the norm and clearly worth it. Now what I’m worried about for my graduating residents is that the SDGs talk tons of smack on the CMGs, attract grads, and then sell out. A few senior folk walk away with FU money, the rest are left covering calls and worrying about their future.

    If one of my residents was joining your group would you provide them a written guarantee that the group would not be sold or that if it was they would get a reasonable cut? I’m sorry but this “ownership mentality” to me seems to be at best a double-edged sword and at worst a way to control early career docs.

    #226712 Reply
    Avatar octopus85 
    Participant
    Status: Resident
    Posts: 229
    Joined: 08/13/2017

    This is tangential, but I’m confused. If you’re not yet partner and your group is sold, are you upset because there was an implied promise that the group would continue to be an SDG and you’d become a partner, but said promise was *only* implied, not explicitly contractual?

    If so, I guess I’m still confused. Wasn’t selling out a risk that you took when you agreed to a partnership track that didn’t contractually promise you anything prior to partnership? I mean, it sucks, but it was a risk you knew about and accepted, yes?

    (I’m not trying to stir the pot – I’m just genuinely confused why there seems to be some contention on this thread. Seems like you either agreed to some arrangement or you didn’t, no?)

    #226719 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    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.

    Click to expand…

    MPMD, I’m glad you added that second sentence.  (We wouldn’t hire you nor would you want to sign with us.)

    PP/SDGs involve an ownership mentality: even as a nonpartner with great salary/benies, I *absolutely* cared whether the practice was sold out from underneath me.

    OP, it’s pretty sound advice to wait a bit before making a decision.

    Click to expand…

    Of course I would care if a SDG I was part of was sold.

    The problem is that time and time again it appears that the people who control SDGs don’t care much about the associates and don’t practice ethical disclosure when buyouts are coming down the pipeline.

    How many times have we seen this post or heard about this?

    I have nothing against a buy-in period to be a partner in an SDG. 15 or 20 years ago it was clearly the norm and clearly worth it. Now what I’m worried about for my graduating residents is that the SDGs talk tons of smack on the CMGs, attract grads, and then sell out. A few senior folk walk away with FU money, the rest are left covering calls and worrying about their future.

    If one of my residents was joining your group would you provide them a written guarantee that the group would not be sold or that if it was they would get a reasonable cut? I’m sorry but this “ownership mentality” to me seems to be at best a double-edged sword and at worst a way to control early career docs.

    Click to expand…

    We’ve seen it a lot.

     

    #226720 Reply
    wonka31 wonka31 
    Participant
    Status: Physician
    Posts: 697
    Joined: 03/24/2018

    The terrible thing is, with the litany of these kinds of threads popping up, it could happen at the new place as well. Do we really want PE running healthcare? I feel like a bigger deal should be being made out of this. Bad for everyone, except the PE firms.

    Click to expand…

    Is PE worse than regular hospital admin?  It’s just one step in the process.  At some point, the pendulum will swing the other way.  I just don’t know if any physicians who have never owned their practices will want to take out the loans necessary to buy the practices back in 15 years.  Or at that point, if they will have been institutionalized.

     

    Click to expand…

    Maybe, maybe not. It just adds another layer of expense to our healthcare system. They may be able to optimize some things in order to cut costs, but my bet is it won’t even out. Private Equity is out to make investments in businesses that make money, that’s their job. There’s nothing wrong with that and clearly they see an opportunity to make money with a flurry of buyouts in certain fields. In a system that already serves many masters, I don’t know that this is good for the patient in the long run.

    #226721 Reply
    Avatar Throwaway1 
    Participant
    Status: Physician
    Posts: 5
    Joined: 06/29/2019

     

    Sorry the post was so confusing, octopus.

    I’m just venting my frustration, laying out my options and asking advice given that this was unexpected, ideally hoping for someone with experience who can weigh in

     

     

    #226723 Reply
    Liked by adventure
    Avatar marr65 
    Participant
    Status: Physician
    Posts: 20
    Joined: 08/12/2018

    OP, what you lost wasn’t yours to begin with. I empathize with you loosing that much money sucks, it feels bad but you will get over it. Like many suggested, take some time off to think clearly. I would start looking around and see what your wife wants as well. Maybe you will have to commute a bit longer or work from home. Look at  the positives in this situation, you now know who to trust and it’s way easier to say no to BS. You are an employee now, punch clock in and punch clock out. You don’t own a thing, that’s including the contract. Save your money, make a fat emergency fund, and send your resume to whomever you like. Just ask those group one question: how are you guys gonna screw me??

    #226724 Reply

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