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Single-specialty vs. multi-specialty group practice

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  • Single-specialty vs. multi-specialty group practice

    Weighing pros and cons of offers from a single-specialty and multi-specialty group practice

    Single-specialty:
    • Location: can rely upon public transportation
    • Compensation:
      • Lower base salary
      • wRVU threshold for bonus is a specified percentile of wRVU productivity of physicians in the practice
      • Lower RVU multiplier
    • Malpractice: claims-made; tail not covered
    • Opportunity to purchase equity after two years
    Multi-specialty:
    • Location: will need to purchase a car
    • Compensation:
      • Signing bonus (will likely go to purchase of car)
      • Higher base salary
      • wRVU threshold for bonus is a set wRVU target
      • Additional fixed bonus if exceeding a specified wRVU target
    • Malpractice: tail covered if claims-made
    How important is the opportunity to purchase equity in the single-specialty group practice? To what extent should that affect my final decision?

  • #2
    Higher base salary - not specific. How much higher? Can you give actual salary and signing bonus numbers

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    • #3
      Need some details but having equity in a practice is where the money is generally. No car???????

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      • #4
        Single-specialty group practice:
        • Base salary = 350K (updated)
        • wRVU threshold is 40th percentile of physicians in the group practice (currently~6,000 wRVU)
        • RVU multiplier = Medicare conversion factor ($34.89)

        Multispecialty group practice:
        • Signing bonus = 30K
        • Base salary = 350K in year 1, 365K in year 2
        • Bonus: $40 per wRVU 6,250-8,000 and $45 per wRVU 8,000+
        • Additional bonus of 50K in years 1 and 2 if exceeding 7,500 wRVU
        Last edited by AnonMD; 03-17-2021, 05:54 PM.

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        • #5
          Appreciate the input.

          Opportunity to purchase Class L equity in the company and Class O3 and/or P3 units in an affiliated organization.

          Correct, am able to survive relying upon public transportation.

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          • #6
            What’s your specialty? It matters when joining a multi-group.

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            • #7
              What's long term income based on senior partners? What's ancillary income from buying equity?

              Most private practice has low base salary compared to hospital employed, but long term term your income ceiling is higher due to ancillary opportunities.

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              • #8
                Originally posted by ACN View Post
                What's long term income based on senior partners? What's ancillary income from buying equity?

                Most private practice has low base salary compared to hospital employed, but long term term your income ceiling is higher due to ancillary opportunities.
                Agreed. You should be focusing on income in years 3-25, not years 1-2. Typically, it is best to have equity in a single-specialty group.

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                • #9
                  The senior partners each have annual productivity placing them in the 85-90th percentile of wRVU volume. There is the opportunity for significant ancillary income through pathology, pharmacy, etc.

                  The group was part of a recent private equity transaction with the “second bite” anticipated in approximately five years.

                  Long term this appears beneficial to the short term benefits of the multi-specialty group offer?

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                  • #10
                    Without knowing the full details, ownership is generally where the money's at. The highest paid physicians own a practice and can gain revenue streams from ancillary sources besides their own labor.

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                    • #11
                      We see this when recruiting docs to join us. They look at the starting salary vs what they can make working for a hospital owned practice. Yes, we start off much lower but our long term potential is much greater. I make 2-3 times more than their max salaries now. Its hard to see down the road but that is where I would focus my questions as well.

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                      • #12
                        Originally posted by AnonMD View Post

                        The group was part of a recent private equity transaction with the “second bite” anticipated in approximately five years.
                        What exactly was the recent private equity transaction? Did the senior partners make money selling to a PE firm and you might have to work to make money for that PE firm since they have paid out money and expect to see some returns on it.

                        Years ago a colleague joined a single specialty group and 1.5 years into the 2 year track for partnership the group sold to a hedge fund. The partners made millions. My colleague got $200K. Another 6 months and he would have been an equal partner getting a much bigger piece of the pie.

                        Make sure you are not used as a sacrificial lamb.

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                        • #13
                          Unless you live in NYC, you need a car. Especially if you have hospital calls, work late or the weather can turn nasty in a short time.

                          There is a difference between long and short commutes versus owning and not owning a car.

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                          • #14
                            Originally posted by Kamban View Post

                            What exactly was the recent private equity transaction? Did the senior partners make money selling to a PE firm and you might have to work to make money for that PE firm since they have paid out money and expect to see some returns on it.

                            Years ago a colleague joined a single specialty group and 1.5 years into the 2 year track for partnership the group sold to a hedge fund. The partners made millions. My colleague got $200K. Another 6 months and he would have been an equal partner getting a much bigger piece of the pie.

                            Make sure you are not used as a sacrificial lamb.
                            THIS.
                            Will you be an equal partner when you have "equity"? Will you be an equal partner before the buyout time? Will your vote count once you have equity? what is the buy in based on? etc etc etc- It can be an amazing opportunity or it can be them selling you snake oil. The details re: equity/partnership matter.

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                            • #15
                              Full stop. What are the details of this PE transaction and “second bite”?

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