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BLOG: How to keep doctor workload, compensation and other squabbles from killing your group practice, part 1
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There are myriad partner issues to resolve in any group ophthalmology practice, such as compensation, minimum workloads and staff sharing. Most of these are nailed down at least generally in the written shareholder or partner agreements that everyone signs when they become an owner in a group practice. However, just months after the contract ink has dried, it’s typical for questions and arguments to erupt.
It’s unlikely that every contingency will be covered in your original documents, and it’s incumbent on every large practice administrator to secure a periodic legal audit to make sure the old contracts are still suitable to changing times and circumstances.
Partner issues most often break out because of just one disaffected or misbehaving partner, or a small, like-thinking cluster of individuals in a large practice. Starting with the first of four installments of this blog set, we’ll unpack some of the most common issues I see bubbling to the surface as I make my rounds of the country each year. Even in the strongest and most jovial settings, it’s common for one or more of these issues to fester.
How much of the practice should we each own?
There is no one formula for success. There are happy, stable practices that split the pie up evenly and equally happy practices with one majority owner and several junior partners. The argument for equality is more often about feelings than finances. It just somehow seems more fair. Many doctors say, “We’re all peers. We’re all equals. Let’s all own the practice equally and balance out our different economic values in the compensation formula.” With every passing year of field work, I must admit that the argument for equality is weighing stronger in my mind. I’ve observed that practices with equality of ownership are marginally more tranquil than practices with differential shares or both junior and senior owners.
However, in some settings (because of wide differences in productivity or the wariness of a founding partner) it can make sense to apportion ownership to each doctor’s individual productivity. After all, the logic goes, the doctor who is generating the most work, and in most circumstances is paying for the most overhead, should have a proportionately louder voice in the board room.
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams and a new book, Simple: The Inner Game of Ophthalmic Practice Success. He can be reached at pintoinc@aol.com; website: www.pintoinc.com.