Thursday the 18th was Match day and my son and his fianc will spend the next 4 to 6 years of their lives at Strong Memorial in Rochester (Couples match). The institution’s reputation for emphasizing teaching rather than a focusing on low wage medical labor was very appealing to these new grads. They are even considering buying a house in the adjacent “white coat ghetto.”Both are very happy from a personal and professional perspective.However I can’t help but to think about the peripatetic journey that their lives might follow given the opportunities and challenges that will arise from the collision of the art, science, and business of medicine. Residency and fellowship will be a blur necessitating another round of life decisions in just a few short years.Thus this blog.
I have been working with hospitals, cancer centers, and physicians for nearly 30 years on an interesting variety of projects and endeavors. If I’ve learned anything, it is that all health care is local. In recent years I have been attempting to help physicians navigate the pitfalls that can occur around practice partnership. Most of the practice of oncology is basically structured as a cottage industry. That is to say the majority of private practices in the US are 5 to 7 MD FTEs in size. Clearly the trend is toward larger single specialty groups, increasing interest in multispecialty groups, growth in staff model community hospital as well as development of corporate models such as USOncology. But the majority of the approximately 6500 on oncologists in private practice are essentially in small simply structured groups.
The glue that holds these practices together is reflected in the stakeholder agreements that outline critical issues of ownership, governance, and compensation for partners and physician employees. These provisions importantly spell out such issues as the path to partnership, salaried physician, buy-in, buy-outs, pay-outs, stock purchase, other liabilities, other potential investment vehicles, and retirement. Unfortunately while all of these are interrelated they are often addressed on an ad hoc basis over time from band aid to band aid. Failure to truly and fully address these critical issues is akin to treating a low grade lymphoma -– they will always come back. More often than not, failure to approach these covenants in the context of a grand unifying perspective results in unexpected financial liabilities, personal and professional tension, failure to recruit and retain new partners, and increasingly-- practice fragmentation, dissolution, and/or forced bankruptcy. Importantly, incidence and prevalence of certain partnership structures and functions do not necessarily represent what is best for the long term viability of the practice or for the best interests for the individual partner. Lastly it is not necessarily greed, ego, or other nefarious motivation that produces these situations but often is the result of ignorance, inappropriate borrowing from other professional fields, and/or need for simplicity.
So in coming weeks I will seek to stimulate discussion around these and other important topics surrounding the practice of oncology medicine. But let me leave you today with this 2-part question that I always pose to partners and those fellows seeking partnership: “How do you retire and how do I retire?” Sometimes the answer is revealing if not ugly. Let me know what you think.