Questions to AskIf you are considering a partnership with a DSO or DPO, here are some questions you should consider: 1. Is my practice too large (or valuable) to sell to another doctor?Once practices exceed $1.5 Million in revenue, they become much harder to sell to another doctor so selling (or partnering) with a group makes more sense the larger the practice gets. 2. Am I on track to achieve my retirement ne$t egg?Only you can answer this question, but the potential to generate a larger retirement fund normally increases quite a bit in a group model. 3. Does my associate doctor want equity (if applicable)?If you have an associate doctor, are you willing to sell them equity? If not, will they leave? In many group models there are options for associate doctors to gain ownership over time. 4. How much longer do I want to work full-time? Part-time?You will want to understand what the minimum employment term is with the group you are considering, and if it aligns with your timelines. You should also ask if it is possible to continue on a part-time basis at some point, and how that impacts your ability to retain your stock. 5. How burned out am I with non-clinical headaches (HR, staffing, IT, marketing, payroll, purchasing, paying bills, etc.)?One of the big benefits of joining a group is the ability to offload many of the non-clinical areas of responsibility that are typically tied to owning a private practice. If you are pretty burned out on practice management, joining a group could be just the thing to get your life back in balance. 6. What is my plan to deal with increasing costs and competition?It is no secret that groups have a significant advantage over private practice when it comes to volume negotiating power. Groups often access much larger pricing discounts for equipment, labs, and supplies than private practices. 7. Under what conditions can my stock get clawed back when I want to ramp down or retire?Most groups will have a range of conditions that must be satisfied in order to cash out the full value of your shares when you retire. You will want to clearly understand these items prior to joining any group. 8. If the group is backed by investors, how much longer do they plan to stay involved before selling?Generally, when controlling ownership changes hands with different investors, there is a potential for a significant shakeup in how things are done. You will want to ask the executive team, or members of the current Board what they can do to make sure things do not change for the worse if new investors take over. 9. Do I want to be part of a larger team with more resources, or maintain the status quo?Sometimes it can be a huge blessing to join a group and get access to all that extra help and support. Or it can be a frustrating experience if their support team is not experienced or organized. It is a good idea to ask about the experience level of the various team members who support the practices. 10. If I partner with this group, do their values align with mine?This is really important. If you value your autonomy, and ability to make decisions related to clinical and staffing, then you should ask a lot of questions around how decisions get made on a wide range of routine topics. 11. Who else has partnered with or endorsed this group?Has the group been endorsed by any noteworthy organizations, and KOL doctors? This can provide some insight into their values and priorities. 12. What other options do I have, and how do they compare to this?You can always remain in private practice and never join a group. There is nothing wrong with this decision. Or you may be entertaining offers from multiple groups. Generally, there is more financial upside potential and practice support in a group, but there will be some level of assimilation with how they do things. You just need to weigh the pros and cons. Perhaps making a list will help you decide which way to go. |
