Partnerships between physicians provide a way for doctors to offer the best services to their patients under more favorable financial and business conditions. Yet the formation of such ventures must be undertaken with care in order to avoid physicians partnership issues that could later cause problems. Creating partnerships or merging practices requires careful planning as well as the guidance of experienced health law attorneys.
Seeing Both Sides Of A Medical Partnership
Like most other businesses, the formation of a medical partnership and often the merging of practices can be exciting for physicians who want to improve their services yet save on operating expenses. Shared practices are a great way to split the costs of staff, equipment, and office space. Partnerships may also provide a physician with an opportunity to exert more authority, improve his or her financial position, and provide for improved services.
Unfortunately, while most professionals see the upside of forming these alliances, they may not understand or appreciate the potential downside that could result in disagreements and legal concerns. Whether there is some type of conflict, or even a need to dissolve an agreement, this is when many physicians discover that they did not plan well enough for a new medical affiliation.
It is critical to have steps already in place to effectively deal with any of these kinds of issues before there is any damage to the business. Problems can be easily avoided or resolved when physicians enlist the assistance of qualified health law attorneys to create an effective and complete business plan.
Forming Medical Partnerships
Any business partnership being formed with medical practitioners needs a well-written agreement to prevent unnecessary physicians partnership issues. Some of the critical topics that should be addressed in the agreement include:
Addition or Removal of Equity Partners - Will the group add more partners? If so, how will these individuals be added to the agreement and what affect will this have on company shares? This is also true of partners who decide to leave the practice.
Staff, Equipment, and Facility Sharing - Distribution of staff, physical space, and any equipment used in the practice must be documented to avoid disputes between associates or their staff.
Method of Conflict Resolution - Conflicts can arise in a partnership ranging from differing opinions or adding more partners to the ways the business should be maintained and expanded. Health law attorneys stress the importance of documenting a procedure for handling these conflicts to avoid escalation to the point of a costly litigation resolution.
Removal of Partners - Physicians partnership issues concerning the removal of a partner due to conduct or competency concerns must also be carefully planned. Failure to remove such individuals could cost the business in liability claims. Therefore, this possibility must be considered in advance and agreed to by all involved parties.
Valuation of the Practice - There must also be an agreed method of determining the value of the practice should a partner want to sell their share of the business. This method must consider equipment and accounts receivable as well as earning potential, a very challenging aspect to assess.
Changes to Existing Agreement - It is essential to have a directive in place for the possibility that the existing group may wish to merge with another medical practice or group.
Dissolution of the Agreement - There should be a plan in place for dissolution of the partnership in the form of a detailed Buy/Sell agreement. Such an understanding should conceivably address any potential reasons why a partner might leave the group or why the group might be dissolved.
Medical partnerships can be a lucrative option for many practitioners provided they create a viable business plan ahead of time. To avoid, or at least reduce, the many physicians partnership issues that can arise in these circumstances, medical professionals who are considering creating or entering into a partnership or who are thinking about merging their medical practices should seek the guidance of experienced health law attorneys. With the right agreements in place, partners will be prepared to handle any issue that arises in a preferred and beneficial way.
The Stevenson Law Firm, PC
6302 W. Broadway, Suite 120
Pearland, TX 77581
Phone: (832) 481-4548