Thoughts about this job offer?

[nets445]

Interviewed at a private practice recently. Really like the place and people/culture. Heard good things about the place from some other oncologists who never worked there but know some of the docs who work there currently. Just throwing this out there to see if you all think it's a good opportunity:

- Private practice, 100% physician owned (not like AON or US Onc models)
- Northeast small-ish town of 50k people but I would live in a highly desirable suburban metro and commute approximately 40 minutes each way. This practice is the only player in town and has monopoly over the market.
- Very well established practice, 3-years to partnership. Nobody has ever been denied partner. Once partner, everything is equal in terms of # patients/day and pay/call.
- Around 20 patients/day, 5 days/week
- Call 1:9, cover 1 local hospital 5 minute drive down the street. When on call, you do not have clinic.
- 5 weeks vacation/year prior to partner; 8 weeks vacation once partner
- Initial compensation prior to partner (400k - 410k - 420k)
- Partner salary not disclosed, but likely at least double the above as the practice owns their own infusion, lab, real estate; they do not have their own radiation oncology though.

I really like this place. I am going to interview at another private practice in a slightly more desirable area that would cut my commute down to around 25 minutes each way but I'm basically 99% set on accepting the above offer. Thoughts? Anything here that looks too good to be true?

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[bobow98]

If you're ok with 5 days a week, 100 pts a week, it seems like a somewhat reasonable path to become a physician owner in the practice.
You lost me at 5 days of clinic a week though.

You'll be paying lots of sweat equity over year 2 and 3. Year 1 will be steady ramp up I assume.

 

[HemeOncHopeful19]

What is their reason for not disclosing partner salary?

 

[nets445]

What is their reason for not disclosing partner salary?

Too variable given year-to-year economics. A little sus but I figured it must be really high if they own everything and seeing 20/day 5 days per week.

 

[HemeOncHopeful19]

Too variable given year-to-year economics. A little sus but I figured it must be really high if they own everything and seeing 20/day 5 days per week.

Disclaimer: I’m a 3rd year fellow not some seasoned Oncology business guru

A few red flags to consider

1) If this is a single office practice with a “monopoly” over 50k patients AND they are profitable I assure you they are approached for a buyout on the regular - how old are most of the partners?

2) Reimbursement for small practices is getting worse by the year so it is possible they’ve been doing worse each year and that’s why they call it “variable”

If you like the second practice too I might ask to see the books and offer to sign an NDA with the knowledge that this may piss them off but if they blow you off over it then you might’ve dodged a bullet

 

[nets445]

Disclaimer: I’m a 3rd year fellow not some seasoned Oncology business guru

A few red flags to consider

1) If this is a single office practice with a “monopoly” over 50k patients AND they are profitable I assure you they are approached for a buyout on the regular - how old are most of the partners?

2) Reimbursement for small practices is getting worse by the year so it is possible they’ve been doing worse each year and that’s why they call it “variable”

If you like the second practice too I might ask to see the books and offer to sign an NDA with the knowledge that this may piss them off but if they blow you off over it then you might’ve dodged a bullet

Great points here.

1. I did ask them about this and they were very open about it. The practice has been around for 50 years, and they said for the last two decades, the local hospital system has asked every year to buy them out. They tell me they have no intention of selling and that if they did intend to sell, they would've sold during one of the down years in the past 2 decades. They say the practice is growing, hence the need for another oncologist, and that they are too deeply rooted into the community and almost impossible for the local hospital system to create their own oncology team or forseeing the practice needing a management partner such as AON or US onc. Now there's no way for me to verify all of this but there are some hints that they are not likely to sell: 2 recent partners retired in last 2 years. They could have sold out at that time but it didn't happen. The practice actually hired the daughter of one of the retiring oncologists. If this private practice was going through deep financial trouble (which the retiring onc should have the best grasp/understanding of), I don't think he would have let his daughter, who is fresh out of fellowship, join this practice. Also, there's only 2, maybe 3, docs who are close to retirement age (50s-60). The remaining 5 are all 30s and 40s.

2. This is what's concerning for all practices. Do you know if the AON or US Onc backed practices have this issue? Or are they able to negotiate for more favorable pricing on chemo? However, I have heard that these management companies can sometimes take up to a 40% cut of the profits. Perhaps @gutonc can weigh in. As far as I know, drug margin is still the main player in terms of oncologist salary in private practice. This particular practice is also looking into other revenue streams, such as opening more clinical trials and value based care, which I don't know much of but they said it is profitable.

 

[gutonc]

The fact that they won't disclose the median partner salary is definitely suspect. They can easily do the math and give you the last X years (5 would be a good number) as a starting point. Somebody is definitely making bank of the new kids though because at the rate my new job pays, that workload you're looking at (which is way too much and not something I'd be interested in doing) would pay me $900K starting in year one. So if they're going to pay you less than half of that for 3 years, the partner comp better be in the 7 figures.

As to the drug cost/reimbursement issue, nobody really knows how it's going to shake out in the future. Being part of a GPO or having access to 340B pricing makes this much more profitable. I assume this group is making money on drugs, or they'd stop doing it. How much, and what that looks like in the future is a question you'd have to ask them.

 

[onchopeful1]

Another example:

Midwest (so obviously different than a northeast town)
500k with 100/RVU above 5000. Seeing avg 15-20 pts/day 4.5 days. If I wanted to work more, I’m sure I could.

But based on your numbers, my community employed position, would yield 940k.

 

[MD46]

Great points here.

1. I did ask them about this and they were very open about it. The practice has been around for 50 years, and they said for the last two decades, the local hospital system has asked every year to buy them out. They tell me they have no intention of selling and that if they did intend to sell, they would've sold during one of the down years in the past 2 decades. They say the practice is growing, hence the need for another oncologist, and that they are too deeply rooted into the community and almost impossible for the local hospital system to create their own oncology team or forseeing the practice needing a management partner such as AON or US onc. Now there's no way for me to verify all of this but there are some hints that they are not likely to sell: 2 recent partners retired in last 2 years. They could have sold out at that time but it didn't happen. The practice actually hired the daughter of one of the retiring oncologists. If this private practice was going through deep financial trouble (which the retiring onc should have the best grasp/understanding of), I don't think he would have let his daughter, who is fresh out of fellowship, join this practice. Also, there's only 2, maybe 3, docs who are close to retirement age (50s-60). The remaining 5 are all 30s and 40s.

2. This is what's concerning for all practices. Do you know if the AON or US Onc backed practices have this issue? Or are they able to negotiate for more favorable pricing on chemo? However, I have heard that these management companies can sometimes take up to a 40% cut of the profits. Perhaps @gutonc can weigh in. As far as I know, drug margin is still the main player in terms of oncologist salary in private practice. This particular practice is also looking into other revenue streams, such as opening more clinical trials and value based care, which I don't know much of but they said it is profitable.

Sounds exactly like the place i interviewed in DMV, PA area. I know the exact practice actually, area starts with a “y”

Inside story is that they have offers from two large systems in state nearby and they are beefing up their practice to sell at some point. They use the new revised OCM model.

Not everyone has made partner and some have left in my understanding. Obviously they leave these details out.

You can message me to ask details if you like.
They dont disclose partner salaries and say above 1 mil but cant show anything for it.