What physicians should know about buy-in agreements

Buy-in agreements determine a physician's compensation, ownership stake, management responsibilities and more. Here's what physicians should know, according to a May 4 Medical Economics article.

The more practices acquired by hospitals and healthcare systems, the less value the remaining ones have, Patrick Formato, a healthcare attorney in Lake Success, N.Y., told Medical Economics.

Mr. Formato said this means buy-ins are less expensive than they used to be. Once a practice is acquired, the employment and buy-in agreements become voided and replaced by employment agreements with the new owners, Mr. Formato told Medical Economics.

Daniel Bernick, an attorney with the Health Care Group, a Pennsylvania firm, told Medical Economics that there are three ways to determine a practice's value:

1. Base the practice's value on the recent sales of similar practices nearby.

2. Examine the practice's profitability.

3. Assess a practice's assets, including equipment, real estate and more.

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