Now that you are beginning to search for employment opportunities or have plans to start in a few years, you may hear a bit about the employee and partnership track salary for radiologists. Also, you probably have learned that new radiologists on the partnership track earn significantly less. Since you were hoping to become a partner in a practice, are you getting sticker shock about the lower partnership track salary offers? And, why do stark salary differences exist between a partnership track position and an employee anyway? Moreover, what are the pros and cons of taking on this lower starting salary? To answer these questions, we will examine the most critical reasons why starting salary offers differ dramatically. Then we will discuss the risks you take when starting with this lower partnership track salary.
Why The Differences In Salary Offers?
Increased Partnership Income
After all these years, you’ve probably heard the adage: you never get something for nothing. In this case, this aphorism holds. Those who take on a lower starting salary get more significant rewards in the end. When you start on a partnership track, you sacrifice your current income for future increased income. So, that makes a bit of sense.
Buy-ins And Buy-outs
When you start as a partner in private practice, it’s only fair to put some of your money toward buying a share of the practice’s assets. These assets may be accounts receivable, buildings, equipment, and more. No one is going to give that away. So, here is where the buy-in comes to play. Usually, practices will deduct some of this amount from your initial salary during your partnership track to pay for it. We know this amount as “sweat equity,” or the work/money you must put into the imaging business to share in ownership.
Bigger Benefits
Hey buddy, it’s not just about the salary. The fringe benefits of partnership often make a more considerable difference in your lifestyle. In the case of many partnerships, partners get larger pensions, increased malpractice insurance, more extensive life and disability insurance policies, tax-free car write-offs, cell phone and internet usage deductions, and more. These perks can add up over time. So, practices tend to compensate for these more considerable benefits by issuing a lower salary on a partnership track.
Increased Control
Nowadays, it is next to impossible to control almost anything fully in healthcare. However, entering into a partnership allows you to manage your destiny more than working as an employee for a practice. No doubt, the increased control you will eventually obtain from completing a partnership track factors into those first few years of partnership.
What Are You Risking For All Of This?
The Chance You Will Never Make Partner
You take a leap of faith when you begin on a partnership track. Rightfully so, you assume that you will be able to meet the requirements of the practice and eventually become an equal shareholder. But what happens if this is not the case? Well, that can be undoubtedly devastating. You will lose out on years of potentially higher income that you would have made elsewhere. So, you are looking at potentially significant risk when starting a partnership track.
Company Buyout
More commonly than ever, large corporate conglomerates and massive practices buy out smaller “Mom and Pop” firms or even mid-size practices. Let’s say you happen to be on a partnership track at the time of one of these buyouts. In this case, you will have no guarantee that the new owners will add you to the partnership track, issue you any significant benefits, or even compensate you appropriately when the buyout ensues. All your hard work and lower initial starting salary proverbially can be down the drain.
Partnership Will Not Be The Same
You go onto different forums (check out Aunt Minnie!), and you will find many threads on this topic. Let’s say everything goes great, and you eventually become a partner in a practice. Who is to say that the results will pan out? Sometimes, but not often, private partnership salaries can be lower than the salaries that their employees enjoy. Especially for practices that are not well run. Or, maybe, reimbursements for procedures will take a nosedive when you are working on a partnership track. Who knows if the benefits will remain 5 or 10 years down the road?
My Bottom Line
You probably understand why practices issue lower salary offers to employees on the partnership track than their employed colleagues at this point. You are receiving the potential for real future benefits.
At the same time, however, working on a partnership track involves taking significant risks. What you choose in the end will probably pan out. But, it certainly does not always work out. Therefore, before starting any job, you must do your due diligence and determine if a partnership track or employed position works well for you. Good luck with your search!
