Reduce pay-outs when several physician members depart

You may be able to afford generous monthly goodwill pay-outs if one member dies, retires, or withdraws. But what if a second and even a third partner leaves shortly thereafter? To protect the group, consider a provision reducing the pay-out by one-third if there are two concurrent absences and perhaps by half (or even more) in case three or more doctors leave.

Consider extending the payment period if this reduction comes into play. After all, it’s probably not the first departed partner’s fault that another member dies, becomes disabled, or quits. Consider continuing the payments for an extra month for each month they are reduced, but not longer than it takes to end up with the same total pay-out amount.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.