Medical Practice Management
Sep 17

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 Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →