Physician Partnerships: Potential Conflicts

It’s well understood that the healthcare industry is in the midst of substantial and dynamic change. One impact of that change is on the practice of individual physicians, who are entering into larger partnership groups or becoming employees of provider organizations.

Larger partnerships means more potential for disagreement, and doctors leaving groups to become employees means that partnerships are breaking up. Thus more need for efficient and effective means of resolving disputes arising from these trends, without litigation. And pre-existing agreements may not adequately address dispute resolution, because:

  • The partnership agreement fails to specify the rights and obligations of a physician upon departure or dissolution and does not prescribe a process for reaching those decisions
  • The partnership agreement is silent or unclear on the effect of the addition of new equity partners on the interests of the existing partners;
  • There is no formula or process for valuing the practice or a partner’s share if a partner requests to leave;
  • There is no process for dismissing a partner who has engaged in improper behavior or whose productivity is deficient;
  • Doctors sign an employment contract with a partnership with an option to become a partner, then an existing partner balks at consenting to the new doctor becoming partner;
  • There are unspecified continuing malpractice coverage issues in the event a partner leaves the group;
  • Unforeseen conflicts cause doctors to separate but no mechanism exists for allocating equipment, personnel, or patients;
  • What experts or consultants might be helpful and authorized to assist in addressing these issues.