How Practices Can Build the Right Physician Comp Models Today & Beyond

In this episode, host David Mandell welcomes back attorney Jason Greis for his third appearance. Jason, a healthcare business attorney with extensive experience advising physician practices, discusses one of the most pressing issues for independent groups today: physician compensation models and partnership structures. With generational shifts and economic realities reshaping the field, many practices are rethinking what it means to become a partner and how to fairly compensate both younger and senior physicians.

Jason explains how compensation models have evolved from the 1980s and 1990s to today. Younger physicians increasingly favor employment arrangements with health systems over partnership tracks, which creates challenges for groups that need to recruit. To compete, practices must clearly articulate the benefits of partnership—including higher long-term compensation, decision-making authority, and ancillary investment opportunities—while balancing the responsibilities and risks that come with ownership. He outlines the growing popularity of three-tiered structures (associate, non-equity partner, equity partner) as a way to create flexibility and manage risk tolerance.

The conversation also explores buy-in and buy-out models, the shift away from high dollar amounts, and the trend toward productivity-based (“eat what you kill”) compensation rather than common pot models. Jason highlights potential red flags, including outdated “founder’s models” that rely on new doctors funding senior physicians’ retirements, which often result in disputes. He emphasizes the need for practices to proactively revisit their structures—ideally years in advance of retirements or potential sales—to remain competitive, avoid pitfalls, and position themselves for long-term success.

INSIGHTS:

• Younger physicians often prefer employment stability over traditional partnership, creating recruitment challenges for practices.
• A clear ‘compensation ladder’ helps demonstrate how pay and benefits grow with responsibility.
• Three-tier structures (associate → non-equity partner → equity partner) are increasingly common in medical practices.
• Large dollar buy-ins and buy-outs have fallen out of favor due to debt burdens and changing economics.
• Sweat equity and reduced comp over initial partner years can substitute for cash buy-ins.
• Practices should periodically benchmark their models against the local market to stay competitive.
• Productivity-based models (‘eat what you kill’) are replacing common pot models to reduce resentment among high producers.
• Ancillary investments (surgery centers, dialysis, labs) can be powerful recruitment and retention incentives.
• Founder’s models and heavy buy-ins create litigation risks and unmet expectations, and are largely outdated.
• The best time to revisit comp models and structures is well before major transitions—2+ years for retirements, 5 years for sales.

LINKS & BIOS:

• Guest, Jason Greis | Bio
• Host, David B. Mandell | Bio