For one orthopedic group, the warning signs that something was wrong with their physician recruiting process didn't show up in compensation benchmarks, payer mix, or productivity data. They showed up after the offer letter.
The practice had interviewed nearly a dozen orthopedic surgeons and advanced more than two dozen candidates through their recruitment process.
“We were able to get most of those physicians to the offer phase,” said Tara Ossek, Senior Vice President of Recruiting at Jackson Physician Search. “But we just kept losing the deal … sometimes at the 11th hour, very unexpectedly.”
What they learned was that compensation wasn't driving candidates away. It was the disconnect between the pitch and the paperwork.
“What was being discussed and promised in the interview experience was not translated that way when it got to the contract,” Ossek said. “The language … read with a lot of risk to that candidate. And that's where we kept losing the game.”
That disconnect between what practices think they are offering and what physician candidates believe they are walking into is becoming one of the defining operational challenges for independent physician groups.
On a recent episode of the MGMA Insights Podcast, host Daniel Williams spoke with Ossek and Matt Phillips, Managing Director at City Capital Advisors, about how physician partnership models are evolving under pressure from generational turnover, financial strain, recruitment competition, and increased demands around work-life balance and ownership.
Their message was direct: Private practices can no longer treat partnership as a vague future promise. Candidates want specifics, practices need succession strategies, and ownership structures built 20 years ago may now be undermining recruitment and long-term viability.
Physician candidates are evaluating ownership like a business decision
For years, many physician groups marketed partnership with broad language about autonomy, culture, and eventual ownership. But this approach is losing traction with younger physicians entering the workforce carrying significant debt and different expectations about work.
“Most early career physicians are finishing training carrying major, major debt,” Ossek said. “We’re talking $250,000 to $500,000 — sometimes more.”
That financial reality is reshaping how physicians evaluate opportunities. According to Ossek, candidates are asking more operational and financial questions earlier in the process.
“What these early career physicians are focused on is, 'Will I have stable income? Will my schedule make sense? And can I actually have a life outside of work?'” she said. “That last one is not a 'nice to have' anymore — the work-life balance piece for this generation is an absolute deal breaker.”
Importantly, Ossek said younger physicians are not rejecting ownership outright. They're just scrutinizing it more carefully. The traditional “buy-in, eat-what-you-kill pitch,” as she described it, no longer answers the questions candidates actually care about. Instead, physicians want specifics around ownership expectations, financial and administrative burden, partnership timelines, and exit scenarios.
“They’re approaching it in the way that you would evaluate any major business decision,” Ossek said.
Many practices wait until succession becomes a crisis
While younger physicians are approaching ownership more strategically, many practices are still operating within structures designed for a different era. Phillips said physician groups frequently delay ownership discussions until looming retirements force the issue.
“What I tend to see is as practices age, oftentimes they’re less proactive about recruiting,” Phillips said. “They tend to rely heavily on the senior doctors, the established doctors.”
The problem becomes acute when senior physicians begin planning exits without a succession plan in place.
“You have a lot of senior physicians who are now approaching retirement,” Phillips said. “A lot of practices haven’t been as proactive in terms of bringing on young doctors to ease that transition.”
That hurdle is compounded by mounting operational complexity.
“It’s challenging to operate a private practice and do it successfully and profitably today,” Phillips said. “Everything is getting more complicated.”
Ownership conversations often begin under pressure instead of as part of long-term planning. According to Phillips, practices frequently realize too late that their existing structure no longer aligns with current operational realities or recruitment needs.
“Practices are never starting with a blank slate,” he said. “There is a legacy ownership model in place that may have outgrown itself.”
Ambiguity is hurting recruitment
One of the clearest themes from the discussion was that physician candidates now expect specificity — and quickly lose confidence when practices cannot provide it. Ossek said one of the most common mistakes she sees is reliance on broad, undefined language.
“We tend to hear practices say, ‘We have a great partnership track,’” she said. “That's not a value proposition. It's a placeholder.”
Candidates increasingly interpret ambiguity as a warning sign.
“If they aren’t hearing that followed up with specifics, they’re just going to make the assumption that there aren’t any,” Ossek said.
Deferring the conversation can be equally damaging. Practices sometimes attempt to postpone ownership discussions until late-stage negotiations or after a physician joins the group.
“Whatever the intent is, the reality is it doesn’t create intrigue,” she said. “It creates doubt.”
Another common pitfall is leaning too heavily on cultural messaging instead of operational clarity.
“We’re like a family here,” Ossek said, paraphrasing a phrase candidates often hear during recruitment. “Culture absolutely matters … but it doesn’t answer the real questions that candidates are seeking.”
Her summary was concise: “Warmth is what builds connection. Clarity is what builds trust.”
Ownership models are becoming more customizable
According to Phillips, one reason practices struggle with these conversations is that ownership structures themselves have evolved significantly. Traditionally, physician groups followed a fairly standardized pathway: several years as an employed physician, followed by a modest buy-in and eventual partnership distributions. Today, practices have more flexibility — as well as more strategic decisions to make.
Some groups are creating structures that allow physicians to invest in specific ancillary services rather than the entire practice. Others are using LLC and MSO structures to customize risk exposure and financial participation.
“Today there’s a lot more flexibility,” Phillips said.
That flexibility introduces tension between competing priorities.
“You can’t maximize the proceeds for your retiring doctors while also making the buy-in affordable to your younger physicians, while also ensuring that you’re plowing back appropriate amounts of the practice profits into investing for growth,” he said.
Ownership strategy can no longer operate separately from broader operational planning. “At bottom, your choice of ownership model is a strategic practice decision,” Phillips said. “It has to be aligned with the goals and objectives of the practice itself.”
The interview process itself may need redesigning
Ossek argued that many practices are still conducting interviews as if recruiting conditions have not changed. “A lot of practices are still asking very surface-level questions and accepting surface-level answers,” she said.
Instead, she encourages groups to have direct conversations about ownership expectations early.
“How are you thinking about the financial trade-offs of ownership?” is one example she recommends asking candidates. Another: “How do you feel about income variability that’s tied to practice performance?”
Those discussions can reveal alignment issues before contracts are drafted.
“They’re not meant to be trick questions,” Ossek said. “They’re real conversations.”
She also urged practices to proactively document answers to common ownership questions in writing. That includes details about buy-in calculations, partnership timelines, governance expectations, and exit scenarios.
“It sounds really simple, and it is,” Ossek said. “But most practices do not have it.”
When groups provide those materials upfront, she said, they immediately distinguish themselves in a competitive recruiting environment.
“You can send a really powerful message that we have anticipated your questions, we’re transparent, and we’re not going to make you pull this out of us,” Ossek said.
Succession planning is now a recruitment strategy
Both guests repeatedly returned to one operational reality: Succession planning and recruitment strategy are now deeply interconnected.
“The structures that were built for one generation aren’t necessarily designed to attract and retain the next one,” Ossek said. “The practices we see that are getting ahead of that conversation early are in a fundamentally stronger place."
Phillips framed the first step more simply: "The biggest thing,” he said, “is just taking that first step and realizing, ‘Hey, we need to re-examine our ownership model because it doesn’t seem to be working for us.’”
For independent practices, the question is no longer when to revisit physician partnership models, but whether they can afford to wait until recruitment and succession problems force the conversation.
Resources:
- Connect with Tara on LinkedIn
- Connect with Matt on LinkedIn
- Jackson Physician Search
- City Capital Advisors
- MGMA Conferences
- MGMA DataDive
- MGMA Podcasts
- "The significance of the partnership agreement in private practice and trends in medical practice ownership" (MGMA Insights Article)
Email us at dwilliams@mgma.com if you would like to appear on an episode. If you have a question about your practice that you would like us to answer, send an email to advisor@mgma.com. Subscribe to the MGMA Podcast Network wherever you get your podcasts.
