Educational only. This is not legal, tax, or financial advice. Tax rules, contribution limits, state laws, and regulatory guidance change frequently. Consult your CPA, attorney, or financial advisor before acting on anything below. Last reviewed dates are shown at the bottom of each guide — numbers may be outdated.
When a group offers you partnership after a 2-4 year track, you are being asked to write a check (or defer comp) for a share of a business. Most radiologists have never been taught how to evaluate the business — here is the framework.
What you are actually buying
Partnership usually bundles several distinct assets, not always disclosed separately:
- Share of practice profit (distributions)
- Share of the practice corporate entity (equity — rarely tradable, but governs voting and exit)
- Share of real estate / imaging-center LLC (separately owned by some partners, not others)
- Share of ancillary revenue (imaging centers, residency moonlighting contracts, joint ventures)
Ask up front: what exactly am I buying a share of? Some groups have layered structures where new partners buy into the corp but not the real estate, which means older partners continue collecting rent on facilities that new partners keep filled.
The five numbers to know
1. Gross professional revenue per FTE
Billings or collections divided by full-time-equivalent radiologists. A reasonable benchmark: $800k-$1.4M per FTE in most markets. Below $700k without a specific reason (heavy academic, training-heavy) is concerning.
2. Owner compensation as a percentage of revenue
How much of the top line flows to partner salaries and distributions? Imaging groups typically land 55-75% in high-efficiency practices. Below 50% suggests either overhead bloat, ambitious ancillary investment, or hidden perks loading the expense side.
3. RVU rate per partner
Dollars per work-RVU after all overhead. This normalizes across volume. Compare to MGMA medians for your region and subspecialty. A radiologist generating $50/wRVU in a group paying $28/wRVU is subsidizing someone — partners, the practice, or admin overhead.
4. Capital assets vs fee-for-service revenue
Does the group own equipment, real estate, or technical ancillaries (MRI, CT centers)? Ancillary revenue is higher-margin but also more capital-intensive and regulatory-heavy (Stark, anti-kickback). A group with heavy ancillary revenue may have bigger upside but also more liability exposure.
5. Distribution variability
Ask for partner distributions across the last 5 years. Stable-with-growth is ideal. Wild swings can mean poor management, key-payer contract risk, or lumpy ancillary cash flow. Flat-to-declining is worse — it suggests the market is eating your group's economics.
Buy-in mechanics — how the money moves
Common structures:
- Cash buy-in: you write a check on partnership day. Clean, transparent, often tax-advantaged (sometimes structured to be deductible as business expense depending on character).
- Deferred compensation buy-in: your pay is reduced for 3-5 post-partnership years; the "missing" comp is your buy-in. Most common in private practice.
- Earn-out: you forgo a fraction of your productivity credit for a defined period.
- Hybrid: cash portion plus deferred comp. Increasingly common.
A "fair" buy-in is typically 0.5-1.5x annual partner distributions — so if partners make $600k/year on average, buy-in of $300k-900k is normal. Above 2x annual distributions, ask hard questions about what future cash flow justifies the multiple.
Red flags in group financials
- The group refuses to provide multi-year P&L, claiming it is "too complicated"
- Partners-only real estate LLC that new partners cannot buy into
- Heavy owner perks (leased cars, country club dues, spousal salaries) loaded into expenses — these reduce visible profit and also depress the base on which your buy-in is calculated (in your favor short-term, but signal governance issues)
- A single contract provides more than 40% of revenue (payer concentration risk)
- No written partnership agreement, or a one-page summary in lieu of one
- Succession plan for departing senior partners is vague — they can leave and you may be stuck covering their draw for years
- Tail-coverage obligations for departing partners are paid from group funds without reimbursement
Questions to ask in the partnership interview
- May I see last 3 years of audited (or CPA-compiled) financials?
- What is the partnership agreement language on: buy-out on death, disability, termination, voluntary exit?
- What is the historical range of partner distributions for each of the last 5 years?
- How is production credit allocated? Pure RVU, weighted, flat?
- What non-cash perks are run through the P&L?
- When did the last partner leave, and under what terms?
How to verify claims
- Ask for the group's CPA-compiled or audited financial statement. Internal-only spreadsheets are fine for context but do not replace third-party verification.
- Talk to the most recently-minted partner and the most recently-departed one (if reachable). They will tell you different things.
- Have a healthcare attorney review the partnership agreement. $1-3k for an attorney who knows physician practices is cheap insurance.
When walking away is the right answer
- The group will not produce prior-year financials
- Buy-in is more than 2x annual distributions with no clear justification
- Non-compete is 3+ years with broad geographic scope
- Succession mechanics for departing senior partners have no hard caps
- The existing partners seem unable to articulate their own distribution history
Last reviewed: 2026-04. Every group's structure is unique — always engage a healthcare attorney and CPA before signing a partnership agreement.