Why Medical Practice Mergers, Physician Partnerships Fall Apart

June 18, 2014

A great partnership between physician practices can quickly fall apart if productive relationships are not maintained and nurtured.

Physicians are notorious for being disappointed by their partnerships and mergers.  The new or merged entity breaks apart, becomes a battleground, or devolves into an unpleasant truce. Even initially fruitful partnerships can become contentious over time. 

The phenomenon is too common to result from simple bad luck.  At the same time, long-tenured harmonious groups make it clear that successful alliance is possible, albeit rare.

At least one secret of the successful groups is sustained relationships between and among the physicians.  Either by design or great good fortune, the groups manage to maintain the essential elements of every productive relationship:  mutual respect and common purpose.

For the sake of simplicity, I will present an illustration involving only two physicians:  Partner A and Partner B.  The logic extends to larger groups.  Things just get much more complicated.

Partner A and Partner B decide to form a partnership because the economics of sharing staff and expenses make sense (common purpose) and because each believes the other to be a competent, caring physician (mutual respect).  So far, so good.

At some point in time, Partner A observes that Partner B seems to be casual about completing paperwork.  He gets it done, but not as promptly as she thinks appropriate.  Similarly, Partner B, a stickler for punctuality, notices that Partner A always has several patients backed up and waiting.  Even so, her patients seem satisfied.  The partners have each perceived a shortcoming in the other, but their mutual respect is intact. 

Respect does not require admiring, or even liking, everything about someone.  It does require the absence of any fatal flaws in the other person.  The fatal flaw can be a negative, like carelessness in patient care.  It can be the absence of a positive, the most common of which is not being sufficiently intelligent.  A fatal flaw is anything about another person that violates a  minimum standard.

Partner B begins to notice that Partner A repeatedly fails to return borrowed equipment and supplies.  It is time consuming and embarrassing to repeatedly have to send a medical assistant on a treasure hunt while he and the patient wait.  Partner B has discovered a fatal flaw in Partner A.

Once one serious shortcoming becomes apparent, Partner B begins to see more and more failings in Partner A.  He also sees fewer positive attributes.  (The same is happening with Partner A.  I will leave that process to your imagination.)

In relatively short order, their positive opinions of one another evaporate. Each knows the other holds him/her in lower regard, and both become angry and distrustful.  A remnant of mutual respect may remain, but it is seriously compromised.

Meanwhile, both partners have had changes in their personal lives and priorities.  Partner A has become almost obsessed with increasing her income, according to Partner B.  At the same time she resists spending money on staff and equipment, she is consuming more of each, leaving Partner B short of resources.

Partner B has discovered how much he enjoys more complex cases.  They reimburse at a slightly higher level, but his patient volume is down because they take so much more time.  Partner A feels as though she is carrying the load while Partner B indulges his need for intellectual stimulation.  They no longer recognize a common purpose.

It is probably easy to imagine how the practice is operating by this time.  The partners cannot agree on much of anything, so decisions get put off and problems don't get addressed, much less solved.  Staff members have picked their favorite partner with two notable consequences:  The partners get disparate levels of support and the staff members tend to feud and fuss.  Patients are negatively impacted in a variety of ways.

The situation could have been avoided.  It requires focus on maintaining the health of the relationship between the partners, the mutual respect and common purpose. 

I will talk more about how to do that in next week's blog.