Family Medicine Ownership

Part one: what a buy in actually buys

A buy in is not a fee for a title. It is the purchase of a share of real things.

The patient panel is the first asset: patients who already come to the practice, already trust it, and already generate visits without you spending years building a reputation in the town. Ask how large the panel is, how it is shared, and what happens to it if a partner leaves. A panel that walks out with a departing physician is worth less than one attached to the practice.

The equipment is the second asset: exam tables, procedure gear, the ultrasound, the lab setup, and computers. Ask for an inventory with ages. Equipment near the end of its life is worth less, and replacement cost lands on the partners, including you.

The receivables are the third asset: money earned but not yet collected from payers. Ask how old they are and how much the practice historically collects, because a dollar billed is not always a dollar received. Goodwill is the fourth asset, and the softest: the name on the door and the referral relationships. Goodwill is real, but it is also where prices get padded. If most of the price is goodwill, push hard on how that number was set.

How buy ins are usually paid

Most buy ins in small practices are paid out of future distributions over time rather than cash up front. You become a partner, and a portion of what would have been your partner income is held back and applied to the purchase price until the buy in is complete. The sellers get paid from the earnings of the practice itself, and you avoid a large check or loan in your first attending years.

That structure still needs paper: the total price, how much is held back from each distribution, how long the holdback runs, what you own at each step, and what happens if you leave before the buy in is finished. A buy in with no exit terms is a one way door. And ask who owns the real estate: the building is often owned by the senior partners personally, with the practice paying rent, so your buy in may buy the practice and not the building.

The diligence questions, and proof the track is real

A partnership track is real when the group can show you, in documents, how the last physicians who walked it came out. Start with how income is split: equally, by production, by panel size, or by some blend? Two groups with the same revenue can pay partners very different amounts depending on how overhead, call, and unprofitable work are shared.

Ask what partner income actually looked like over the last three years, and judge it against the market. Average family medicine compensation is $288,000 (Medscape Physician Compensation Report 2026). The median is $305,000 and the self reported average is $316,400 (Marit Health, 1,585 salaries). Doximity puts average total compensation at $318,959. If partners here earn well below those figures, ownership is a lifestyle purchase, not an income purchase.

Ask what happens to your buy in if the group sells to a health system. The sale terms decide whether your share converts into sale proceeds, into a new employment contract, or into very little. Then ask for proof of the track: how many associates were offered partnership in the last decade, how many made it, how many left first, and can you speak with one who left. Our question on buying into a private practice partnership or staying employed works this decision in full.

Part two: the direct primary care model in one paragraph

Direct primary care replaces insurance billing for primary care with a membership fee paid by the patient, usually monthly. Members pay the practice directly, the practice does not bill insurance for the primary care it delivers, and in exchange members get access: longer visits, direct communication, and a physician whose panel is small enough to know them.

What conversion costs to start

The startup cost depends almost entirely on how much practice you build around yourself. The American Academy of Family Physicians, writing in Family Practice Management, puts the range plainly: a direct primary care practice can start for as low as $5,000 in a home visit model with no staff, and the cost climbs to several hundred thousand dollars when you buy or build an office and hire staff. One documented practice in that report required $100,000 to open.

Read that range as a design choice. Every element you add, a leased office, a medical assistant, more space, raises what you spend before the first member pays and raises the monthly overhead membership revenue has to carry.

The panel math, worked

The average direct primary care membership price is $98.64 per member per month, and the average panel cap is about 600 patients. Those two figures, from the State of Direct Primary Care report and the American Academy of Family Physicians, run the whole model. The arithmetic below is gross membership revenue, before overhead, taxes, and your own pay. It is a ceiling, not a paycheck.

At a full panel: $98.64 times 600 members equals $59,184 per month, and $59,184 times 12 months equals $710,208 per year. At a leaner 400 members, the same price gives $39,456 per month and $473,472 per year. Churn is the quiet threat: members lost must be replaced just to stand still.

Now the honest limit. No sourced figure exists here for what overhead should be, so this page will not invent one. Rent, staff, supplies, malpractice coverage, software, and your own benefits all come out of the gross above. The math only works if overhead stays lean, because revenue is capped by design. Price your actual overhead against the 400 member row first. If the practice only works at 600, it does not work yet.

The ramp problem, and the reserve that solves it

Conversion has a valley in it. Income dips while the panel builds, and the valley is where conversions die. Members join over months, not weeks, and every month below a few hundred members pays you less than the employed job you left. Your household bills do not ramp with it. The mortgage and the loan payment arrive at full size from the first month.

The finished reserve, six months of expenses on W2 income and up to twelve months on 1099 or sporadic income, is not a nice cushion for a conversion. It is the bridge across the valley. Never convert with the waterfall unfinished. If the match is not captured, the cards are not at zero, coverage is not in place, and the reserve is not finished, the conversion is being funded by hope. Finish the waterfall first, in the order laid out on the family medicine new attending page, then convert from strength.

The Medicare caution

One structural caution belongs in every conversion plan: Medicare. Charging members a fee that covers services Medicare also covers collides with Medicare rules. That collision is why most direct primary care practices opt out of Medicare rather than running a membership model inside it. Opting out is a formal step, and some of your older patients will not follow you. Count them honestly in your founding panel projection, and get advice from your own attorney first.

Convert, start fresh, or stay employed

There are three doors, and the right one depends on what you already have. Converting an existing practice makes sense when you already hold the asset that takes longest to build: a panel of patients who trust you, a meaningful share of whom will pay a membership to keep you. You keep continuity and a founding list.

Starting fresh makes sense when you have little panel to convert, are moving to a new community, or want the leanest possible cost structure from day one. Employment pays you the market figures above, carries the overhead and the payer contracts for you, and lets you finish the waterfall without a valley. If the buy in price is padded or the track is unproven, the employed door is the correct answer until the numbers change.

Common Pitfalls