April 24, 2019

Private medical practice: Nika Korelova clarifies terms of partnership

The medical reform has stirred up the market and inspired many doctors to start a private practice. Now primary healthcare doctors can count on guaranteed income from the National Healthcare Service offering their patients free injections under the state program, issuing sick leave certificates and prescriptions for Accessible Medicines, etc. Learn more about what private practitioners can do in the new videos on our YouTube channel.

According to the doctors we interviewed, among the main obstacles on this path is the fear of losing stability, including financial stability. “What if I can’t pull it off by myself?”. A partnership could be the answer to this question - when colleagues decide to conduct medical practice together or when a doctor/doctors find an investor (not necessarily one from the medical sector).

However, one should remember that partnership is not just about pooling resources, knowledge and experience - it also carries risks of disputes in matters related to management, profit sharing and decision making. Such disputes could hurt the cause or even destroy it. These risks can be mitigated though if you’re aware of them and strike appropriate agreements with your partner beforehand. ILF lawyer Nika Korelova discussed this with doctors and medical managers during the 10th practical conference “Private medicine: realities of practice” at the 8th International Medical Congress in Kiev.

Visit this link if you’d like to shape an agreement with your partner in medical practice together with our lawyers: https://ilf.space/joint.medicalpractice

Nika stresses: putting partnership terms in writing will held avoid misunderstandings and conflicts between partners. Here’s what such a contract should specify:  

  • nature and estimated worth of each partner’s contribution to the cause
  • on what conditions partners can withdraw from the business and who they can sell their stake to
  • who appoints the CEO and accountant, as well as other executives (if necessary)
  • which partner is responsible for the service and processes in the medical practice, which - for attracting and retaining customers, and which - for financial aspects
  • the format and rules for keeping records of all joint decisions, meetings, agreements, etc.

Depending on the form of the practice and terms of partnership, this could be a joint venture agreement or a corporate agreement: “This choice also depends on your ultimate goals (whether you intend to keep expanding the business geographically under one brand or not, to attract new partners in the future or not, etc.), on types of activity (mono-practice or medical center) and funding methods (private funds only or state funds as well through interaction with the National Healthcare Service). In any case though you should start by preparing a business model."

Many people are not yet used to such cooperation formats and still stick to verbal arrangements. These, however, will not hold up in any court should a conflict arise between partners over joint assets after all attempts at settlement fail due to non-transparent or not properly formalized agreements.