Using financial evidence to break a partnership deadlock

A privately held specialty healthcare group operating two locations faced a difficult decision. Two providers had merged their individual practices into a single organization, combining back-office functions under a 50/50 ownership split. Each partner brought distinct clinical strengths, which allowed the practice to expand services and treat patients across both locations, but over time, that balance became a source of tension.

The partnership was successful. Patient demand was strong, growth was consistent, and profitability supported regular owner distributions. Still, equal ownership created a strategic impasse.

One partner saw an opportunity to grow by adding an associate who could take on clinical workload, support continued patient growth, and eventually buy into the practice. This approach would support succession planning, protect business continuity, and give the partners flexibility around retirement without pressure to sell to a third party.

The other partner was more cautious. He worried that introducing a new provider would disrupt a well-functioning practice, dilute income, and create disruption in an otherwise stable business.

Both partners agreed on one thing. They needed a way to evaluate the idea based on facts rather than assumptions.

The Turning Point: Anchoring Decisions in Financial Evidence

To break the deadlock, the partners engaged the Elliott Davis Healthcare team for their experience in healthcare, financial planning and analysis (FP&A), and partnership modeling.

The objective was straightforward but not simple: Build a financial model that could answer the real questions holding the partnership back.

• What level of mentoring would be required from the existing partners?
• How long would it take before the associate began adding profitability?
• Would the current partners have to sacrifice their own patient volume or income?

The engagement began with a discovery period focused on understanding each partner’s individual goals. One prioritized growth and succession. The other prioritized income stability and minimizing disruption. Both wanted a stronger exit position over time.

Those goals became the foundation of the model.

Building a Growth Model Based on Real Data

Using historical patient data from the practice, the advisory team built a multi-year financial model informed by:

• Historical patient visit trends across both locations
• Production per patient for the region
• Specialty-specific conversion benchmarks
• Provider capacity and procedure time
• Conservative ramp-up expectations for a new provider

Rather than assuming immediate performance, the model incorporated realistic constraints. Early production per patient was set lower for the new provider, conversion rates were reduced during the introductory period, and expenses accounted for mentorship time and onboarding costs.

Multiple scenarios were tested. These projections allowed the partners to see outcomes across a range of realistic conditions rather than relying on best-case assumptions.

Stress-Testing the Partners’ Biggest Concerns

A critical component of the analysis focused on the concerns of the more conservative partner. The model showed that existing patient growth trends could support the new provider with minimal impact on current production, even under cautious assumptions.

Mentorship requirements were quantified in both time and dollars. The growth-minded partner was willing to assume most of that responsibility, and the model included compensation for that role to avoid creating an unpaid burden.

The analysis showed that the associate would reach profitability within one to two years, even under conservative assumptions. Over a five-year period, the practice was projected to generate approximately $3 million in additional enterprise value and more than $1 million in incremental owner distributions.

The Resolution: A Clear Path to Growth, Succession, and Value Creation

With the data in hand, the partnership dynamic changed. Decisions that once felt risky became measurable and assumptions were replaced with evidence.

Under a structured growth plan, the new provider would primarily work alongside the mentoring partner while rotating between both locations. No new offices were required. The strategy relied on the existing footprint, referral patterns, and patient demographics.

The plan established an internal buy-in and succession strategy that allowed the senior partners to control the timing and terms of retirement without forcing a third-party sale.

The financial model became a flexible five-year framework, enabling the owners to adjust to changes in patient demand, track performance, and articulate a clear growth narrative if they later chose to transact.

By grounding a complex partnership decision in specialty-specific financial analysis, the partners could move forward with shared expectations, a realistic plan tied to patient demand and provider capacity, and a structure that preserved continuity. Whether or not they ultimately added an associate, they now had a durable model to guide budgeting, performance tracking, and long-term planning.

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The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.