If you are working in a solo practice, you probably have no need to explore the ins and outs of a buy-out agreement. If, however, you are working with a partner, you absolutely need to figure out this piece of your employment governance document package.

So many physicians find great success establishing a practice partnership—you expand the number of patients you can see, you have coverage if either of you needs to leave the office, and you have a colleague with whom to collaborate. Even the best partnerships, however, need to plan for the unexpected.

According to Healthcare Finance, before you work on your buy-out agreement, make sure that you and your partner have a clear employment agreement in place. This should cover everything from termination to malpractice, compensation, and other human resource items. Some physicians believe this type of documentation is enough, but the buy-out agreement is essential to protecting each partner.

First, sit down with your partner and have a long, detailed discussion about what each of you would want to happen during worst-case-scenario situations. If one of you dies, how should the inheriting spouse be bought out? How would this buy-out be funded? What if one of you has a tragic accident and is on disability? What if one of you wants to retire early? Although these are uncomfortable talks to have, they are better to have before anything unexpected happens.

Once you come to a general agreement on what each of you expects, you will need to identify a lawyer who has experience handling buy-out agreements, specifically for healthcare practices. Work with the lawyer to draw up the proper documentation so that your wishes and intentions will be protected.

As discussed in Physicians News, you may also need to identify an insurance professional if you intend to fund your buy-out strategy with an insurance plan. As with all insurance purchases, take the time to identify how much money will realistically be needed and balance this with what the practice can afford in premium payments.

No one wants to think about the unthinkable. But a buy-out agreement is an important piece of security that you need to have in place.