Q: Hello Dr. M. I am a former student of yours, and I am need of some help on a IC problem I am having. I have looked at your previous e-mails hoping to find something similar to my problem. After looking I decided to write you. If you could give me some advice it would be greatly appreciated. I am looking at a space in Alpharetta where I have worked for eight months as a CA. He(host) has offered me two small rooms where I can set up practice. These rooms are both 8 by 10 and towards the front of the office. I would have to use these two rooms as my for adjusting and or office space. Also included in this contract is the use of a small waiting room that seats about seven or eight people, a reception desk that is large enough for one CA and tight for two. For this space he is asking $1200.00 a month. I would then have to pay 50% of all utilities except phone. My phone lines I would have to provide myself. I would have to pay for the use of his copier (4 cents a copy), X rays($6 for 8x10 and $8 for 14x17), and also 50% of repairs on Xray machine and processor. Billing by the host would also be offered, but for a fee.(probably $2 per claim) This is how this agreement would start and as my business improved he would then want everything stated above except for the 1200 dollars. This would then be switched to 50% of my gross collections or $1200 a month. Whichever is greater. All walk ins would be directed to the host. The office itself is 1200 square feet. The host doctor would have 4 personal rooms to my two.(equal in size to mine) The common space includes the waiting room, the small reception desk, standard size x-ray room, bathroom, and processing closet. The host doctor in the past 8 months has never seen more then 100 patients per weekor for that matter ever since he has opened in 1991.He also has a rough time collecting his fee because he is about 90% insurance.This makes it hard for him to makes ends meat week to week. He can barely pay my CA salary at 8 an hour bi-weekly. I personally love the location of the office and like the host as a person, but I also have my opinions about this contract. What would you do as a new D.C.? A: This is almost a non brainer .. if you look at your entire question to me and break down objectively the pros and the con's .. there is maybe a 1/2 a pro and the rest con .. the only pro I see is you like the location and the host doctor. Great ..for $1200 a month you can begin to find your own place. I didn't say it would be easy nor possible in Alpharetta but that's a hunk of change for two small rooms and an environment that you may wish to be a .. part of. Therefore .. my advice .. since you asked .. if you were to choose this IC .. ask for $800 a month as rent and 50/50 split. The extra $400 you put into promotion .. and have a separate phone for those calling .. the problem is the host doctor already stated that walkin..or callin's are his .. if you do any aggressive work to gather new patients and you have no room for your own CA .. you best have a way that they know the new phone calls are yours. The fees will have to be established as you may not be on any of his HMO lists and if insurance is heavily used .. which split will you get .. if a business decision is met determining a reduced fee who makes it .. if his fees are lower than what you care to offer .. who suffers? The 50% of x-ray repair is ridiculous .. this should be the owners total expense .. unless you seem to be using it more than they. The split or some % of the cost of chemicals and film may be in order .. but not 50% of repairs .. although this will be rare. Also .. I would think that your paying $6 and $8 for film would pay for the upkeep of the machines ..processor and unit .. if that is what is meant by repairs. As far as billing fees .. this is acceptable .. $2 isn't bad .. but be sure you keep a good account of the progress from the office to your pocket. There must be a way to account for the money .. of you do not have an accountant let me know .. I'll turn you onto mine. The $1200 plus 50/50 may be excessive as you start out. Have you determined the cost of his rent .. is it $2400 a month .. not including utilities .. if you are paying half .. you should use 1/2. I'm not clear how he pays his CA $8 an hour bi weekly .. this is a low salary .. why not you pay her some extra with PR for you .. but of course you can't as she really works for the host DC .. this is the problem you are running into. Personally .. I'd rather see you go on your own .. move to a new location where you can afford the rent and lease some start up equipment .. and go for it. Or .. locate another new graduate and do the 50/50 split starting fresh Give this some thought and let me know Dr. M