Is this back link strategy a poor business decision?

I have a health related website which I am in no rush to monetize, my first priority is to build page rank and dominate the serps. I am thinking about letting healthcare providers advertise their services on my site (via a searchable directory listing), in exchange for a backlink on their site. This will get me hundreds of high quality backlinks and help marketing tremendously I'm sure. My only question is, at some point, I may decide to monetize, and my way of doing so would be to charge providers for advertising on my site, (these would ostensibly be the same people that I gave free advertising to in the beginning for a backlink). You can see the dilemma here, I may be limiting my future options and shooting myself in the foot, and making people angry by trying to switch them to a paid model someday. Any one have any experience with anything like this?

Basically you are asking what business model you should apply. I can tell you that the TV ad-model does not translate well into internet. With TV, people are passively watching and the ads are the basis to build brand-awareness whilst the brain is in the beta-snooze state so that when you wander down the supermarket aisle and try to pick something from the huge range (chooser's dilemma) their brain pops up a familiar shape/logo whatever and their selection narrows.

Now the interest experience is different, people are ACTIVELY seeking, either information, expert opinions or comparison. Here, ads unless HIGHLY targetted, are viewed as a distraction and even irritant. You really have to think critically, who is your customer? Where is the value generated, how can you capture it?

Your specific question was whether a free-backlink can be converted into a paid placement later. There are several approaches
1. make it paid from the start but offer health providers x months free
2. make site freemium as use the ads as annoyware to convince people to upgrade (risky)
3. find another alternative non-advertising model, perhaps paid placements as some doctors go to pharm events who are paid to give a talk of PERTINENT interest

Unless your business model is compatible with the ethos of your users, you risk alienating them ... have you considered asking them?