Finance & Enjoyment Blog

Medical Practice Succession Plans-Give it Time and Be Transparent

When you own a medical practice, retirement considerations go beyond your personal aspirations and goals. Your retirement strategy must also include the transition plan for your medical practice and effective care coordination for your patients after you go on to enjoy retirement. Now that your medical practice is mature and retirement is no longer an elusive some-time-in-the-distant-future notion, it’s time to turn some attention to medical practice succession plans. At KKB, P.C. we find that it’s easy to underestimate the time and decision-making that goes into this transition, so we outlined some ways that we know, through our health care consulting experience, will improve your success while juggling the demands of a busy medical practice.

Start the Conversation Now

Nearly half of all physicians are older than 50. If you’re in that demographic or close to it, it’s time to begin your medical practice succession discussions to ensure a successful transition when you retire. The first step is to ask some fundamental questions. Do you want to partially retire? What qualifications and personality do you need in a successor? Where will you look to find that successor? Do you want to close the practice or find a buyer?

Communication and Transparency are Paramount

As you interview for your replacement, ensure that you are forthright and detailed about the practice financials and culture. Your potential successor needs to spend time in the practice, and then have an opportunity to have open communication with you and the other doctors. Don’t let assumptions from either you or your replacement derail the transition. Take time to discuss financials and culture openly and in detail to minimize miscommunication. Have candidates sign a non-disclosure agreement so sensitive information is kept confidential. It’s imperative to your medical practice succession success to have you, your partners and your successor be on the same page about all of the details. Valuations of medical practices include the following: accounts receivable, value of the equipment and office furnishings, and goodwill, basically the intangible qualities such as trained staff to office space to location that keep patients walking through the door.

Transitions Take Longer than You Expect

If you are in a group practice, you need to be sure your vision is aligned with your partners. Patients need time to get to know a new provider who will take over your caseload whether you are in a sole or group practice. The person you want to attract to purchase your medical practice will seek a business that has a thorough transition plan developed, because that’s critical to patient retention and ultimately the practice’s bottom line in the future.

How to Use this Information

It’s crucial to seek the advice of legal and financial experts to help you navigate a succession plan carefully. Lean on their expertise and counsel to guide you through the process to ensure you develop a plan that works for your retirement goals as well as your patients. At KKB, P.C., we are here to help. Please call us at 303-815-1100 or contact us online today!

What have you done to prepare your medical practice for your successor?

Posted in Retirement and Exit Strategies »

0 Responses to "Medical Practice Succession Plans-Give it Time and Be Transparent"

Leave a Reply

Fields marked with  * are required.

Name *
Email Address *
(will not be published)