Here are five practical tips for physicians that are planning on retiring in the next few years and don’t want to be ill-prepared.
1. Communicate. "The primary consideration is making sure your patients are taken care of," says Tommy Bohannon, divisional vice president with Merritt Hawkins. That means sending a clearly written letter to patients that explains how their medical records are being handled and where they can access them if they want them transferred elsewhere.
2. Leverage records. Remember the custody of those records might have some value, even if your overall practice isn't going to attract a buyer. "In some cases, another practice might not be interested in a sale but might be interested in having the opportunity to notify patients they are holding their records," says Vasilios "Bill'' Kalogredis, a partner with Kalogredis, Sansweet, Dearden and Burke, Ltd. It might not generate a lot of money, but it beats having to pay a service to hold the records and respond to patient requests for sending them, he says.
3. Timing is everything. Some doctors want to gradually cut back their work hours, winding down a practice, and then simply closing it, says Kalogredis. That's fine, he says, but it could come at a significant cost. "We had one client who had a successful general practice but the last five years he cut back dramatically so the practice revenues went down and it was just far less valuable. In his case, we found a buyer who could see the potential from a few years back, but that's rare," he says. "Most physicians say they want to die with their boots on, but then the practice goes down and it doesn't have the value it once did. In some cases that's OK." The doctor doesn't need a hefty buyout to make his or her retirement work, he says. Other times, it can be a problem.
4. Pay it forward. Just as corporate types say never to burn bridges, make sure you set up your successor for success if you're transferring your practice, Kalogredis says. "You want to stick around and endorse the person who will be replacing you, ideally before you even start notifying patients you're retiring," he says.
5. Mind the tail. Of course, don't forget the basics, experts say. That means confirming your malpractice tail insurance is in place and you are complying with any contract agreements on leases or equipment you'll be transferring.
This article originally appeared in the October 2015 issue of Physicians Practice