Physician Transitions: Start Planning Today To Secure Tomorrow

The natural progression for physicians in a medical practice can present challenges but planning ahead can make all the difference and ensure a successful transition.

Eide Bailly’s Dan Swan, CPA, brings 20 years of accounting experience with most of that time spent working with working with independent physician groups, hospitals, and health systems on physician compensation. Dan and his team also help medical practices through physician transitions including slow-down, retirement, and recruitment. All of these transitions can significantly impact a practice if not addressed early and comprehensively.

“We work with physicians and organizations who are executing any kind of change to their practice,” explains Swan. “In most cases, physicians we work with are getting to the age of retirement and want to understand what that might look like for their practices.”

Here are some key considerations when planning for a physician transition:

• Develop an appropriate buy-in and buy-out process.
  It’s important to determine the best way to value the practice and structure the buy-in and buy-out payments, as well as the impacts to physicians and the group.

• Evaluate and adjust the compensation plan.
  You’ll want to evaluate the compensation model to allow for transitions without negatively impacting the practice or the patient care experience. If the compensation plan needs adjustments, consider how those changes may impact the practice and plan accordingly.

• Take advantage of growth opportunities.
  When bringing on a new physician, take advantage of potential growth opportunities by evaluating additional service opportunities to expand your practice’s reach and enhance patient care.

“We have helped practices modify their compensation models to allow physicians who are slowing down to continue to be a part of the practice that is fair to both parties,” says Dan. “If a practice wants to add a new physician, we can evaluate the potential impact of that decision. We’ll put together an analysis for the first few years and beyond, based on productivity assumptions and new patients.”

When it comes to physician transitions, medical practices that have a plan in place prior to any changes have a competitive advantage over other practices. Having a plan in place for physician transitions allows your practice to work proactively and ensure future financial health while protecting the vitality of your practice.

Dan says the sooner a practice plans, the better off it will be. It’s common to start planning and discussing these changes a couple of years before a physician leaves the practice. “It’s best to address all this early, at a time when everyone involved can step back and see the whole picture easier,” he explains. “The longer you wait, the trickier it can get. It’s always best to be proactive.”

Eide Bailly’s experienced professionals work alongside healthcare attorneys to put structures in place that work best for everyone involved. If you’d like to get an early start on planning for a physician transition, we can help. To learn more or chat with an Eide Bailly healthcare services professional, visit www.eidebailly.com/healthcare