By Laura Freeman
Years of working from goal to goal is a near universally shared experience for those who choose to become a physician. Once established in a busy practice, the focus tends to shift from what comes next to the here and now
However, even for physicians in the early years of their career, it’s good to continue thinking about the future and considering how you might respond if the unexpected comes along. Like patients, physicians are equally at risk for illnesses, injuries and family issues that can be career limiting. If your spouse is transferred to another city, or you become interested in a subspecialty or procedure that requires more training, or if you decide to move to a practice with a different culture or more opportunities, how would you adapt?
For many physicians, succession is a topic that only comes up as they approach retirement.
“The best time to begin succession planning depends on your specialty, how many people are in your practice to share the load in transition, and where your practice is located,” Georgina Perry, CPA, CMPE , Director of Physician Services for Carr, Riggs and Ingram LLC said. “If you are in a popular specialty that is graduating a lot of medical students, finding someone to fill your space is easier. However, if you are in primary care, there is already a physician shortage and finding a candidate could take a while. This is especially true in rural and underserved areas.
“Before recruiting begins, it also helps to consider the additional roles you play in your practice and the qualities that a candidate would need to fill those roles. For example, in addition to being a physician, you may have a leadership role in practice management. Leadership and management abilities would be desirable in your ideal candidate.
“The more active phase of succession planning typically begins from three to five years before retirement. The first step in the formal succession process is notifying partners and practice managers that you are planning to retire and when.
“Before our clients announce their plans to retire, we like to put them in touch with a personal financial planner who can review the assets they have in place for retirement, and help them work out a budget that will allow them to live the life they want and do the things they’ve looked forward to doing.”
Many of the details involved in transferring the value of your shares of the practice to your personal assets will be governed by the partnership agreement or other contracts that were set up when you joined the practice. Some physicians work as employees rather than as partners and you only need to give notice that you are leaving. Others own shares that are sold back to the practice. In both cases, the practice will then be responsible for finding a successor.
“Some physicians, including solo practitioners, will need to find someone to buy out their share of a practice,” Perry said. “Although you may be responsible for recruiting and sale, if you have partners, be aware that they will be the people working with the new person and may want to have input on whether the new physician is a good fit.”
Whether you will be selling your shares back to your practice group or selling it to the physician who will be taking over for you, it can help to consult with a medical practice financial specialist to work out a fair valuation and get advice on other business details.
Finding good candidates for recruitment can be challenging. You can begin by asking for recommendations from other physicians you know, contacting instructors at medical schools, or talking with the nursing and health professions staff at a teaching hospital to ask about physicians in training. Suppliers may also know physicians who might be interested in joining a group practice.
Being a guest lecturer, mentor or teaching a class at a medical school can acquaint you with candidates who will be looking to join a practice in a few years. Your practice could also offer internship opportunities. You could serve as an advisor for outreach programs, clinics and medical mission trips with participants who will soon be graduating.
“It’s often customary to stay on for a while during the transition to advise your replacement on fitting into the culture and using systems and equipment. You’ll introduce them to other physicians and the staff, and to providers who refer patients to you, along with physicians you refer your patients to.” Perry said.
On the personal side of succession planning, there’s more to consider about retirement than finances. The people who do best in retirement tend to think of it as retiring to something rather than retiring from. There are only so many hours a day to golf or fish before it becomes boring.
Will you travel? Make sure your passport is up to date and start looking at brochures. Some of the best trips are booked up to a year in advance.
“If you would like to continue using your skills and the wisdom you’ve learned as a physician, there are many ways to do it,” Perry said. “You can earn extra money for travel and other activities by reviewing files for insurance companies and attorneys. Volunteer at clinics or outreach programs. Mentor, teach or write a book or article on a topic that interests you. Work with local medical organizations or speak to community groups.”
If a local medical organization is putting together a mission trip to help needy people in Central America, go with them as a physician. Make a difference. See the world.
Whatever you choose to do in retirement, enjoy it. You’ve earned it.