Physicians, dentists, podiatrists, veterinarians and other doctors face many decisions and forks in the road during their careers, from start to finish.

One of the tougher, if not toughest, ones relates to how and when to cut back one’s clinical workload (if not to fully retire). Many doctors who have been in practice for decades do not want to even think about it.

Unfortunately, I have seen too many doctors who ignored the advice to plan ahead.  The end result in those circumstances too often is disastrous to the doctor, his/her patients and/or family.  The below are composite examples to protect confidentiality illustrating what I have seen.

One unfortunately not uncommon story involves a solo physician who had health issues for years.  In spite of my long time urging, he refused to consider joining forces with an institution or other physician(s) so that a succession plan would be in place if and when illness or death would force him to stop practicing.  He died.  At that point no one wanted the practice.  His employees lost their jobs.  His patients had to scurry to find care.  And his family was stuck holding the bag.  It was a nightmare which could have been avoided by not “ducking” things.

Another common fact pattern is capsulized by a dentist in his early 60s.  He had a very successful general dentistry practice.  But he did not have a Partner or anyone committed to buy the practice if something were to happen to him.  By the time he decided to seriously consider a succession plan, the value of his practice had diminished because his volume had dropped.

This does raise the questions as to how far ahead one should try to lock things in.  There is no one size fits all answer.  When I advise doctors I attempt to have them clearly define what their goals are and then help the doctor prioritize them.  There are many factors involved.  Among them are one’s finances, personal life, health, outside interests/hobbies, and how much one continues to “love” practicing.  For many, phasing down on a graduated scale works best (as opposed to going from one hundred miles an hour to zero in one fell swoop).  But, for those who are equity owners in a practice, serious consideration should be given to the timing of selling some or all of said equity if one wishes to maximize his/her return relative thereto.

We recently advised a very successful dermatologist.  She had a great practice.  She was unusually entrepreneurial.  Even though she had excellent dermatologists and physician extenders working for her, she had not found anyone with whom she could partner and ultimately transition her practice with the vision and business acumen that she had to maintain and grow the practice.  Even though she was only in her 50s, she decided (after we helped her explore numerous options) to partner up with Private Equity.  It gave her a chance to “cash in” some of her equity at a good number while still maintaining some upside benefits.

Another situation involved two primary care physicians.  One (Doctor #1) was in his sixties.  He had several employed doctors.  But none of them were successor worthy or ready, willing and able to buy the doctor out.  The other practice was owned by a successful, 45 year old physician (Doctor #2).  She was willing to grow and had the entrepreneurial skills and interests to do so.  Practice #2 bought Practice #1.  Doctor #1 continued to work for Practice #2.  He sold before his practice diminished.  He was able to continue to service the patients who knew him.  He was able to help integrate them into Practice #2.  As Doctor #1 cut back, the odds of his patients staying with Practice #2 increased.  The transition went smoothly. This is an excellent example of the ultimate “win-win” arrangement.

There is no one answer that suits each situation.  We have seen a lot.  However, it is important for each healthcare professional approaching the end of his/her professional career to explore and seriously consider the options available to him/her.  We provide more than just legal advice.  With my decades of experience, we provide pragmatic and business advice also.  All are important in arriving at the right decision!

Vasilios J. “Bill” Kalogredis has been advising physicians, dentists, and other health care professionals and their businesses for over 40 years.  He is Chairman of Lamb McErlane PC’s Health Law Department.  bkalogredis@lambmcerlane.com; phone, 610.701.4402; or fax, 610.701.3275.