Our Managing Director Jane Braithwaite has been tackling difficult questions arising from discussions in the digital issues of Independent Practitioner Today. This month she responds to a consultant’s ‘bombshell’.
‘I work in a group with two other partners who have both dropped the bombshell that they are aiming to retire next April. I want to keep my practice going for some years. How do I manage this situation?’
Hearing that the other partners in your group are about to retire with relatively little warning can be anxiety-inducing, to say the least.
You might think that your business is about to disappear or that your income is going to significantly decrease. But with a little planning and careful discussions with your partners, this does not have to be the case.
I can also tell you how to manage partners leaving your group through retirement, with ways to facilitate the transition, and how the group could continue to thrive after they have left.
Look to the start of the group
When the group was formed, hopefully contracts and agreements were drawn up. Buried deep in there should be the mechanism for a partner to voluntarily leave the group.
The contract should spell out how much notice the partner should give, what rights they have to any profit in the group at the time of leaving and any obligations of the group to the partner after they have left.
Of prime importance from a clinical standpoint is deciding who is going to look after the exiting partner’s patients and how to facilitate a clear and comprehensive handover.
Financial obligations can be difficult to disentangle, with the issue of ongoing profits derived from patients that the leaving partner acquired being particularly thorny. Hopefully, this should all be spelled out in the agreement signed on formation of the group.
Things become much trickier if there was no founding agreement, or the agreement does not cover the retirement of partners.
This situation can only be resolved by careful negotiation between the remaining partner and those who are leaving.
What should this plan involve?
It is very unlikely that you would be able to convince your partners not to retire, and you probably shouldn’t try. What is important is that you come to a plan that works for you, for them and for the group and its patients.
In the meetings that you need to call to sort this out, it is important that everyone is open and honest about what they want to get from the process, with their objectives and priorities clearly stated.
You may think that your partners want to ensure that they get the maximum value for their ‘share’ of the group, but they may be more interested in an orderly transition and the stability of the group than maximising their personal profit.
The outcome that you need to get from your meetings is a written agreement on how your partners will exit the group. This will protect both your interest and theirs and allow an orderly process for their retirement.
You do not need to shut the group down, but it is unlikely that it will be able to continue in exactly the same way with only one third of the partners left.
Having a plan in place will allow you to prepare for the transition and allow you to make changes to the form and function of the group as you see fit.
What options are there to change the practice?
Before leaping to a decision, it is worth thinking about what form you would like the group to have. Consider how the group was before the partners retired. Were you happy with the structure?
One option might be for you to take over the entire practice by yourself. The advantages of this are that you would have sole control over the direction of the practice and all the rewards of this hard work would be yours.
On the other hand, if the workload was previously shared between three colleagues, you may find that it is not manageable by yourself.
If you do decide to take over your partner’s shares of the group, you will need to decide how you ‘inherit’ their patients.
It is important from a clinical standpoint that the patients experience continuity of care as they transition from one clinician to another.
Your partners may want some form of compensation for passing their patients to you. This could take the form of a one-off payment or an on-going reward dependent on the revenue that the patient brings to the group.
The nature of this financial return should hopefully be spelled out in the contracts that you signed when the group was formed. If this is not covered in any agreement, then it will need to be negotiated as part of the exit process of your partners.
If you feel that the workload is not manageable alone and you wish to keep the current number of patients, then you will have to look for other partners to join the group.
While the complexities of recruitment to join a group practice are beyond the scope of this article, there are a few things that are important.
Rather than just co-opting the first consultant that you can find, consider what skills and knowledge would complement your own. Is there particular training or background that may help the group expand revenues and offer new services in the future?
Take time to make sure that all the legal work is completed correctly, with the help of an expert. Ensure that those who join sign a contract, so that everyone is aware of their new responsibilities to the group.
If you feel that some of the workload could be managed without the direct input of a consultant, you may be able to employ staff such as nurses to undertake clinical tasks on your behalf. This can help make sure that your limited time is used for activities that only you can perform.
If you do not currently employ clinical staff, careful advice is needed to ensure that you are providing a service that is safe and well-supervised, with on-going training and professional development.
If your partners announce they are going to retire, it is important not to panic. While it may feel like you are about to lose the business that you worked so hard for, this is not the case.
There are a number of ways that a group could continue, either in its current form or by altering its structure.
Change can be uncomfortable, but it is inevitable. This may give you the opportunity to push the group in new directions, with great personal and professional rewards.
Managing Director Jane Braithwaite regularly writes for the Independent Practitioner Today, with this article first being published here.