From seller to buyer: Tips for a smooth transition
Neil Baum, MD, and Randy Bauman discuss their tips to making the transition from practice seller to buyer as seamless as possible to keep patient retention rates high.
Randy R. Bauman is a partner at Delta Healthcare, a health care consulting firm in Franklin, TN. Neil H. Baum, MD, is professor of clinical urology at Tulane Medical School, New Orleans.
In the first two articles in this three-part series on selling a practice, we discussed general selling concepts and putting a value on the practice that is equitable to both buyer and seller. Once a sale has been finalized, the next order of business is to transition the practice from the seller to the buyer. In this article, we switch to the buyer’s perspective and discuss the steps necessary for a smooth transition, with the goal of retaining as many existing patients as possible.
The first step, and it’s a very important one, is the agreement in the contract for a period of overlap between the new urologist taking over the practice and the urologist who is leaving it. This overlap makes it possible for the exiting urologist to introduce the patients to the new doctor. A face-to-face introduction between doctors and patient, and assurance from the exiting doctor that patients will be in good hands with the new doctor, create a form of endorsement. During this overlap period, patients will have to decide if they are going to buy into the new doctor and his/her philosophy or search elsewhere for urologic care.
This overlap also allows the new doctor to become familiar and comfortable with the existing staff and learn the process of the exiting doctor and staff. This includes managing patient flow from scheduling, examination, insurance, and patient follow-up. Of course, the new doctor can make changes in the staff, but this should probably be done at a later date and not during the overlap period. We suggest that the overlap period be a minimum of 6 months and not longer than a year.
Outreach to patients
We suggest that the exiting doctor send a letter to patients with his intention of leaving the practice (retiring if that is the situation) and that the new doctor will be taking over his/her practice. This letter can enlighten patients on the training and skills that the new doctor will be bringing to the practice. It is important to mention that an overlap will take place so that the departing doctor can say goodbye and introduce the new urologist to patients.
It is also recommended that the exiting doctor use the letter to explain to patients why they should remain in the practice. For example, the letter might mention that the medical records are in the practice, the staff knows the patients well, and patients will feel comfortable with the new doctor. We suggest that a hard copy be sent to the patient, but also send an email copy if the practice has been collecting email addresses.
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If you really want to be certain that patients stay in the practice, then we suggest the “extra mile” approach. This consists of having the exiting doctor personally call every patient. Although this phone call may appear awkward and even cumbersome to complete, it goes a long way in saying thank you and goodbye. In the call, the exiting doctor can thank patients for trusting their urologic care to the practice over the years and then recommend an appointment to meet the new doctor. This very nice gesture is way to leave a legacy not only with your patients but also with the referring doctors in the community, as they will certainly hear about your kindness and consideration.
Next: Meet referring docs
Meet referring docs
It is very helpful if the exiting doctor introduces the new doctor to physicians who provided referrals over the years. We suggest a face-to-face visit and requesting 5 minutes with the referring doctor.
This meeting is not meant to go into detail about the transition process but rather should be a meet-and-greet occasion. Another suggestion is for the exiting doctor to take the new doctor to any staff meetings, grand rounds at the hospital, and any other social functions to introduce the new doctor to the medical community. We suggest that every referring physician you meet receive a follow-up note or email thanking them for their time and indicating that you will be looking forward to continuing the relationship that the exiting doctor had with the referring doctor.
All stationary, brochures, and print material needs to be updated with the name of the new physician. Avoid the unprofessional look of a brochure with the name of the new doctor written under the name of the departing doctor. Spend the money to give yourself a professional look with professional-looking print material.
Keep in mind that many older physicians have not embraced the Internet and social media. If you are buying a new practice, you want to have a robust Internet presence. This means an interactive website where patients can make appointments, pay their bills, and have their questions and concerns answered via email. You will also want to consider the use of social media and have Facebook, YouTube, and Twitter accounts.
If the practice already has a website, then we suggest that you update the site, introducing the new physician, what his office schedule will be, and what insurance plans he accepts.
You can announce your presence in the office with your name on the sign in the office directory and on the door of the practice. You don’t want to be hard to find. Make it easy by having adequate signage at strategic locations.
The reception area is also an opportunity to announce the buyer’s presence in the practice. A poster with your picture and a very brief bio will alert the patients that there is a new urologist in the practice.
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As a urologist, you will be dependent on referrals from other physicians and professionals like podiatrists, chiropractors, nurses, and pharmaceutical representatives. There’s no better way to introduce these colleagues than via an open house hosted by the practice. Be sure to also include the staffs of the potential referring physicians since they can be invaluable in making referrals. We suggest you collect email addresses of everyone who comes, then follow up with a personal thank you note.
Everyone should have something to take with them that will reinforce your services and your unique areas of urologic interest and expertise. Pamphlets, business cards, swag items (like a water bottle or stress ball with the practice logo) will help colleagues and their staff remember you long after the event ends.
Find a mentor besides the doctor selling the practice. Certainly the urologist who is selling the practice will be able to show you how the practice is run and how to care for the patients. The seller will also show you the business aspects of your new practice. However, you will need to “learn the ropes” of the hospital community. We suggest seeking an older physician, who is not a urologist but has a stellar reputation and the time to devote to introducing you to other colleagues in the medical community. This can be an invaluable resource, especially at the beginning of the transition process.
Conclusion
It has been our experience that practices that undergo a smooth transition from seller to buyer can achieve patient retention rates as high as 90% to 95%. But for those without a plan, retention rates may be as low as 50% or worse. There are so many ways to build a patient base for a new physician, but like everything else, you must have a plan. Get your plan in place before the new doctor arrives so he or she can hit the ground running. Starting a successful medical practice is doable and offers many advantages, such as autonomy and ability to make business decisions affecting the practice. Despite all the changes happening in health care, we still think this is the best way to go.
The Medical Group Management Association provides an excellent check list for any urologist buying a practice, available at http://bit.ly/MGMAchecklist.
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