Transitioning From A Solo Practice To A Group Practice
A group podiatry practice can offer numerous financial benefits but stepping away from a solo practice can be a very difficult decision. By providing an example of a solo DPM that he worked with in weighing this decision, this practice management consultant illustrates some of the key issues and considerations for solo practitioners looking to join a group practice.
In the 1990s, I was the practice management speaker at a number of American College of Foot and Ankle Surgeons (ACFAS) meetings. One of the topics that drew a large number of participants was the topic of practice mergers. For the past five years, mergers and the creation of large single specialty and multispecialty groups have been not only topics of conversation among all specialties but more and more among solo practitioners. Solo practitioners have merged with colleagues into larger groups or are at least considering it as a defensive move in preparation for what they perceive the future holds for them.
Over the years, I have merged practices of different sizes into groups and groups into larger groups. When all participants are sitting in a room and discussing a merger for the first time, they are all nervous about starting a new phase of their professional career at the same time. When a solo practitioner considers joining an existing large group, there is an entirely different set of considerations and circumstances.
To give you an example, John (not his real name) was a client of mine six years ago. John had been a successful podiatrist for almost 15 years. He owns his office condo and has invested in its renovation. He offers a wide group of services to his patients including performing surgeries in his office, an ambulatory surgical center (that he is an investor in), and ultrasound. He has his nurse take care of most of the routine nail care but always walks into the exam room and says hello to those patients.
He has privileges at the local hospital. He has been in the same coverage group for almost ten years. He visits with his referring physicians twice a year and sends them a consult letter within 48 hours of seeing a new patient they referred. His office manager knows the names and phone numbers of all the referring physicians’ office managers and she tracks how many referrals the practice gets each month from each referring physician. John has built a successful practice.
Three years ago, John went to a meeting with seven other podiatrists. Three of those in attendance wanted to create a large single specialty practice. They explained the group could centralize billing and some other administrative functions, and have one accountant instead of eight. The group could also recruit a new podiatrist to work at more than one office part time. The other four listened and began to agree with the concept.
John did not. He knew them for a number of years, shared calls with some and respected all of them. However, he could not bring himself to give up what his wife called his mistress and child. He grew it from nothing and now it supplied his family with a comfortable lifestyle. He did not think he could work with partners after having none for so many years.
Three years later, the large group has become his competitor. The seven partners stayed in their offices for two years. Then two partners consolidated their office into a larger office. The new office is closer to John’s office. John’s patients used to wait two weeks for an appointment. His wait time is now down to a few days. In a meeting with his office manager, John discovered that many of his patients who had a two-week wait decided to see someone else and never came back. John and his accountant calculated that he could not afford to bring in a new podiatrist even though it would help him maintain the financial health of his practice.