GI practices and centers today face an industry with an aging provider pool and younger physicians that increasingly opt for salaried positions with hospital systems over private practice. For this reason, succession planning is an essential part of long-term strategic planning.
As a physician slows down and moves into retirement, it will undoubtedly have a negative impact on volume and revenue for both the practice and center if succession planning is not successfully undertaken. GI practices and centers can counter so by absorbing the volume of the retiring physician into the remaining physicians’ practice or by recruiting additional providers.
If the practice and center are to minimize the impact or potentially grow volume with a new generation of physicians, physician partners must get ahead of the curve through proactive planning for this transition.
Important Questions to Address
When a physician partner in a center approaches retirement, a number of questions can arise. These are difficult to answer for the center, the physician and any practice partners:
- Who will take over the retiring physicians’ patients?
- Does the practice need to hire a new physician and if so, whom?
- If an additional physician is necessary, what attributes are wanted or needed in a physician?
- Can the retiring physician work part-time to ease into retirement?
- Can a physician stop performing center procedures and focus on the office?
- How will the reduction of physician providers impact the group’s coverage responsibilities at the practice, center, hospital and outreach clinics?
- How will the center maintain or replace the volume of a retiring physician?
- What notification clauses do practice or center agreements have in place to prevent unexpected departures with little to no notice?
- What are the expected staffing levels needed to support operations after a physician retirement?
- Is there a potential for merging or buying out practices after a physician retires?
- Is there a potential need for a joint venture with a hospital system?
Having a road map to specifically address these concerns is the purpose of succession planning.
Succession planning is best handled with early, open and honest discussions between physician partners and even junior physicians. Advance planning allows a practice and center to identify the best candidates that it wants and needs. It also attracts the candidates that will help maintain stability of the business and fit within the culture of the practice and center. Ideally, physician partner succession planning should be a roughly two-year plan (see “Timeline to Succession”).
Physician recruitment can be a challenging, lengthy and potentially costly endeavor. Therefore, establishing an organized and ideally multi-option strategy for seeking viable candidates can increase the effectiveness of physician recruitment. Strategies should therefore utilize the resources and network of a competent ambulatory surgery center (ASC) management partner, industry trade publications, physician word of mouth, relationships with medical educational institutions, competent medical staffing and recruitment firms, and hospital partners.
Once a successor is identified and recruited, the practice and center requires time to train the new physician. Younger physicians and hospitalists may also need assistance and mentoring to adapt to the leaner, more efficient operations of ASCs.
During the period between the hiring of a new physician and the departure of a retiring physician, the practice and center should market the new physician to patients and primary care referral sources while announcing the retirement of the departing physician to show a seamless transition of patient care. An effective marketing strategy can be instrumental to the success of these transitions with a focus on stability.
Strong Physician Leader
When a strong physician leader retires, a center and practice also must consider the void that goes beyond the simple loss of patient
volume. A strong physician leader may play an important role in melding the clinical and business aspects of the practice or center. A physician leader can be a mentor to other physicians and facilitate consensus among physician partners. Strong leadership can help drive improvements in both center and practice productivity, efficiency and clinical outcomes.
A center and practice must thoughtfully identify the next generation of a physician leader. This is not a process to be handled in a three-month time frame. Simply choosing the most productive physician may result in burdening one of the business’s most productive members with administrative tasks that ultimately impact their productivity.
Tools for a Successful Succession
Succession planning can be an uncomfortable topic for many practices and organizations. However, it is part of a normal business life cycle. Open and honest conversations among stakeholders well ahead of separation events can allow for planning and even provide additional options for the physician to ease into retirement over time. By working with a strong management partner or advisors, the center and practice leverage tools for planning, recruitment and preparation for the succession event. The ultimate goal is to maintain stability of the business for all stakeholders as well as patients.
TJ BERDZIK is a Senior Financial Analyst at PE GI Solutions.
ADDITIONAL CONTRIBUTOR Bob Estes is the Senior Vice President, Operations, at PE GI Solutions. He has 30 years of broad-spectrum healthcare experience. He can be reached at firstname.lastname@example.org.