• Passing the Torch: 5 Pearls for Buying A Retiring Physician’s Practice

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    In 2007, I finished my cornea fellowship at Baylor College of Medicine in Houston and purchased a practice from an older physician near Washington, D.C. This wasn’t a simple task. It was daunting. But by using the five pearls below, I was able to negotiate a strong contract and ensure that the practice transferred smoothly.

    #1 View the situation through their eyes

    Natasha L. Herz, MD
    Dr. Herz.

    The senior ophthalmologist I bought the practice from had always been solo, and ceding control to me wasn’t easy for him. Under our contractual agreement, he gradually cut back his clinic schedule and stopped operating, but during the first year, we both worked full time, together. Some days he was generous and kind, giving advice on how to grow the practice and create a synergistic relationship with the hospital. But on other days he was surly, combing the day’s schedule for long-term patients he felt were his and not mine.

    When these patients switched their care to me, he went to the front-desk staff behind my back, asking why I was seeing “his” patients. Ironically, they were all mine since I had already purchased the practice and was the sole owner. This reality didn’t hit home to him until he cut back his hours and the patients began to transfer to me. It’s harder for the heart to accept the business side of practice, especially when you’ve developed a deep relationship with patients over many years.

    I had other challenges, too. When I got pregnant with my first child a few months after we finalized the purchase, the doctor I bought the practice from reacted as if it were a breach of our contract. As the owner of a solo practice you don’t get maternity leave anyway, but on top of planning for how to minimize the impact on patients and handling the ordinary stress of a first pregnancy, I also had to deal with the selling doctor’s talk about renegotiating our contract even though we’d already signed it.

    For me, the key to understanding his motives and responding to the difficult interactions was to remember that this was his life’s work. Letting go was emotional for him, and I needed to keep that in mind. He was their doctor, but for many people he’d also become something more than that.

    #2 Keep your own emotions to a minimum

    When negotiating your contract, don’t take things personally. It’s just business! But when the negotiations cost you tens of thousands in legal fees, it’s difficult to keep feelings from clouding your judgment.

    For example, never send an email in the heat of the moment. Write it out, save it and read it in the morning. Better yet, have a trusted friend or your significant other read it and edit out the harsh words. Cooler heads will prevail.

    I also made a point to never say anything to patients about the other doctor, despite the challenges I faced. When they would gush to me about how wonderful he was and how much they loved him, I would just nod and smile and say something like, “I’m glad you had a good relationship with him. I’ll give you the best care I can, too.”

    #3 Specify important dates in the contract to prevent surprises

    During negotiations with the senior ophthalmologist, we wrote down the exact dates for three of the most important events: when he would stop operating, when he would cut back his clinic days and when he would fully retire. Otherwise, our transfer might not have happened. After signing the contract, he tried multiple times to change those dates. He was struggling to accept the fact that he was actually retiring, but our contract was solid and binding.

    #4 Make it mutually beneficial

    One of the smartest things we did in the contract was to make the senior ophthalmologist my lender. Thus if I wasn’t successful, he wouldn’t get paid. Because we set up the buy-out that way, he had a vested interest in my success, beyond any “goodwill.”

    #5 Stay friends

    As with all business endeavors, goodwill can quickly disappear when money is involved. But it’s both valuable and rewarding to maintain a good relationship with the ophthalmologist you’re succeeding. Remember that someday you’ll be in their shoes. So cut them some slack, show respect and hold steady!

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    Natasha L. Herz, MDAbout the author: Natasha L. Herz, MD, is a cataract, corneal and refractive surgeon in solo practice near Washington, D.C. A member of the Academy’s Leadership Development Program XIX, class of 2017, she serves on the Academy’s communication secretariat and chaired the YO Info editorial board from 2012 to 2016.