How to Destroy a Thriving Medical Practice
"I am a young (mid-30s) physician who has just completed his residency and wants to buy a suburban general medicine (internist) practice.
"I have been a fan of your YouTube videos for years and wonder if you have any advice for me -- not so much on how to buy the practice but how to keep the patients on board after I do."
First of all, let me congratulate you on making the difficult decision to become an internist; far too many young doctors are seduced by the siren call (and higher income) of specialty practices, to the point where in many parts of the country, there is a shortage of general practitioners.
This is an extremely timely message for me: I recently terminated my relationship with my personal care physician after almost 15 years. I had been a patient of the physician whose practice he acquired 15 years ago, and I stayed with the practice despite a very rocky transition in which I understand almost 50% of patients went elsewhere within a year.
Here are some of the things he did wrong which you should avoid.
He Didn't Have a Good Attorney Representing Him. He bought the practice without the assistance of an attorney experienced in business sales. By conceding too quickly to the seller's demand for an "all-cash" deal, he left the seller without any incentive to stick around, introduce patients to the new doctor and otherwise smooth the transition process.
There Was No Communication With the Patients. The seller's longtime patients were never notified of their doctor's retirement and became aware of it only when they called to schedule an appointment and a total stranger answered the phone. There was no letter from the retiring doctor announcing the sale and encouraging patients to stay with the new doctor.
He Changed Too Much, Too Fast. He fired the seller's office staff and moved the practice from a convenient ground-floor location (preferred by senior citizens) to a cramped office on the fifth floor of a nearby building with only one creaky elevator.
He Made His Spouse His Office Manager. To save money, he appointed his wife -- a nonpracticing lawyer with zero experience in managing a medical practice -- as the practice's office manager and hired only part-time nursing and office staff. Employee turnover soared, to the point where patients never saw the same nurse or physician's assistant more than once.
He Made Lifestyle Changes the Practice Couldn't Keep Up With. Shortly after buying the practice, he bought a $2 million house in a wealthy neighborhood and proceeded to have three children in almost as many years.