A growing number of dermatologists are selling their practices, with several factors driving this trend. If you currently own or are thinking of starting your own practice, understanding the current practice landscape, trends, and options can help you make the best-informed decisions for your and career.
The most prevalent reason for selling a practice is physician age. According to the American Medical Association, forty-four percent of dermatologists are aged 55 years or older. Many of these doctors have enjoyed the autonomy and independence of owning their own practice, making them skeptical and reluctant sellers. However, as they near retirement, the option to sell becomes far more attractive, driven by the desire to monetize one of their most valuable assets and to create a seamless transition for their patients and their teams.
Accelerating practice growth:
The modern challenges of running a dermatology practice can drive a physician to sell. Increasingly, there are a number of confident, entrepreneurial and ambitious dermatologists who have built up successful practices; retirement for these dermatologists is still in the distant future, so their age is certainly not an issue.
For many dermatologists the task of growing their practice is now more difficult than ever. It demands a significant investment in time, entails taking on additional risk, requires additional capital, necessitates new business skills, and increasingly requires a sacrifice of current income in the early stages.
Dermatologists will often times seek a partner who can help them accelerate the growth of their practice. This new partner may provide additional capital to build a new practice office, to buy new equipment in order to add new services to the practice, or to help fund start-up losses when new partners or advance practice nurses are added. Selling their practice often allows them to take some chips off the table, but at the same time it allows them to continue participating in the financial upside of a larger practice with an accelerated growth model and maintain a significant leadership voice.
Some physicians will start to feel weighed down by a heavy administrative burden, including tasks like deciding what insurance networks in which to participate, negotiating provider contacts with insurance companies, dealing with authorizations and approvals, managing billings and collections, and keeping up to date with new rules and regulations. Every year, keeping up with these activities becomes more cumbersome.
The continual march toward digitization creates new needs for information technology support. Picking, implementing, and supporting the right electronic health record takes specialized talent. New artificial intelligence solutions hold the promise of improved patient outcomes and reduced malpractice risk for doctors. But how do you pick the right artificial intelligence solutions, who pays for it, and how do you keep up with the rapidly changing environment? These are tough strategic questions that are hard to manage without specialized talent.
Recruiting great talent is becoming harder too. How do you find great talent in a tight labor market without settling on someone who is mediocre? There’s also the difficulty of finding and keeping quality staff members, in part because it’s becoming very expensive to offer an attractive benefits package and in part because of employee labor laws. With regulations continuing to evolve on all scales-federal, state, and local-it becomes more and more difficult to stay on top of changes.
CONTACT PRACTICE ADVISORS
Now that you have read some basic tips and things to consider you are ready to sell your practice. After you have found a place that meets your needs you will still need to make on offer, secure financing, sign the practice sale agreement and lease, and complete the purchase. As you can see a lot of important factors go into this decision. Make sure you are being properly advised. Practice Advisors 360 is the nation’s leading dental advisory company. Contact us today at (844) 360-8360 or visit us online at practiceadvisors360.com