Recently, a reporter for the Wall Street Journal spoke to Wealth Dimensions co-founder, Doug Loftus, about what physicians should consider when evaluating whether to sell a practice or remain independent? In the article, “When a Doctor Eyes Selling the Practice” (WSJ, Feb. 24, 2014), Doug discusses the challenges and options for physicians nearing retirement and looking at their options.
For physicians within three to five years from retirement, Doug talks about how to evaluate various scenarios. Many physicians may be in a good financial position, but not quite where they need to be for retirement. They are approached by hospital systems with an offer to sell their practices. In these situations, Doug helps these physicians weigh all of the options. Physicians must consider the complete picture and the challenges, which can include shrinking insurance, hefty investments in electronic medical records (EMR) systems, stagnant Medicare reimbursements and increases in staffing costs. All of these issues are factored into the equation.
As a financial advisor with knowledge of the health care industry, Doug understands the complexity of the situation and the risks. His firm starts by analyzing the client’s expenses and determining how much they need to live comfortably in retirement. Then, he develops different scenarios with projections of revenue, expenses and personal income. These scenarios may include: keeping the independent practice, selling the practice to a hospital, and possibly, a third option, switching to a concierge model. Doug works with physicians to evaluate each one in terms of the financial impact, the risks and the fit with the physician’s lifestyle. By considering these options within this context, the choices are put into perspective giving the physicians the ability to make choices that they are comfortable with and fit with their longer term goals.
In the end, it’s not only about finding the solution with largest financial payoff, but balancing that with personal and professional goals. It’s about finding the quality of life that suits the client. For more details, you can find the full article on the Wall Street Journal website (requires subscription to view) or contact Wealth Dimensions for additional information.