The Office

The following scenario was discussed during a forum at a meeting recently:

Two employees managing the front desk are clock watchers, always the first to leave at 11:59 a.m. for lunch and at 4:59 p.m. for the end of the day no matter what is happening. This leaves the other employees stuck with their work.

I have seen clock watching often enough to know that it is widely practiced, and widely reviled by coworkers and managers alike. Generally, clock watchers — sometimes referred to in modern parlance as “quiet quitters” — radiate a palpable sense of “I don’t want to be here.”

Physicians typically can’t identify with clock watching behavior, because we learned early on that patient-care tasks must be pursued to completion; if that involves working past the usual “quitting time,” so be it. So your first task in dealing with this problem is to determine its cause. The clock watcher label may be unfair. There may be legitimate reasons for certain employees to leave work at precisely 4:59 every day. Perhaps they must pick up children, or they have a second job to get to. The label usually comes from a pattern of consistent, repeated behavior. And if more than one employee is exhibiting the same behavior in the same office, the likelihood of a valid explanation decreases proportionally.

5_Oclock_1044529556_web.jpg

A common cause of clock watching is a lack of employees’ commitment to their jobs. They don’t see the point in putting in extra effort, so they run out the door as soon as possible. There are many reasons why this might be the case. For example, the workload in your office may be too large to be accomplished in the time available by the number of people you employ. The solution might be to simply hire additional personnel.

Another common cause is a lack of communication between physicians, managers, and lower-level employees. If staffers are raising concerns or potential solutions, and management is not listening to their opinions or ideas, they will stop offering them. Alternatively, other staff members may not be pulling their weight. When there is a large imbalance in the contribution of team members, the higher performers will stop trying.

Eastern _Joseph_S_web.jpg

Over my 40 plus years in practice, I have had my share of clock watchers. I try the best I can not to let employees’ time commitment practices impact my valuation of their work. I always attempt to focus on quality and productivity. It isn’t easy, but I always try to address the issues behind clock watching behavior. As such, I can’t recall ever having to fire anyone for clock watching. Here are some of the strategies that have worked for me over the years:

1. Set clear expectations. Clearly communicate job responsibilities and expectations regarding time management and patient care. Ensure that all staff understand the importance of dedicating the necessary time to each patient, regardless of the time of day.

2. Foster a patient-centered culture. Cultivate a work environment that prioritizes patient care above all. This can help shift the focus from watching the clock to ensuring high-quality patient care.

3. Provide adequate breaks. Ensure that staff schedules include sufficient breaks. Overworked staff are more likely to watch the clock. Adequate rest periods can help alleviate this issue.

4. Offer flexibility where possible. If feasible, offer some degree of scheduling flexibility. This can help staff manage their personal time more effectively, potentially reducing the tendency to watch the clock.

5. Implement time management training. Offer training sessions focused on time management and efficiency. This can help staff manage their duties more effectively, reducing the need to constantly check the time.

[embed:render:related:node:267481]

6. Encourage open communication. Create an environment where staff feel comfortable discussing their concerns, including issues related to workload and time management. This can help identify and address specific factors contributing to clock watching.

7. Monitor and provide feedback. Regularly monitor staff performance and provide constructive feedback. If clock watching is observed, discuss it directly with the employee, focusing on the impact on patient care and the work environment.

8. Recognize and reward. Acknowledge and reward staff who consistently provide high-quality care and demonstrate effective time management. Recognition can motivate others to adjust their behavior.

9. Evaluate workloads. Regularly assess staff workloads to ensure they are manageable. Overburdened employees are more likely to engage in clock watching.

10. Lead by example. Management should model the behavior they wish to see in their staff. Demonstrating a commitment to patient care and effective time management can set a positive example.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

The following scenario was discussed during a forum at a meeting recently:

Two employees managing the front desk are clock watchers, always the first to leave at 11:59 a.m. for lunch and at 4:59 p.m. for the end of the day no matter what is happening. This leaves the other employees stuck with their work.

I have seen clock watching often enough to know that it is widely practiced, and widely reviled by coworkers and managers alike. Generally, clock watchers — sometimes referred to in modern parlance as “quiet quitters” — radiate a palpable sense of “I don’t want to be here.”

Physicians typically can’t identify with clock watching behavior, because we learned early on that patient-care tasks must be pursued to completion; if that involves working past the usual “quitting time,” so be it. So your first task in dealing with this problem is to determine its cause. The clock watcher label may be unfair. There may be legitimate reasons for certain employees to leave work at precisely 4:59 every day. Perhaps they must pick up children, or they have a second job to get to. The label usually comes from a pattern of consistent, repeated behavior. And if more than one employee is exhibiting the same behavior in the same office, the likelihood of a valid explanation decreases proportionally.

5_Oclock_1044529556_web.jpg

A common cause of clock watching is a lack of employees’ commitment to their jobs. They don’t see the point in putting in extra effort, so they run out the door as soon as possible. There are many reasons why this might be the case. For example, the workload in your office may be too large to be accomplished in the time available by the number of people you employ. The solution might be to simply hire additional personnel.

Another common cause is a lack of communication between physicians, managers, and lower-level employees. If staffers are raising concerns or potential solutions, and management is not listening to their opinions or ideas, they will stop offering them. Alternatively, other staff members may not be pulling their weight. When there is a large imbalance in the contribution of team members, the higher performers will stop trying.

Eastern _Joseph_S_web.jpg

Over my 40 plus years in practice, I have had my share of clock watchers. I try the best I can not to let employees’ time commitment practices impact my valuation of their work. I always attempt to focus on quality and productivity. It isn’t easy, but I always try to address the issues behind clock watching behavior. As such, I can’t recall ever having to fire anyone for clock watching. Here are some of the strategies that have worked for me over the years:

1. Set clear expectations. Clearly communicate job responsibilities and expectations regarding time management and patient care. Ensure that all staff understand the importance of dedicating the necessary time to each patient, regardless of the time of day.

2. Foster a patient-centered culture. Cultivate a work environment that prioritizes patient care above all. This can help shift the focus from watching the clock to ensuring high-quality patient care.

3. Provide adequate breaks. Ensure that staff schedules include sufficient breaks. Overworked staff are more likely to watch the clock. Adequate rest periods can help alleviate this issue.

4. Offer flexibility where possible. If feasible, offer some degree of scheduling flexibility. This can help staff manage their personal time more effectively, potentially reducing the tendency to watch the clock.

5. Implement time management training. Offer training sessions focused on time management and efficiency. This can help staff manage their duties more effectively, reducing the need to constantly check the time.

[embed:render:related:node:267481]

6. Encourage open communication. Create an environment where staff feel comfortable discussing their concerns, including issues related to workload and time management. This can help identify and address specific factors contributing to clock watching.

7. Monitor and provide feedback. Regularly monitor staff performance and provide constructive feedback. If clock watching is observed, discuss it directly with the employee, focusing on the impact on patient care and the work environment.

8. Recognize and reward. Acknowledge and reward staff who consistently provide high-quality care and demonstrate effective time management. Recognition can motivate others to adjust their behavior.

9. Evaluate workloads. Regularly assess staff workloads to ensure they are manageable. Overburdened employees are more likely to engage in clock watching.

10. Lead by example. Management should model the behavior they wish to see in their staff. Demonstrating a commitment to patient care and effective time management can set a positive example.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

The following scenario was discussed during a forum at a meeting recently:

Two employees managing the front desk are clock watchers, always the first to leave at 11:59 a.m. for lunch and at 4:59 p.m. for the end of the day no matter what is happening. This leaves the other employees stuck with their work.

I have seen clock watching often enough to know that it is widely practiced, and widely reviled by coworkers and managers alike. Generally, clock watchers — sometimes referred to in modern parlance as “quiet quitters” — radiate a palpable sense of “I don’t want to be here.”

Physicians typically can’t identify with clock watching behavior, because we learned early on that patient-care tasks must be pursued to completion; if that involves working past the usual “quitting time,” so be it. So your first task in dealing with this problem is to determine its cause. The clock watcher label may be unfair. There may be legitimate reasons for certain employees to leave work at precisely 4:59 every day. Perhaps they must pick up children, or they have a second job to get to. The label usually comes from a pattern of consistent, repeated behavior. And if more than one employee is exhibiting the same behavior in the same office, the likelihood of a valid explanation decreases proportionally.

5_Oclock_1044529556_web.jpg

A common cause of clock watching is a lack of employees’ commitment to their jobs. They don’t see the point in putting in extra effort, so they run out the door as soon as possible. There are many reasons why this might be the case. For example, the workload in your office may be too large to be accomplished in the time available by the number of people you employ. The solution might be to simply hire additional personnel.

Another common cause is a lack of communication between physicians, managers, and lower-level employees. If staffers are raising concerns or potential solutions, and management is not listening to their opinions or ideas, they will stop offering them. Alternatively, other staff members may not be pulling their weight. When there is a large imbalance in the contribution of team members, the higher performers will stop trying.

Eastern _Joseph_S_web.jpg

Over my 40 plus years in practice, I have had my share of clock watchers. I try the best I can not to let employees’ time commitment practices impact my valuation of their work. I always attempt to focus on quality and productivity. It isn’t easy, but I always try to address the issues behind clock watching behavior. As such, I can’t recall ever having to fire anyone for clock watching. Here are some of the strategies that have worked for me over the years:

1. Set clear expectations. Clearly communicate job responsibilities and expectations regarding time management and patient care. Ensure that all staff understand the importance of dedicating the necessary time to each patient, regardless of the time of day.

2. Foster a patient-centered culture. Cultivate a work environment that prioritizes patient care above all. This can help shift the focus from watching the clock to ensuring high-quality patient care.

3. Provide adequate breaks. Ensure that staff schedules include sufficient breaks. Overworked staff are more likely to watch the clock. Adequate rest periods can help alleviate this issue.

4. Offer flexibility where possible. If feasible, offer some degree of scheduling flexibility. This can help staff manage their personal time more effectively, potentially reducing the tendency to watch the clock.

5. Implement time management training. Offer training sessions focused on time management and efficiency. This can help staff manage their duties more effectively, reducing the need to constantly check the time.

[embed:render:related:node:267481]

6. Encourage open communication. Create an environment where staff feel comfortable discussing their concerns, including issues related to workload and time management. This can help identify and address specific factors contributing to clock watching.

7. Monitor and provide feedback. Regularly monitor staff performance and provide constructive feedback. If clock watching is observed, discuss it directly with the employee, focusing on the impact on patient care and the work environment.

8. Recognize and reward. Acknowledge and reward staff who consistently provide high-quality care and demonstrate effective time management. Recognition can motivate others to adjust their behavior.

9. Evaluate workloads. Regularly assess staff workloads to ensure they are manageable. Overburdened employees are more likely to engage in clock watching.

10. Lead by example. Management should model the behavior they wish to see in their staff. Demonstrating a commitment to patient care and effective time management can set a positive example.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recently,  the results of a survey of consumers regarding their health care experiences were reported by Carta Healthcare. As you might expect, a top complaint about doctors was time spent waiting to see them; 23% said they waited 30 minutes or longer. I’ve written about punctuality before, but this is such a ubiquitous problem that it bears repeating. Here are some suggestions:

Eastern _Joseph_S_web.jpg

Start on time. That seems obvious, but I’m always amazed at the number of doctors who admit to running late who also admit that they start late. If you’re in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem! If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Pay attention to patient arrival times if your EHR records them, and step up your pace if you start to fall behind. If your EHR does not record arrival times or you are still using paper records, buy a time clock and have your receptionist time-stamp the “encounter form” that goes to the back with the patient. One glance at the stamp will tell you exactly how long that patient has been waiting.

Schedule all surgeries. If you haven’t scheduled the time necessary for a surgical procedure, don’t do it. It’s frequently tempting to “squeeze in” an excision, often because you feel guilty that the patient has already had to wait for you. But every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes. Tell the patient that surgery requires extra time and it can’t be rushed, so you will have to schedule that time.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients. That may seem counterintuitive; receptionists often assume it’s better to squeeze them in early, while you’re still running on time. But doing that guarantees you will run late, and it isn’t fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell them, “Our schedule is full today; but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know the list I mean. “Number 16: My right big toe itches. Number 17: I think I feel something on my back. Number 18: This weird chartreuse thing on my arm ...” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems, and address them. For the rest, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

[embed:render:related:node:260639]

Ask if you can place the list (or a photocopy) in the patient’s chart. (It is, after all, important clinical information.) All of these problems are important to the patient and should be addressed – but on your schedule, not the patient’s.

Avoid interruptions. Especially phone calls. Unless it’s an emergency or an immediate family member, my receptionists say, “I’m sorry, the doctor is with patients. May I take a message?” Everyone – even other physicians – understands. But be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

There will be times, of course, when you run late. But these should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give nearly every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, other common patient complaints in that survey were the following:

• Couldn’t schedule an appointment within a week.
• Spent too little time with me.
• Didn’t provide test results promptly.
• Didn’t respond to my phone calls promptly.

Now would be an excellent opportunity to identify and address any of those problems as well.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recently,  the results of a survey of consumers regarding their health care experiences were reported by Carta Healthcare. As you might expect, a top complaint about doctors was time spent waiting to see them; 23% said they waited 30 minutes or longer. I’ve written about punctuality before, but this is such a ubiquitous problem that it bears repeating. Here are some suggestions:

Eastern _Joseph_S_web.jpg

Start on time. That seems obvious, but I’m always amazed at the number of doctors who admit to running late who also admit that they start late. If you’re in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem! If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Pay attention to patient arrival times if your EHR records them, and step up your pace if you start to fall behind. If your EHR does not record arrival times or you are still using paper records, buy a time clock and have your receptionist time-stamp the “encounter form” that goes to the back with the patient. One glance at the stamp will tell you exactly how long that patient has been waiting.

Schedule all surgeries. If you haven’t scheduled the time necessary for a surgical procedure, don’t do it. It’s frequently tempting to “squeeze in” an excision, often because you feel guilty that the patient has already had to wait for you. But every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes. Tell the patient that surgery requires extra time and it can’t be rushed, so you will have to schedule that time.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients. That may seem counterintuitive; receptionists often assume it’s better to squeeze them in early, while you’re still running on time. But doing that guarantees you will run late, and it isn’t fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell them, “Our schedule is full today; but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know the list I mean. “Number 16: My right big toe itches. Number 17: I think I feel something on my back. Number 18: This weird chartreuse thing on my arm ...” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems, and address them. For the rest, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

[embed:render:related:node:260639]

Ask if you can place the list (or a photocopy) in the patient’s chart. (It is, after all, important clinical information.) All of these problems are important to the patient and should be addressed – but on your schedule, not the patient’s.

Avoid interruptions. Especially phone calls. Unless it’s an emergency or an immediate family member, my receptionists say, “I’m sorry, the doctor is with patients. May I take a message?” Everyone – even other physicians – understands. But be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

There will be times, of course, when you run late. But these should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give nearly every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, other common patient complaints in that survey were the following:

• Couldn’t schedule an appointment within a week.
• Spent too little time with me.
• Didn’t provide test results promptly.
• Didn’t respond to my phone calls promptly.

Now would be an excellent opportunity to identify and address any of those problems as well.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recently,  the results of a survey of consumers regarding their health care experiences were reported by Carta Healthcare. As you might expect, a top complaint about doctors was time spent waiting to see them; 23% said they waited 30 minutes or longer. I’ve written about punctuality before, but this is such a ubiquitous problem that it bears repeating. Here are some suggestions:

Eastern _Joseph_S_web.jpg

Start on time. That seems obvious, but I’m always amazed at the number of doctors who admit to running late who also admit that they start late. If you’re in the hole before you even start, you can seldom dig yourself out. Sometimes an on-time start is the solution to the entire problem! If you doubt me, try it.

Book realistically. Everyone works at a different pace. Determine the number of patients you can comfortably see in an hour, and book only that number. If you want to see more patients, the solution is working longer hours or hiring physicians or physician extenders (or both), not overloading your schedule.

Time-stamp each chart. Pay attention to patient arrival times if your EHR records them, and step up your pace if you start to fall behind. If your EHR does not record arrival times or you are still using paper records, buy a time clock and have your receptionist time-stamp the “encounter form” that goes to the back with the patient. One glance at the stamp will tell you exactly how long that patient has been waiting.

Schedule all surgeries. If you haven’t scheduled the time necessary for a surgical procedure, don’t do it. It’s frequently tempting to “squeeze in” an excision, often because you feel guilty that the patient has already had to wait for you. But every unscheduled surgery puts you that much further behind. And hurrying through a procedure increases the risk of mistakes. Tell the patient that surgery requires extra time and it can’t be rushed, so you will have to schedule that time.

Work-ins come last, not first. Patients with urgent problems should be seen after scheduled patients. That may seem counterintuitive; receptionists often assume it’s better to squeeze them in early, while you’re still running on time. But doing that guarantees you will run late, and it isn’t fair to patients who have appointments and expect to be seen promptly.

Work-ins, on the other hand, expect a wait because they have no appointment. We tell them, “Our schedule is full today; but if you come at the end of hours, the doctor will see you. But you may have a wait.” Far from complaining, they invariably thank us for seeing them.

Seize the list. You know the list I mean. “Number 16: My right big toe itches. Number 17: I think I feel something on my back. Number 18: This weird chartreuse thing on my arm ...” One long list can leave an entire half-day schedule in shambles.

When a list is produced, the best option is to take it and read it yourself. Identify the most important two or three problems, and address them. For the rest, I will say, “This group of problems deserves a visit of its own, and we will schedule that visit.”

[embed:render:related:node:260639]

Ask if you can place the list (or a photocopy) in the patient’s chart. (It is, after all, important clinical information.) All of these problems are important to the patient and should be addressed – but on your schedule, not the patient’s.

Avoid interruptions. Especially phone calls. Unless it’s an emergency or an immediate family member, my receptionists say, “I’m sorry, the doctor is with patients. May I take a message?” Everyone – even other physicians – understands. But be sure to return those calls promptly.

Pharmaceutical reps should not be allowed to interrupt you, either. Have them make an appointment, just like everybody else.

There will be times, of course, when you run late. But these should be the exception rather than the rule. By streamlining your procedures and avoiding the pitfalls mentioned, you can give nearly every patient all the time he or she deserves without keeping the next patient waiting.

Incidentally, other common patient complaints in that survey were the following:

• Couldn’t schedule an appointment within a week.
• Spent too little time with me.
• Didn’t provide test results promptly.
• Didn’t respond to my phone calls promptly.

Now would be an excellent opportunity to identify and address any of those problems as well.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Every year, during the relatively slow winter-months period, I like to take a tour of my office from the paradigm of a patient visiting our facility for the first time. When was the last time you did a comprehensive inspection, looking for problems that your patients might see?

We tend not to notice gradual deterioration in the workplace we inhabit every day: Carpets fade and dull with constant traffic and cleaning; wallpaper and paint accumulate dirt, stains, and damage; furniture gets dirty and dented, fabric rips, hardware goes missing; laminate peels off the edges of desks and cabinets.

When did you last take a good look at your waiting room? How clean is it? Patients expect cleanliness in doctor’s offices, and they expect the reception area to be neat. How are the carpeting and upholstery holding up? Sit in your chairs; how do they feel? Patients don’t appreciate a sore back or bottom from any chairs, especially in a medical office. Consider investing in new furniture that will be attractive and comfortable for your patients.

Eastern _Joseph_S_web.jpg

Look at the decor itself; is it dated or just plain “old-looking?” Any interior designer will tell you they can determine quite accurately when a space was last decorated, simply by the color and style of the materials used. If your office is stuck in the ‘90s, it’s probably time for a change. Even if you don’t find anything obvious, it’s wise to check periodically for subtle evidence of age: Find some patches of protected carpeting and flooring under stationary furniture and compare them to exposed floors.

If your color scheme is hopelessly out of date and style, or if you are just tired of it, change it. Wallpaper and carpeting should be long-wearing industrial quality; paint should be high-quality “eggshell” finish to facilitate cleaning, and everything should be professionally applied. (This is neither the time nor place for do-it-yourself experiments.) Consider updating your overhead lighting. The harsh glow of fluorescent lights amid an uninspired decor creates a sterile, uninviting atmosphere.

During renovation, get your building’s maintenance crew to fix any nagging plumbing, electrical, or heating/air conditioning problems while pipes, ducts, and wires are more readily accessible. This is also a good time to clear out old textbooks, journals, and files that you will never open again, in this digital age.

If your wall decorations are dated and unattractive, now would be a good time to replace at least some of them. This need not be an expensive proposition; a few years ago, I redecorated my exam room walls with framed photos from my travel adventures – to very positive responses from patients and staff alike. If you’re not an artist or photographer, invite a family member, or local artists or talented patients, to display some of their creations on your walls. If you get too many contributions, you can rotate them on a periodic basis.

[embed:render:related:node:56501]

Plants are great aesthetic accents, yet many offices have little or no plant life. Plants naturally aerate an office suite and help make it feel less stuffy. Also, multiple studies have found that plants promote productivity among office staff and create a sense of calm for apprehensive patients. Improvements like this can make a big difference. They show an attention to detail and a willingness to make your practice as inviting as possible for patients and employees alike.

Spruce-up time is also an excellent opportunity to inventory your medical equipment. We’ve all seen “vintage” offices full of gadgets that were state-of-the-art decades ago. Nostalgia is nice; but would you want to be treated by a physician whose office could be a Smithsonian exhibit titled, “Doctor’s Office Circa 1975?” Neither would your patients, for the most part; many – particularly younger ones – assume that doctors who don’t keep up with technological innovations don’t keep up with anything else, either.

If you’re planning a vacation this year (and I hope you are), that would be the perfect time for a re-do. Your patients will be spared the dust and turmoil, tradespeople won’t have to work around your office hours, and you won’t have to cancel any hours that weren’t already canceled. Best of all, you’ll come back to a clean, fresh environment.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Every year, during the relatively slow winter-months period, I like to take a tour of my office from the paradigm of a patient visiting our facility for the first time. When was the last time you did a comprehensive inspection, looking for problems that your patients might see?

We tend not to notice gradual deterioration in the workplace we inhabit every day: Carpets fade and dull with constant traffic and cleaning; wallpaper and paint accumulate dirt, stains, and damage; furniture gets dirty and dented, fabric rips, hardware goes missing; laminate peels off the edges of desks and cabinets.

When did you last take a good look at your waiting room? How clean is it? Patients expect cleanliness in doctor’s offices, and they expect the reception area to be neat. How are the carpeting and upholstery holding up? Sit in your chairs; how do they feel? Patients don’t appreciate a sore back or bottom from any chairs, especially in a medical office. Consider investing in new furniture that will be attractive and comfortable for your patients.

Eastern _Joseph_S_web.jpg

Look at the decor itself; is it dated or just plain “old-looking?” Any interior designer will tell you they can determine quite accurately when a space was last decorated, simply by the color and style of the materials used. If your office is stuck in the ‘90s, it’s probably time for a change. Even if you don’t find anything obvious, it’s wise to check periodically for subtle evidence of age: Find some patches of protected carpeting and flooring under stationary furniture and compare them to exposed floors.

If your color scheme is hopelessly out of date and style, or if you are just tired of it, change it. Wallpaper and carpeting should be long-wearing industrial quality; paint should be high-quality “eggshell” finish to facilitate cleaning, and everything should be professionally applied. (This is neither the time nor place for do-it-yourself experiments.) Consider updating your overhead lighting. The harsh glow of fluorescent lights amid an uninspired decor creates a sterile, uninviting atmosphere.

During renovation, get your building’s maintenance crew to fix any nagging plumbing, electrical, or heating/air conditioning problems while pipes, ducts, and wires are more readily accessible. This is also a good time to clear out old textbooks, journals, and files that you will never open again, in this digital age.

If your wall decorations are dated and unattractive, now would be a good time to replace at least some of them. This need not be an expensive proposition; a few years ago, I redecorated my exam room walls with framed photos from my travel adventures – to very positive responses from patients and staff alike. If you’re not an artist or photographer, invite a family member, or local artists or talented patients, to display some of their creations on your walls. If you get too many contributions, you can rotate them on a periodic basis.

[embed:render:related:node:56501]

Plants are great aesthetic accents, yet many offices have little or no plant life. Plants naturally aerate an office suite and help make it feel less stuffy. Also, multiple studies have found that plants promote productivity among office staff and create a sense of calm for apprehensive patients. Improvements like this can make a big difference. They show an attention to detail and a willingness to make your practice as inviting as possible for patients and employees alike.

Spruce-up time is also an excellent opportunity to inventory your medical equipment. We’ve all seen “vintage” offices full of gadgets that were state-of-the-art decades ago. Nostalgia is nice; but would you want to be treated by a physician whose office could be a Smithsonian exhibit titled, “Doctor’s Office Circa 1975?” Neither would your patients, for the most part; many – particularly younger ones – assume that doctors who don’t keep up with technological innovations don’t keep up with anything else, either.

If you’re planning a vacation this year (and I hope you are), that would be the perfect time for a re-do. Your patients will be spared the dust and turmoil, tradespeople won’t have to work around your office hours, and you won’t have to cancel any hours that weren’t already canceled. Best of all, you’ll come back to a clean, fresh environment.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Every year, during the relatively slow winter-months period, I like to take a tour of my office from the paradigm of a patient visiting our facility for the first time. When was the last time you did a comprehensive inspection, looking for problems that your patients might see?

We tend not to notice gradual deterioration in the workplace we inhabit every day: Carpets fade and dull with constant traffic and cleaning; wallpaper and paint accumulate dirt, stains, and damage; furniture gets dirty and dented, fabric rips, hardware goes missing; laminate peels off the edges of desks and cabinets.

When did you last take a good look at your waiting room? How clean is it? Patients expect cleanliness in doctor’s offices, and they expect the reception area to be neat. How are the carpeting and upholstery holding up? Sit in your chairs; how do they feel? Patients don’t appreciate a sore back or bottom from any chairs, especially in a medical office. Consider investing in new furniture that will be attractive and comfortable for your patients.

Eastern _Joseph_S_web.jpg

Look at the decor itself; is it dated or just plain “old-looking?” Any interior designer will tell you they can determine quite accurately when a space was last decorated, simply by the color and style of the materials used. If your office is stuck in the ‘90s, it’s probably time for a change. Even if you don’t find anything obvious, it’s wise to check periodically for subtle evidence of age: Find some patches of protected carpeting and flooring under stationary furniture and compare them to exposed floors.

If your color scheme is hopelessly out of date and style, or if you are just tired of it, change it. Wallpaper and carpeting should be long-wearing industrial quality; paint should be high-quality “eggshell” finish to facilitate cleaning, and everything should be professionally applied. (This is neither the time nor place for do-it-yourself experiments.) Consider updating your overhead lighting. The harsh glow of fluorescent lights amid an uninspired decor creates a sterile, uninviting atmosphere.

During renovation, get your building’s maintenance crew to fix any nagging plumbing, electrical, or heating/air conditioning problems while pipes, ducts, and wires are more readily accessible. This is also a good time to clear out old textbooks, journals, and files that you will never open again, in this digital age.

If your wall decorations are dated and unattractive, now would be a good time to replace at least some of them. This need not be an expensive proposition; a few years ago, I redecorated my exam room walls with framed photos from my travel adventures – to very positive responses from patients and staff alike. If you’re not an artist or photographer, invite a family member, or local artists or talented patients, to display some of their creations on your walls. If you get too many contributions, you can rotate them on a periodic basis.

[embed:render:related:node:56501]

Plants are great aesthetic accents, yet many offices have little or no plant life. Plants naturally aerate an office suite and help make it feel less stuffy. Also, multiple studies have found that plants promote productivity among office staff and create a sense of calm for apprehensive patients. Improvements like this can make a big difference. They show an attention to detail and a willingness to make your practice as inviting as possible for patients and employees alike.

Spruce-up time is also an excellent opportunity to inventory your medical equipment. We’ve all seen “vintage” offices full of gadgets that were state-of-the-art decades ago. Nostalgia is nice; but would you want to be treated by a physician whose office could be a Smithsonian exhibit titled, “Doctor’s Office Circa 1975?” Neither would your patients, for the most part; many – particularly younger ones – assume that doctors who don’t keep up with technological innovations don’t keep up with anything else, either.

If you’re planning a vacation this year (and I hope you are), that would be the perfect time for a re-do. Your patients will be spared the dust and turmoil, tradespeople won’t have to work around your office hours, and you won’t have to cancel any hours that weren’t already canceled. Best of all, you’ll come back to a clean, fresh environment.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Of all the headaches inherent in a private medical practice, few are more frustrating than patients who make appointments and then fail to keep them.

No-shows are a problem for all physicians, but especially for dermatologists. In one study, the no-show rate in dermatology offices averaged 10% – almost double the average for all medical offices.

Eastern _Joseph_S_web.jpg

The problem has become so pervasive that many physicians are now charging a fee for missed appointments. I have never been a fan of such fees for a variety of reasons, starting with the anger and bad will that they engender; but also, in my experience, they seldom accomplish their intended goal of changing the behavior.

That’s because fees imply some sort of conscious decision made by a patient to miss an appointment, but studies show that this is rarely the case. Some patients cite transportation issues or childcare obligations. One Canadian study found that nearly a quarter of patients who missed an appointment felt too sick to keep it. Another reason is lack of insurance coverage. Studies have shown that the no-show rate is far higher when the patient is paying out-of-pocket for the visit.

Patients who don’t show up for appointments tend to be younger and poorer, and live farther away from the office than those who attend consistently. Some patients may be unaware that they need to cancel, while others report that they don’t feel obliged to keep appointments because they feel disrespected by the system. One person posted on a medical forum, “Everyone’s time is valuable. When the doctor makes me wait, there are consequences too. Why are there two standards in the situation?”

The most common reason for missed appointments, however, according to multiple studies, is that patients simply forget that they have one. One reason for that is a lag between appointment and visit. Many dermatologists are booked well in advance; by the time the appointment arrives, some patients’ complaints will have resolved spontaneously, while other patients will have found another office willing to see them sooner.

Another big reason is the absence of a strong physician-patient relationship. Perhaps the patient sees a different doctor or physician assistant at each visit and doesn’t feel a particular bond with any of them. Some patients may perceive a lack of concern on the part of the physician. And others may suffer from poor communication; for example, patients frequently become frustrated that a chronic condition has not resolved, when it has not been clearly explained to them that such problems cannot be expected to resolve rapidly or completely.

Whatever the reasons, no-shows are an economic and medicolegal liability. It is worth the considerable effort it often takes to minimize them.

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Research suggests that no-show rates can be reduced by providing more same-day or next-day appointments. One large-scale analysis of national data found that same-day appointments accounted for just 2% of no-shows, while appointments booked 15 days or more in advance accounted for nearly a third of them. Canadian studies have likewise found the risk of no-shows increases the further in advance clinics book patients.

Deal with simple forgetfulness by calling your patients the day before to remind them of their appointments. Reasonably priced phone software is available from a variety of vendors to automate this process. Or hire a teenager to do it after school each day.

Whenever possible, use cellphone numbers for reminder calls. Patients often aren’t home during the day, and many don’t listen to their messages when they come in. And patients who have moved will often have a new home phone number, but their cellphone number will be the same.

Decrease the wait for new appointments. Keep some slots open each week for new patients, who will often “shop around” for a faster appointment while they’re waiting for an appointment they already have elsewhere.

But above all, seek to maximize the strength of your physician-patient relationships. Try not to shuttle patients between different physicians or PAs, and make it clear that you are genuinely concerned about their health. Impress upon them the crucial role they play in their own care, which includes keeping all their appointments.

In our office, significant no-shows (for example, a patient with a melanoma who misses a follow-up visit) receive a phone call and a certified letter, and their records go into a special file for close follow-up by the nursing staff.

If you choose to go the missed-appointment-fee route, be sure to post notices in your office and on your website clearly delineating your policy. Emphasize that it is not a service fee, and cannot be billed to insurance.

All missed appointments should be documented in the patient’s record; it’s important clinical and medicolegal information. And habitual no-shows should be dismissed from your practice. You cannot afford them.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Of all the headaches inherent in a private medical practice, few are more frustrating than patients who make appointments and then fail to keep them.

No-shows are a problem for all physicians, but especially for dermatologists. In one study, the no-show rate in dermatology offices averaged 10% – almost double the average for all medical offices.

Eastern _Joseph_S_web.jpg

The problem has become so pervasive that many physicians are now charging a fee for missed appointments. I have never been a fan of such fees for a variety of reasons, starting with the anger and bad will that they engender; but also, in my experience, they seldom accomplish their intended goal of changing the behavior.

That’s because fees imply some sort of conscious decision made by a patient to miss an appointment, but studies show that this is rarely the case. Some patients cite transportation issues or childcare obligations. One Canadian study found that nearly a quarter of patients who missed an appointment felt too sick to keep it. Another reason is lack of insurance coverage. Studies have shown that the no-show rate is far higher when the patient is paying out-of-pocket for the visit.

Patients who don’t show up for appointments tend to be younger and poorer, and live farther away from the office than those who attend consistently. Some patients may be unaware that they need to cancel, while others report that they don’t feel obliged to keep appointments because they feel disrespected by the system. One person posted on a medical forum, “Everyone’s time is valuable. When the doctor makes me wait, there are consequences too. Why are there two standards in the situation?”

The most common reason for missed appointments, however, according to multiple studies, is that patients simply forget that they have one. One reason for that is a lag between appointment and visit. Many dermatologists are booked well in advance; by the time the appointment arrives, some patients’ complaints will have resolved spontaneously, while other patients will have found another office willing to see them sooner.

Another big reason is the absence of a strong physician-patient relationship. Perhaps the patient sees a different doctor or physician assistant at each visit and doesn’t feel a particular bond with any of them. Some patients may perceive a lack of concern on the part of the physician. And others may suffer from poor communication; for example, patients frequently become frustrated that a chronic condition has not resolved, when it has not been clearly explained to them that such problems cannot be expected to resolve rapidly or completely.

Whatever the reasons, no-shows are an economic and medicolegal liability. It is worth the considerable effort it often takes to minimize them.

[embed:render:related:node:250814]

Research suggests that no-show rates can be reduced by providing more same-day or next-day appointments. One large-scale analysis of national data found that same-day appointments accounted for just 2% of no-shows, while appointments booked 15 days or more in advance accounted for nearly a third of them. Canadian studies have likewise found the risk of no-shows increases the further in advance clinics book patients.

Deal with simple forgetfulness by calling your patients the day before to remind them of their appointments. Reasonably priced phone software is available from a variety of vendors to automate this process. Or hire a teenager to do it after school each day.

Whenever possible, use cellphone numbers for reminder calls. Patients often aren’t home during the day, and many don’t listen to their messages when they come in. And patients who have moved will often have a new home phone number, but their cellphone number will be the same.

Decrease the wait for new appointments. Keep some slots open each week for new patients, who will often “shop around” for a faster appointment while they’re waiting for an appointment they already have elsewhere.

But above all, seek to maximize the strength of your physician-patient relationships. Try not to shuttle patients between different physicians or PAs, and make it clear that you are genuinely concerned about their health. Impress upon them the crucial role they play in their own care, which includes keeping all their appointments.

In our office, significant no-shows (for example, a patient with a melanoma who misses a follow-up visit) receive a phone call and a certified letter, and their records go into a special file for close follow-up by the nursing staff.

If you choose to go the missed-appointment-fee route, be sure to post notices in your office and on your website clearly delineating your policy. Emphasize that it is not a service fee, and cannot be billed to insurance.

All missed appointments should be documented in the patient’s record; it’s important clinical and medicolegal information. And habitual no-shows should be dismissed from your practice. You cannot afford them.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Of all the headaches inherent in a private medical practice, few are more frustrating than patients who make appointments and then fail to keep them.

No-shows are a problem for all physicians, but especially for dermatologists. In one study, the no-show rate in dermatology offices averaged 10% – almost double the average for all medical offices.

Eastern _Joseph_S_web.jpg

The problem has become so pervasive that many physicians are now charging a fee for missed appointments. I have never been a fan of such fees for a variety of reasons, starting with the anger and bad will that they engender; but also, in my experience, they seldom accomplish their intended goal of changing the behavior.

That’s because fees imply some sort of conscious decision made by a patient to miss an appointment, but studies show that this is rarely the case. Some patients cite transportation issues or childcare obligations. One Canadian study found that nearly a quarter of patients who missed an appointment felt too sick to keep it. Another reason is lack of insurance coverage. Studies have shown that the no-show rate is far higher when the patient is paying out-of-pocket for the visit.

Patients who don’t show up for appointments tend to be younger and poorer, and live farther away from the office than those who attend consistently. Some patients may be unaware that they need to cancel, while others report that they don’t feel obliged to keep appointments because they feel disrespected by the system. One person posted on a medical forum, “Everyone’s time is valuable. When the doctor makes me wait, there are consequences too. Why are there two standards in the situation?”

The most common reason for missed appointments, however, according to multiple studies, is that patients simply forget that they have one. One reason for that is a lag between appointment and visit. Many dermatologists are booked well in advance; by the time the appointment arrives, some patients’ complaints will have resolved spontaneously, while other patients will have found another office willing to see them sooner.

Another big reason is the absence of a strong physician-patient relationship. Perhaps the patient sees a different doctor or physician assistant at each visit and doesn’t feel a particular bond with any of them. Some patients may perceive a lack of concern on the part of the physician. And others may suffer from poor communication; for example, patients frequently become frustrated that a chronic condition has not resolved, when it has not been clearly explained to them that such problems cannot be expected to resolve rapidly or completely.

Whatever the reasons, no-shows are an economic and medicolegal liability. It is worth the considerable effort it often takes to minimize them.

[embed:render:related:node:250814]

Research suggests that no-show rates can be reduced by providing more same-day or next-day appointments. One large-scale analysis of national data found that same-day appointments accounted for just 2% of no-shows, while appointments booked 15 days or more in advance accounted for nearly a third of them. Canadian studies have likewise found the risk of no-shows increases the further in advance clinics book patients.

Deal with simple forgetfulness by calling your patients the day before to remind them of their appointments. Reasonably priced phone software is available from a variety of vendors to automate this process. Or hire a teenager to do it after school each day.

Whenever possible, use cellphone numbers for reminder calls. Patients often aren’t home during the day, and many don’t listen to their messages when they come in. And patients who have moved will often have a new home phone number, but their cellphone number will be the same.

Decrease the wait for new appointments. Keep some slots open each week for new patients, who will often “shop around” for a faster appointment while they’re waiting for an appointment they already have elsewhere.

But above all, seek to maximize the strength of your physician-patient relationships. Try not to shuttle patients between different physicians or PAs, and make it clear that you are genuinely concerned about their health. Impress upon them the crucial role they play in their own care, which includes keeping all their appointments.

In our office, significant no-shows (for example, a patient with a melanoma who misses a follow-up visit) receive a phone call and a certified letter, and their records go into a special file for close follow-up by the nursing staff.

If you choose to go the missed-appointment-fee route, be sure to post notices in your office and on your website clearly delineating your policy. Emphasize that it is not a service fee, and cannot be billed to insurance.

All missed appointments should be documented in the patient’s record; it’s important clinical and medicolegal information. And habitual no-shows should be dismissed from your practice. You cannot afford them.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

The continuing changes in medicine have led to a significant erosion of physician autonomy, and to ever-increasing administrative burdens that affect small practices far more severely than larger ones. While there are some smaller offices offering unique services that may be able to remain small, most small general practices will be forced to at least consider a larger alternative. Recently, I discussed one option – merging individual practices into a larger one – but others are available.

One alternate strategy is to form a cooperative group. If you look around your area of practice, you will likely find other small practices in similar situations that might be willing to collaborate with you for the purpose of pooling your billing and purchasing resources. This allows each participant to maintain independence, yet share office overhead expenses and employee salaries for mutual benefit. If that arrangement works, and remains satisfactory for all participants, you can consider expanding your sharing of expenditures, such as collective purchasing of supplies and equipment, and centralizing appointment scheduling. Such an arrangement might be particularly attractive to physicians in later stages of their careers who need to alleviate financial burdens but don’t wish to close up shop just yet.

Eastern _Joseph_S_web.jpg

After more time has passed, if everyone remains happy with the arrangement, an outright merger can be considered, allowing the group to negotiate higher insurance remunerations and even lower overhead costs. Obviously, projects of this size and scope require careful planning and implementation, and should not be undertaken without the help of competent legal counsel and an experienced business consultant.

Another option is to join an independent practice association (IPA), if one is operating in your area. IPAs are physician-directed legal entities, formed to provide the same advantages enjoyed by large group practices while allowing individual members to remain independent. IPAs have greater purchasing power, allowing members to cut costs on medical and office supplies. They can also negotiate more favorable contracts with insurance companies and other payers.

Before joining such an organization, examine its legal status carefully. Some IPAs have been charged with antitrust violations because their member practices are, in reality, competitors. Make certain that any IPA you consider joining abides by antitrust and price fixing laws. Look carefully at its financial solvency as well, as IPAs have also been known to fail, leaving former members to pick up the tab.

An alternative to the IPA is the accountable care organization (ACO), a relatively new entity created as part of the Affordable Care Act. Like an IPA, an ACO’s basic purpose is to limit unnecessary spending; but ACOs are typically limited to Medicare and Medicaid recipients, and involve a larger network of doctors and hospitals sharing financial and medical responsibility for patient care. Criteria for limits on spending are established by the Centers for Medicare & Medicaid Services (CMS).

[embed:render:related:node:253908]

ACOs offer financial incentives to cooperate, and to save money by avoiding unnecessary tests and procedures. A key component is the sharing of information. Providers who save money while also meeting quality targets are theoretically entitled to a portion of the savings. According to federal data, ACOs saved Medicare $4.1 billion in 2020). As of January 2022, 483 ACOs were participating in the Medicare Shared Savings Program. A similar entity designed for private-sector patients is the clinically integrated network (CIN), created by the Federal Trade Commission to serve the commercial or self-insured market, while ACOs treat Medicare and Medicaid patients. Like ACOs, the idea is to work together to improve care and reduce costs by sharing records and tracking data.

When joining any group, read the agreement carefully for any clauses that might infringe on your clinical judgment. In particular, be sure that there are no restrictions on patient treatment or physician referral options for your patients. You should also negotiate an escape clause, allowing you to opt out if you become unhappy with the arrangement.

Clearly, the price of remaining autonomous is significant, and many private practitioners are unwilling to pay it. In 2019, the American Medical Association reported that for the first time, there were fewer physician owners (45.9%) than employees (47.4%).

But as I have written many times, those of us who remain committed to independence will find ways to preserve it. In medicine, as in life, those most responsive to change will survive and flourish.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

The continuing changes in medicine have led to a significant erosion of physician autonomy, and to ever-increasing administrative burdens that affect small practices far more severely than larger ones. While there are some smaller offices offering unique services that may be able to remain small, most small general practices will be forced to at least consider a larger alternative. Recently, I discussed one option – merging individual practices into a larger one – but others are available.

One alternate strategy is to form a cooperative group. If you look around your area of practice, you will likely find other small practices in similar situations that might be willing to collaborate with you for the purpose of pooling your billing and purchasing resources. This allows each participant to maintain independence, yet share office overhead expenses and employee salaries for mutual benefit. If that arrangement works, and remains satisfactory for all participants, you can consider expanding your sharing of expenditures, such as collective purchasing of supplies and equipment, and centralizing appointment scheduling. Such an arrangement might be particularly attractive to physicians in later stages of their careers who need to alleviate financial burdens but don’t wish to close up shop just yet.

Eastern _Joseph_S_web.jpg

After more time has passed, if everyone remains happy with the arrangement, an outright merger can be considered, allowing the group to negotiate higher insurance remunerations and even lower overhead costs. Obviously, projects of this size and scope require careful planning and implementation, and should not be undertaken without the help of competent legal counsel and an experienced business consultant.

Another option is to join an independent practice association (IPA), if one is operating in your area. IPAs are physician-directed legal entities, formed to provide the same advantages enjoyed by large group practices while allowing individual members to remain independent. IPAs have greater purchasing power, allowing members to cut costs on medical and office supplies. They can also negotiate more favorable contracts with insurance companies and other payers.

Before joining such an organization, examine its legal status carefully. Some IPAs have been charged with antitrust violations because their member practices are, in reality, competitors. Make certain that any IPA you consider joining abides by antitrust and price fixing laws. Look carefully at its financial solvency as well, as IPAs have also been known to fail, leaving former members to pick up the tab.

An alternative to the IPA is the accountable care organization (ACO), a relatively new entity created as part of the Affordable Care Act. Like an IPA, an ACO’s basic purpose is to limit unnecessary spending; but ACOs are typically limited to Medicare and Medicaid recipients, and involve a larger network of doctors and hospitals sharing financial and medical responsibility for patient care. Criteria for limits on spending are established by the Centers for Medicare & Medicaid Services (CMS).

[embed:render:related:node:253908]

ACOs offer financial incentives to cooperate, and to save money by avoiding unnecessary tests and procedures. A key component is the sharing of information. Providers who save money while also meeting quality targets are theoretically entitled to a portion of the savings. According to federal data, ACOs saved Medicare $4.1 billion in 2020). As of January 2022, 483 ACOs were participating in the Medicare Shared Savings Program. A similar entity designed for private-sector patients is the clinically integrated network (CIN), created by the Federal Trade Commission to serve the commercial or self-insured market, while ACOs treat Medicare and Medicaid patients. Like ACOs, the idea is to work together to improve care and reduce costs by sharing records and tracking data.

When joining any group, read the agreement carefully for any clauses that might infringe on your clinical judgment. In particular, be sure that there are no restrictions on patient treatment or physician referral options for your patients. You should also negotiate an escape clause, allowing you to opt out if you become unhappy with the arrangement.

Clearly, the price of remaining autonomous is significant, and many private practitioners are unwilling to pay it. In 2019, the American Medical Association reported that for the first time, there were fewer physician owners (45.9%) than employees (47.4%).

But as I have written many times, those of us who remain committed to independence will find ways to preserve it. In medicine, as in life, those most responsive to change will survive and flourish.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

The continuing changes in medicine have led to a significant erosion of physician autonomy, and to ever-increasing administrative burdens that affect small practices far more severely than larger ones. While there are some smaller offices offering unique services that may be able to remain small, most small general practices will be forced to at least consider a larger alternative. Recently, I discussed one option – merging individual practices into a larger one – but others are available.

One alternate strategy is to form a cooperative group. If you look around your area of practice, you will likely find other small practices in similar situations that might be willing to collaborate with you for the purpose of pooling your billing and purchasing resources. This allows each participant to maintain independence, yet share office overhead expenses and employee salaries for mutual benefit. If that arrangement works, and remains satisfactory for all participants, you can consider expanding your sharing of expenditures, such as collective purchasing of supplies and equipment, and centralizing appointment scheduling. Such an arrangement might be particularly attractive to physicians in later stages of their careers who need to alleviate financial burdens but don’t wish to close up shop just yet.

Eastern _Joseph_S_web.jpg

After more time has passed, if everyone remains happy with the arrangement, an outright merger can be considered, allowing the group to negotiate higher insurance remunerations and even lower overhead costs. Obviously, projects of this size and scope require careful planning and implementation, and should not be undertaken without the help of competent legal counsel and an experienced business consultant.

Another option is to join an independent practice association (IPA), if one is operating in your area. IPAs are physician-directed legal entities, formed to provide the same advantages enjoyed by large group practices while allowing individual members to remain independent. IPAs have greater purchasing power, allowing members to cut costs on medical and office supplies. They can also negotiate more favorable contracts with insurance companies and other payers.

Before joining such an organization, examine its legal status carefully. Some IPAs have been charged with antitrust violations because their member practices are, in reality, competitors. Make certain that any IPA you consider joining abides by antitrust and price fixing laws. Look carefully at its financial solvency as well, as IPAs have also been known to fail, leaving former members to pick up the tab.

An alternative to the IPA is the accountable care organization (ACO), a relatively new entity created as part of the Affordable Care Act. Like an IPA, an ACO’s basic purpose is to limit unnecessary spending; but ACOs are typically limited to Medicare and Medicaid recipients, and involve a larger network of doctors and hospitals sharing financial and medical responsibility for patient care. Criteria for limits on spending are established by the Centers for Medicare & Medicaid Services (CMS).

[embed:render:related:node:253908]

ACOs offer financial incentives to cooperate, and to save money by avoiding unnecessary tests and procedures. A key component is the sharing of information. Providers who save money while also meeting quality targets are theoretically entitled to a portion of the savings. According to federal data, ACOs saved Medicare $4.1 billion in 2020). As of January 2022, 483 ACOs were participating in the Medicare Shared Savings Program. A similar entity designed for private-sector patients is the clinically integrated network (CIN), created by the Federal Trade Commission to serve the commercial or self-insured market, while ACOs treat Medicare and Medicaid patients. Like ACOs, the idea is to work together to improve care and reduce costs by sharing records and tracking data.

When joining any group, read the agreement carefully for any clauses that might infringe on your clinical judgment. In particular, be sure that there are no restrictions on patient treatment or physician referral options for your patients. You should also negotiate an escape clause, allowing you to opt out if you become unhappy with the arrangement.

Clearly, the price of remaining autonomous is significant, and many private practitioners are unwilling to pay it. In 2019, the American Medical Association reported that for the first time, there were fewer physician owners (45.9%) than employees (47.4%).

But as I have written many times, those of us who remain committed to independence will find ways to preserve it. In medicine, as in life, those most responsive to change will survive and flourish.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Difficult economic times and the unpredictable consequences of health care reform are making an increasing number of solo practitioners and small private groups very nervous. Yet, many balk at the prospect of selling to private equity companies. I have received many inquiries about other protective options, such as merging two or more small practices into one larger entity.

Merging offers many benefits: Better overall management, centralized and efficient billing and collection, group purchasing discounts, and reduced overhead, among others; but careful planning, and a written agreement, are essential. If you are considering such an option, here are some things to think about.

Eastern _Joseph_S_web.jpg

You should begin with an evaluation and comparison of the separate groups’ respective finances. This should include a history of production, collections, overhead, and liabilities. Basically, you want to locate and identify all assets and liabilities that will be combined into the new group. One area of immediate importance is Medicare participation. Which members now currently participate and which do not? Since the new group will need to have a single position, all of the physicians must agree on that issue.

Who will be in charge? Not every physician is a qualified manager. The manager should be the physician who is willing to spend the time it takes to sign checks, interact with the administrator, and ensure that other matters such as filing tax returns and approving minor purchases arc carried out properly.

What is the compensation formula? Compensation arrangements should be based on each physician’s current financial data and the goals of the practice. Will everyone be paid only for what they do individually, or will revenue be shared equally? I favor a combination, so productivity is rewarded but your income doesn’t drop to zero when you take time off.

Which practices have a retirement plan and which do not? Will you keep your retirement plans separate, or combine them? If the latter, you will have to agree on the terms of the new plan, which can be the same or different from any of the existing plans. You’ll probably need some legal guidance to insure that assets from existing plans can be transferred into a new plan without tax issues. You may also have to address the problem of physicians who currently do not have a plan who, for whatever reason, may not want to be forced into making retirement plan contributions.

The often-problematic issue of employees and their salaries needs to be addressed, to decide which employees will be needed in the new group, and to determine a salary structure. Each practice’s policies related to vacation, sick leave, and other such issues should be reviewed, and an overall policy for the new group developed.

[embed:render:related:node:251858]

Other common sticking points are issues related to facilities. If the practices intend to consolidate into one location, the physicians must decide which of the specific assets of each practice will be contributed to the new entity. Ideally, each party brings an equal amount of assets to the table, but in the real world that is hardly ever the case. Physicians whose assets are to be used generally want to be compensated, and those who have to dispose of or store assets are in a quandary. The solution to this predicament will vary depending on the circumstances of each merger. One alternative is to agree that any inequalities will be compensated at the other end, in the form of buyout value; that is, physicians contributing more assets will receive larger buyouts when they leave or retire than those contributing less.

Buyouts should be addressed in advance as well. You must decide when a buyout would occur – usually in the event of retirement, death, disability, or withdrawal (voluntary or involuntary) – how the buyout amount will be calculated, and how it will be paid. Then, you must agree on how a buyout amount will be valued. Remember that any buyout calculated at “appraised value” is a problem, because the buyout amount remains a mystery until an appraisal is performed. If the appraised value ends up being too high, the remaining owners may refuse to pay it. I suggest having an actuary create a formula, so that the buyout figure can be calculated at any time. This area, especially, is where you need experienced, competent legal advice.

Noncompete provisions are always a difficult issue, mostly because they are so hard (and expensive) to enforce. An increasingly popular alternative is, once again, to deal with it at the other end, with a buyout penalty. An unhappy partner can leave, and compete, but at the cost of a substantially reduced buyout. This permits competition, but discourages it; and it compensates the remaining partners.

These are only some of the pivotal business and legal issues that must be settled in advance. A little planning and negotiation can prevent a lot of grief, regret, and legal expenses in the future. I’ll discuss some other, more complicated merger options in my next column.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Difficult economic times and the unpredictable consequences of health care reform are making an increasing number of solo practitioners and small private groups very nervous. Yet, many balk at the prospect of selling to private equity companies. I have received many inquiries about other protective options, such as merging two or more small practices into one larger entity.

Merging offers many benefits: Better overall management, centralized and efficient billing and collection, group purchasing discounts, and reduced overhead, among others; but careful planning, and a written agreement, are essential. If you are considering such an option, here are some things to think about.

Eastern _Joseph_S_web.jpg

You should begin with an evaluation and comparison of the separate groups’ respective finances. This should include a history of production, collections, overhead, and liabilities. Basically, you want to locate and identify all assets and liabilities that will be combined into the new group. One area of immediate importance is Medicare participation. Which members now currently participate and which do not? Since the new group will need to have a single position, all of the physicians must agree on that issue.

Who will be in charge? Not every physician is a qualified manager. The manager should be the physician who is willing to spend the time it takes to sign checks, interact with the administrator, and ensure that other matters such as filing tax returns and approving minor purchases arc carried out properly.

What is the compensation formula? Compensation arrangements should be based on each physician’s current financial data and the goals of the practice. Will everyone be paid only for what they do individually, or will revenue be shared equally? I favor a combination, so productivity is rewarded but your income doesn’t drop to zero when you take time off.

Which practices have a retirement plan and which do not? Will you keep your retirement plans separate, or combine them? If the latter, you will have to agree on the terms of the new plan, which can be the same or different from any of the existing plans. You’ll probably need some legal guidance to insure that assets from existing plans can be transferred into a new plan without tax issues. You may also have to address the problem of physicians who currently do not have a plan who, for whatever reason, may not want to be forced into making retirement plan contributions.

The often-problematic issue of employees and their salaries needs to be addressed, to decide which employees will be needed in the new group, and to determine a salary structure. Each practice’s policies related to vacation, sick leave, and other such issues should be reviewed, and an overall policy for the new group developed.

[embed:render:related:node:251858]

Other common sticking points are issues related to facilities. If the practices intend to consolidate into one location, the physicians must decide which of the specific assets of each practice will be contributed to the new entity. Ideally, each party brings an equal amount of assets to the table, but in the real world that is hardly ever the case. Physicians whose assets are to be used generally want to be compensated, and those who have to dispose of or store assets are in a quandary. The solution to this predicament will vary depending on the circumstances of each merger. One alternative is to agree that any inequalities will be compensated at the other end, in the form of buyout value; that is, physicians contributing more assets will receive larger buyouts when they leave or retire than those contributing less.

Buyouts should be addressed in advance as well. You must decide when a buyout would occur – usually in the event of retirement, death, disability, or withdrawal (voluntary or involuntary) – how the buyout amount will be calculated, and how it will be paid. Then, you must agree on how a buyout amount will be valued. Remember that any buyout calculated at “appraised value” is a problem, because the buyout amount remains a mystery until an appraisal is performed. If the appraised value ends up being too high, the remaining owners may refuse to pay it. I suggest having an actuary create a formula, so that the buyout figure can be calculated at any time. This area, especially, is where you need experienced, competent legal advice.

Noncompete provisions are always a difficult issue, mostly because they are so hard (and expensive) to enforce. An increasingly popular alternative is, once again, to deal with it at the other end, with a buyout penalty. An unhappy partner can leave, and compete, but at the cost of a substantially reduced buyout. This permits competition, but discourages it; and it compensates the remaining partners.

These are only some of the pivotal business and legal issues that must be settled in advance. A little planning and negotiation can prevent a lot of grief, regret, and legal expenses in the future. I’ll discuss some other, more complicated merger options in my next column.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Difficult economic times and the unpredictable consequences of health care reform are making an increasing number of solo practitioners and small private groups very nervous. Yet, many balk at the prospect of selling to private equity companies. I have received many inquiries about other protective options, such as merging two or more small practices into one larger entity.

Merging offers many benefits: Better overall management, centralized and efficient billing and collection, group purchasing discounts, and reduced overhead, among others; but careful planning, and a written agreement, are essential. If you are considering such an option, here are some things to think about.

Eastern _Joseph_S_web.jpg

You should begin with an evaluation and comparison of the separate groups’ respective finances. This should include a history of production, collections, overhead, and liabilities. Basically, you want to locate and identify all assets and liabilities that will be combined into the new group. One area of immediate importance is Medicare participation. Which members now currently participate and which do not? Since the new group will need to have a single position, all of the physicians must agree on that issue.

Who will be in charge? Not every physician is a qualified manager. The manager should be the physician who is willing to spend the time it takes to sign checks, interact with the administrator, and ensure that other matters such as filing tax returns and approving minor purchases arc carried out properly.

What is the compensation formula? Compensation arrangements should be based on each physician’s current financial data and the goals of the practice. Will everyone be paid only for what they do individually, or will revenue be shared equally? I favor a combination, so productivity is rewarded but your income doesn’t drop to zero when you take time off.

Which practices have a retirement plan and which do not? Will you keep your retirement plans separate, or combine them? If the latter, you will have to agree on the terms of the new plan, which can be the same or different from any of the existing plans. You’ll probably need some legal guidance to insure that assets from existing plans can be transferred into a new plan without tax issues. You may also have to address the problem of physicians who currently do not have a plan who, for whatever reason, may not want to be forced into making retirement plan contributions.

The often-problematic issue of employees and their salaries needs to be addressed, to decide which employees will be needed in the new group, and to determine a salary structure. Each practice’s policies related to vacation, sick leave, and other such issues should be reviewed, and an overall policy for the new group developed.

[embed:render:related:node:251858]

Other common sticking points are issues related to facilities. If the practices intend to consolidate into one location, the physicians must decide which of the specific assets of each practice will be contributed to the new entity. Ideally, each party brings an equal amount of assets to the table, but in the real world that is hardly ever the case. Physicians whose assets are to be used generally want to be compensated, and those who have to dispose of or store assets are in a quandary. The solution to this predicament will vary depending on the circumstances of each merger. One alternative is to agree that any inequalities will be compensated at the other end, in the form of buyout value; that is, physicians contributing more assets will receive larger buyouts when they leave or retire than those contributing less.

Buyouts should be addressed in advance as well. You must decide when a buyout would occur – usually in the event of retirement, death, disability, or withdrawal (voluntary or involuntary) – how the buyout amount will be calculated, and how it will be paid. Then, you must agree on how a buyout amount will be valued. Remember that any buyout calculated at “appraised value” is a problem, because the buyout amount remains a mystery until an appraisal is performed. If the appraised value ends up being too high, the remaining owners may refuse to pay it. I suggest having an actuary create a formula, so that the buyout figure can be calculated at any time. This area, especially, is where you need experienced, competent legal advice.

Noncompete provisions are always a difficult issue, mostly because they are so hard (and expensive) to enforce. An increasingly popular alternative is, once again, to deal with it at the other end, with a buyout penalty. An unhappy partner can leave, and compete, but at the cost of a substantially reduced buyout. This permits competition, but discourages it; and it compensates the remaining partners.

These are only some of the pivotal business and legal issues that must be settled in advance. A little planning and negotiation can prevent a lot of grief, regret, and legal expenses in the future. I’ll discuss some other, more complicated merger options in my next column.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

My previous column on practice valuation prompted a number of questions on the mechanics of selling a private practice. As usual, I cannot hope to cover this complex topic comprehensively in only 750 words, but here are the basics.

A generation ago, the sale of a medical practice was much like the sale of any other business: A retiring physician would sell his or her practice to a young doctor and the practice would continue on as before. Occasionally, that still happens, but changes in the business of medicine – most significantly the growth of managed care – have had a big impact on the way medical practices are bought and sold.

Eastern _Joseph_S_web.jpg

For one thing, there are far fewer solo practitioners these days, and polls indicate that most young physicians intend to continue that trend. The buyer of a medical practice today is more likely to be an institution, such as a hospital, an HMO, or a large practice group, rather than an individual.

For another, because the rules governing such sales have become so numbingly complex, the services of expert (and expensive) third parties are essential.

While these issues may complicate matters, there is still a market for the sale of medical practices. However, you must do everything possible to ensure you identify the best possible buyer and structure the best deal.

[embed:render:related:node:251858]

The first hurdle is the accurate valuation of your practice, which was covered in some detail in my last column. Briefly, for the protection of both parties, it is important that the appraisal be done by an experienced and neutral financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation be supplied to support the conclusions reached.

Keep in mind that the valuation will not necessarily equal the purchase price; other factors may need to be considered before a final price can be agreed upon. Keep in mind, too, that there may be legal constraints on the purchase price. For example, if the buyer is a nonprofit corporation such as a hospital or HMO, by law it cannot pay in excess of fair market value for the practice – which may rule out any valuation of “good will.” In some states, the purchase of private practices by hospitals is prohibited altogether – so you might need to consider a long-term lease rather than a sale.

Once a value has been agreed upon, you must consider how the transaction will be structured. The most popular structures include purchase of assets, purchase of corporate stock, and merger.

Many buyers prefer to purchase assets, because it allows them to pick and choose only those items that have value to them. This can leave you with a bunch of “odd lot” assets to dispose of. But depending on the circumstances, an asset sale may still be to your advantage.

Sellers typically prefer to sell stock, because it allows them to sell their entire practice, which is often worth more than the sum of its parts, and often provides tax advantages.

The third option, merger, continues to grow in popularity and is a column subject in itself, and I will address it separately next month.

Tax issues must always be considered. Most private practices are corporations, and the sale of corporate stock will result in a long-term capital gain that will be taxed – currently at 15%-20%. As the saying goes, it’s not what you earn, it’s what you keep. So it may benefit you to accept a slightly lower price if the sale can be structured to provide significantly lower tax treatment. However, any gain that does not qualify as a long-term capital gain will be taxed as regular income – currently in the 32%-37% percent range – plus a Social Security tax of about 15%.

Payment in installments is a popular way to defer taxes, since they are incurred on each installment as it is paid; but such payments may be mistaken by the IRS for payments for referrals, which is illegal. And there is always the problem of making certain all payments are eventually made.

You may wish to continue working at the practice as an employee for an agreed-upon period of time, and this is often to the buyer’s advantage as well. Transitioning to new ownership in stages often maximizes the value of the business by improving patient retention, and allows patients to become accustomed to the transition. However, care must be taken, with the aid of good legal advice, to structure such an arrangement in a way that minimizes concerns of fraud and abuse.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

My previous column on practice valuation prompted a number of questions on the mechanics of selling a private practice. As usual, I cannot hope to cover this complex topic comprehensively in only 750 words, but here are the basics.

A generation ago, the sale of a medical practice was much like the sale of any other business: A retiring physician would sell his or her practice to a young doctor and the practice would continue on as before. Occasionally, that still happens, but changes in the business of medicine – most significantly the growth of managed care – have had a big impact on the way medical practices are bought and sold.

Eastern _Joseph_S_web.jpg

For one thing, there are far fewer solo practitioners these days, and polls indicate that most young physicians intend to continue that trend. The buyer of a medical practice today is more likely to be an institution, such as a hospital, an HMO, or a large practice group, rather than an individual.

For another, because the rules governing such sales have become so numbingly complex, the services of expert (and expensive) third parties are essential.

While these issues may complicate matters, there is still a market for the sale of medical practices. However, you must do everything possible to ensure you identify the best possible buyer and structure the best deal.

[embed:render:related:node:251858]

The first hurdle is the accurate valuation of your practice, which was covered in some detail in my last column. Briefly, for the protection of both parties, it is important that the appraisal be done by an experienced and neutral financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation be supplied to support the conclusions reached.

Keep in mind that the valuation will not necessarily equal the purchase price; other factors may need to be considered before a final price can be agreed upon. Keep in mind, too, that there may be legal constraints on the purchase price. For example, if the buyer is a nonprofit corporation such as a hospital or HMO, by law it cannot pay in excess of fair market value for the practice – which may rule out any valuation of “good will.” In some states, the purchase of private practices by hospitals is prohibited altogether – so you might need to consider a long-term lease rather than a sale.

Once a value has been agreed upon, you must consider how the transaction will be structured. The most popular structures include purchase of assets, purchase of corporate stock, and merger.

Many buyers prefer to purchase assets, because it allows them to pick and choose only those items that have value to them. This can leave you with a bunch of “odd lot” assets to dispose of. But depending on the circumstances, an asset sale may still be to your advantage.

Sellers typically prefer to sell stock, because it allows them to sell their entire practice, which is often worth more than the sum of its parts, and often provides tax advantages.

The third option, merger, continues to grow in popularity and is a column subject in itself, and I will address it separately next month.

Tax issues must always be considered. Most private practices are corporations, and the sale of corporate stock will result in a long-term capital gain that will be taxed – currently at 15%-20%. As the saying goes, it’s not what you earn, it’s what you keep. So it may benefit you to accept a slightly lower price if the sale can be structured to provide significantly lower tax treatment. However, any gain that does not qualify as a long-term capital gain will be taxed as regular income – currently in the 32%-37% percent range – plus a Social Security tax of about 15%.

Payment in installments is a popular way to defer taxes, since they are incurred on each installment as it is paid; but such payments may be mistaken by the IRS for payments for referrals, which is illegal. And there is always the problem of making certain all payments are eventually made.

You may wish to continue working at the practice as an employee for an agreed-upon period of time, and this is often to the buyer’s advantage as well. Transitioning to new ownership in stages often maximizes the value of the business by improving patient retention, and allows patients to become accustomed to the transition. However, care must be taken, with the aid of good legal advice, to structure such an arrangement in a way that minimizes concerns of fraud and abuse.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

My previous column on practice valuation prompted a number of questions on the mechanics of selling a private practice. As usual, I cannot hope to cover this complex topic comprehensively in only 750 words, but here are the basics.

A generation ago, the sale of a medical practice was much like the sale of any other business: A retiring physician would sell his or her practice to a young doctor and the practice would continue on as before. Occasionally, that still happens, but changes in the business of medicine – most significantly the growth of managed care – have had a big impact on the way medical practices are bought and sold.

For one thing, there are far fewer solo practitioners these days, and polls indicate that most young physicians intend to continue that trend. The buyer of a medical practice today is more likely to be an institution, such as a hospital, an HMO, or a large practice group, rather than an individual.

For another, because the rules governing such sales have become so numbingly complex, the services of expert (and expensive) third parties are essential.

While these issues may complicate matters, there is still a market for the sale of medical practices. However, you must do everything possible to ensure you identify the best possible buyer and structure the best deal.

[embed:render:related:node:251858]

The first hurdle is the accurate valuation of your practice, which was covered in some detail in my last column. Briefly, for the protection of both parties, it is important that the appraisal be done by an experienced and neutral financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation be supplied to support the conclusions reached.

Keep in mind that the valuation will not necessarily equal the purchase price; other factors may need to be considered before a final price can be agreed upon. Keep in mind, too, that there may be legal constraints on the purchase price. For example, if the buyer is a nonprofit corporation such as a hospital or HMO, by law it cannot pay in excess of fair market value for the practice – which may rule out any valuation of “good will.” In some states, the purchase of private practices by hospitals is prohibited altogether – so you might need to consider a long-term lease rather than a sale.

Once a value has been agreed upon, you must consider how the transaction will be structured. The most popular structures include purchase of assets, purchase of corporate stock, and merger.

Many buyers prefer to purchase assets, because it allows them to pick and choose only those items that have value to them. This can leave you with a bunch of “odd lot” assets to dispose of. But depending on the circumstances, an asset sale may still be to your advantage.

Sellers typically prefer to sell stock, because it allows them to sell their entire practice, which is often worth more than the sum of its parts, and often provides tax advantages.

The third option, merger, continues to grow in popularity and is a column subject in itself, and I will address it separately next month.

Tax issues must always be considered. Most private practices are corporations, and the sale of corporate stock will result in a long-term capital gain that will be taxed – currently at 15%-20%. As the saying goes, it’s not what you earn, it’s what you keep. So it may benefit you to accept a slightly lower price if the sale can be structured to provide significantly lower tax treatment. However, any gain that does not qualify as a long-term capital gain will be taxed as regular income – currently in the 32%-37% percent range – plus a Social Security tax of about 15%.

Payment in installments is a popular way to defer taxes, since they are incurred on each installment as it is paid; but such payments may be mistaken by the IRS for payments for referrals, which is illegal. And there is always the problem of making certain all payments are eventually made.

You may wish to continue working at the practice as an employee for an agreed-upon period of time, and this is often to the buyer’s advantage as well. Transitioning to new ownership in stages often maximizes the value of the business by improving patient retention, and allows patients to become accustomed to the transition. However, care must be taken, with the aid of good legal advice, to structure such an arrangement in a way that minimizes concerns of fraud and abuse.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recent columns on closing, selling, or merging a practice have sparked numerous questions about proper practice valuation.

Too often, physicians are not receiving a fair return on the equity they have worked so hard to build over several decades, either because they have waited too long and must accept what is offered, or because they simply take the buyer’s word for their practice’s value. Don’t put yourself in either of those positions, and don’t entertain any offers until you obtain an objective appraisal from a neutral party.

Of course, a medical practice is trickier to value than an ordinary business, and usually requires the services of an experienced professional appraiser. Entire books have been written about the process, so I can’t hope to cover it completely in 750 words; but three basic yardsticks are essential for determining the equity, or book value, of a practice:

• Tangible assets. Equipment, cash, accounts receivable, and other property owned by the practice.
• Liabilities. Accounts payable, outstanding loans, and anything else owed to others.
• Intangible assets. Sometimes called “good will” – the reputation of the physicians, the location and name recognition of the practice, the loyalty and volume of patients, and other, well, intangibles.

Valuing tangible assets is comparatively straightforward, but there are several ways to do it, and when reviewing a practice appraisal you should ask which of them was used. Depreciated value is the book value of equipment and supplies as determined by their purchase price, less the amount their value has decreased since purchase. Remaining useful life value estimates how long the equipment can be expected to last. Market (or replacement) value is the amount it would cost on the open market to replace all equipment and supplies.

Intangible assets are more difficult to value. Many components are analyzed, including location, interior and exterior decor, accessibility to patients, age and functional status of equipment, systems in place to promote efficiency, reasons why patients come back (if in fact they do), and the overall reputation of the practice in the community. Other important factors include the “payer mix” (what percentage pays cash, how many third-party contracts are in place and how well they pay, etcetera), the extent and strength of the referral base, and the presence of supplemental income streams, such as clinical research.

[embed:render:related:node:249718]

It is also important to determine to what extent intangible assets are transferable. For example, unique skills with a laser, neurotoxins, or filler substances, or extraordinary personal charisma, may increase your practice’s value to you, but they are worthless to the next owner, and he or she will be unwilling to pay for them unless your services become part of the deal.

Once again there are many ways to estimate intangible asset value, and once again you should ask which were used. Cash flow analysis works on the assumption that cash flow is a measure of intangible value. Capitalization of earnings puts a value, or capitalization, on the practice’s income streams using a variety of assumptions. Guideline comparison uses various databases to compare your practice with other, similar ones that have changed hands in the past.

Two newer techniques that some consider a better estimate of intangible assets are the replacement method, which estimates the costs of starting the practice over again in the current market; and the excess earnings method, which measures how far above average your practice’s earnings (and thus its overall value) are.

Asset-based valuation is the most popular, but by no means the only method available. Income-based valuation looks at the source and strength of a practice’s income stream as a creator of value, as well as whether or not its income stream under a different owner would mirror its present one. This in turn becomes the basis for an understanding of the fair market value of both tangible and intangible assets. Market valuation combines the asset-based and income-based approaches, along with an analysis of sales and mergers of comparable practices in the community, to determine the value of a practice in its local market.

Whatever methods are used, it is important that the appraisal be done by an experienced and independent financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation is supplied to support the conclusions reached. This is especially important if the appraisal will be relied upon in the sale or merger of the practice.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recent columns on closing, selling, or merging a practice have sparked numerous questions about proper practice valuation.

Too often, physicians are not receiving a fair return on the equity they have worked so hard to build over several decades, either because they have waited too long and must accept what is offered, or because they simply take the buyer’s word for their practice’s value. Don’t put yourself in either of those positions, and don’t entertain any offers until you obtain an objective appraisal from a neutral party.

Of course, a medical practice is trickier to value than an ordinary business, and usually requires the services of an experienced professional appraiser. Entire books have been written about the process, so I can’t hope to cover it completely in 750 words; but three basic yardsticks are essential for determining the equity, or book value, of a practice:

• Tangible assets. Equipment, cash, accounts receivable, and other property owned by the practice.
• Liabilities. Accounts payable, outstanding loans, and anything else owed to others.
• Intangible assets. Sometimes called “good will” – the reputation of the physicians, the location and name recognition of the practice, the loyalty and volume of patients, and other, well, intangibles.

Valuing tangible assets is comparatively straightforward, but there are several ways to do it, and when reviewing a practice appraisal you should ask which of them was used. Depreciated value is the book value of equipment and supplies as determined by their purchase price, less the amount their value has decreased since purchase. Remaining useful life value estimates how long the equipment can be expected to last. Market (or replacement) value is the amount it would cost on the open market to replace all equipment and supplies.

Intangible assets are more difficult to value. Many components are analyzed, including location, interior and exterior decor, accessibility to patients, age and functional status of equipment, systems in place to promote efficiency, reasons why patients come back (if in fact they do), and the overall reputation of the practice in the community. Other important factors include the “payer mix” (what percentage pays cash, how many third-party contracts are in place and how well they pay, etcetera), the extent and strength of the referral base, and the presence of supplemental income streams, such as clinical research.

[embed:render:related:node:249718]

It is also important to determine to what extent intangible assets are transferable. For example, unique skills with a laser, neurotoxins, or filler substances, or extraordinary personal charisma, may increase your practice’s value to you, but they are worthless to the next owner, and he or she will be unwilling to pay for them unless your services become part of the deal.

Once again there are many ways to estimate intangible asset value, and once again you should ask which were used. Cash flow analysis works on the assumption that cash flow is a measure of intangible value. Capitalization of earnings puts a value, or capitalization, on the practice’s income streams using a variety of assumptions. Guideline comparison uses various databases to compare your practice with other, similar ones that have changed hands in the past.

Two newer techniques that some consider a better estimate of intangible assets are the replacement method, which estimates the costs of starting the practice over again in the current market; and the excess earnings method, which measures how far above average your practice’s earnings (and thus its overall value) are.

Asset-based valuation is the most popular, but by no means the only method available. Income-based valuation looks at the source and strength of a practice’s income stream as a creator of value, as well as whether or not its income stream under a different owner would mirror its present one. This in turn becomes the basis for an understanding of the fair market value of both tangible and intangible assets. Market valuation combines the asset-based and income-based approaches, along with an analysis of sales and mergers of comparable practices in the community, to determine the value of a practice in its local market.

Whatever methods are used, it is important that the appraisal be done by an experienced and independent financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation is supplied to support the conclusions reached. This is especially important if the appraisal will be relied upon in the sale or merger of the practice.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

Recent columns on closing, selling, or merging a practice have sparked numerous questions about proper practice valuation.

Too often, physicians are not receiving a fair return on the equity they have worked so hard to build over several decades, either because they have waited too long and must accept what is offered, or because they simply take the buyer’s word for their practice’s value. Don’t put yourself in either of those positions, and don’t entertain any offers until you obtain an objective appraisal from a neutral party.

Of course, a medical practice is trickier to value than an ordinary business, and usually requires the services of an experienced professional appraiser. Entire books have been written about the process, so I can’t hope to cover it completely in 750 words; but three basic yardsticks are essential for determining the equity, or book value, of a practice:

• Tangible assets. Equipment, cash, accounts receivable, and other property owned by the practice.
• Liabilities. Accounts payable, outstanding loans, and anything else owed to others.
• Intangible assets. Sometimes called “good will” – the reputation of the physicians, the location and name recognition of the practice, the loyalty and volume of patients, and other, well, intangibles.

Valuing tangible assets is comparatively straightforward, but there are several ways to do it, and when reviewing a practice appraisal you should ask which of them was used. Depreciated value is the book value of equipment and supplies as determined by their purchase price, less the amount their value has decreased since purchase. Remaining useful life value estimates how long the equipment can be expected to last. Market (or replacement) value is the amount it would cost on the open market to replace all equipment and supplies.

Intangible assets are more difficult to value. Many components are analyzed, including location, interior and exterior decor, accessibility to patients, age and functional status of equipment, systems in place to promote efficiency, reasons why patients come back (if in fact they do), and the overall reputation of the practice in the community. Other important factors include the “payer mix” (what percentage pays cash, how many third-party contracts are in place and how well they pay, etcetera), the extent and strength of the referral base, and the presence of supplemental income streams, such as clinical research.

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It is also important to determine to what extent intangible assets are transferable. For example, unique skills with a laser, neurotoxins, or filler substances, or extraordinary personal charisma, may increase your practice’s value to you, but they are worthless to the next owner, and he or she will be unwilling to pay for them unless your services become part of the deal.

Once again there are many ways to estimate intangible asset value, and once again you should ask which were used. Cash flow analysis works on the assumption that cash flow is a measure of intangible value. Capitalization of earnings puts a value, or capitalization, on the practice’s income streams using a variety of assumptions. Guideline comparison uses various databases to compare your practice with other, similar ones that have changed hands in the past.

Two newer techniques that some consider a better estimate of intangible assets are the replacement method, which estimates the costs of starting the practice over again in the current market; and the excess earnings method, which measures how far above average your practice’s earnings (and thus its overall value) are.

Asset-based valuation is the most popular, but by no means the only method available. Income-based valuation looks at the source and strength of a practice’s income stream as a creator of value, as well as whether or not its income stream under a different owner would mirror its present one. This in turn becomes the basis for an understanding of the fair market value of both tangible and intangible assets. Market valuation combines the asset-based and income-based approaches, along with an analysis of sales and mergers of comparable practices in the community, to determine the value of a practice in its local market.

Whatever methods are used, it is important that the appraisal be done by an experienced and independent financial consultant, that all techniques used in the valuation be divulged and explained, and that documentation is supplied to support the conclusions reached. This is especially important if the appraisal will be relied upon in the sale or merger of the practice.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

After a recent column about the dilemma of dealing with patients who refuse to be vaccinated against COVID-19, several readers raised the question of how to properly dismiss patients from a practice, for that or any other reason. Specifically, most asked: “How do I dismiss a patient without violating any laws?”

Contrary to what seems to be the popular opinion, there are no statutory laws that I am aware of that directly apply to patient dismissal, beyond the obvious ones prohibiting discrimination that I’ve discussed many times. The more realistic concern is leaving yourself vulnerable to civil litigation – usually charges of abandonment.

Criteria will vary by region, jurisdiction, and practice. Since there are no hard and fast rules, your reasons for dismissal should be determined in advance, written out, and included in your practice manual. Once you have laid down your rules, follow them. Exceptions should be rare and made only under extraordinary circumstances.

Most patients are dismissed because of interpersonal conflicts between physician or staff members. Usually, that involves noncompliance with a reasonable treatment plan (including vaccinations), but there are other valid reasons. These include threats of violence, inappropriate sexual advances, providing false or misleading medical history, demands for inappropriate treatments or medications, and repeated failure to keep appointments or pay bills. And most ethics experts agree that you can dismiss someone who insists on treatment outside your area of expertise, or at a location other than your private office.

Even when circumstances warrant, dismissal should be a last resort. As with most interpersonal conflicts, your best option is usually reconciliation. Sit down with the patient, explain your concerns, and discuss what must be done if your doctor-patient relationship is to continue. Often, such patients are not aware (or willing to admit) that they are violating your office policies. Honest communication will often save such relationships. But be sure to make it clear that failure to address the problems you have outlined will result in dismissal from your practice. Document this conversation in detail in the patient’s chart, and follow up with a written communication reconfirming what you discussed.

If, despite your best (documented) efforts, the problems continue and dismissal becomes necessary, following a few generally accepted guidelines will help keep the process smooth and consequence free.

[embed:render:related:node:247524]

First, try to avoid dismissing a patient in the middle of a course of treatment. If that is unavoidable, you might want to contact your malpractice carrier and review the case with them prior to doing so.

Inform the patient, preferably by certified mail, of your decision. Spell out your reasons, with a reminder that these problems were discussed, and that a warning was issued and not heeded. If the patient belongs to a third-party health plan, be certain that you are acting within the stipulations of your contract with that plan, and inform the payer in writing of your action.

Once again, you must clearly document in the patient’s chart exactly how he or she violated your office policies. This will minimize grounds for charges of discrimination of any sort. Be especially diligent about this step if the patient has any known physical or mental disability.

Give the patient a reasonable amount of time (30 days is common) to find another physician, and mention that you will address any emergent problems within the scope of your specialty within that 30-day period. To minimize any potential allegations of abandonment, include a list of competent physicians in your area (without any guarantees) who might be willing to assume the patient’s care. Alternatively, you can list the phone number or website of a local medical society that they can contact to find a replacement. Offer to transfer medical records to the new physician upon receipt of written permission.

File a copy or scan of the letter, the certified delivery receipt, and the returned signature card in the patient’s chart. While the law states that a first-class letter, properly addressed and stamped, is presumed to have been delivered, you don’t want any question as to whether the patient received written notice of dismissal.

Forcibly ending a physician-patient relationship is a significant event that should not be undertaken lightly. Again, dismissal should be a rare occurrence, a last resort.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

After a recent column about the dilemma of dealing with patients who refuse to be vaccinated against COVID-19, several readers raised the question of how to properly dismiss patients from a practice, for that or any other reason. Specifically, most asked: “How do I dismiss a patient without violating any laws?”

Contrary to what seems to be the popular opinion, there are no statutory laws that I am aware of that directly apply to patient dismissal, beyond the obvious ones prohibiting discrimination that I’ve discussed many times. The more realistic concern is leaving yourself vulnerable to civil litigation – usually charges of abandonment.

Criteria will vary by region, jurisdiction, and practice. Since there are no hard and fast rules, your reasons for dismissal should be determined in advance, written out, and included in your practice manual. Once you have laid down your rules, follow them. Exceptions should be rare and made only under extraordinary circumstances.

Most patients are dismissed because of interpersonal conflicts between physician or staff members. Usually, that involves noncompliance with a reasonable treatment plan (including vaccinations), but there are other valid reasons. These include threats of violence, inappropriate sexual advances, providing false or misleading medical history, demands for inappropriate treatments or medications, and repeated failure to keep appointments or pay bills. And most ethics experts agree that you can dismiss someone who insists on treatment outside your area of expertise, or at a location other than your private office.

Even when circumstances warrant, dismissal should be a last resort. As with most interpersonal conflicts, your best option is usually reconciliation. Sit down with the patient, explain your concerns, and discuss what must be done if your doctor-patient relationship is to continue. Often, such patients are not aware (or willing to admit) that they are violating your office policies. Honest communication will often save such relationships. But be sure to make it clear that failure to address the problems you have outlined will result in dismissal from your practice. Document this conversation in detail in the patient’s chart, and follow up with a written communication reconfirming what you discussed.

If, despite your best (documented) efforts, the problems continue and dismissal becomes necessary, following a few generally accepted guidelines will help keep the process smooth and consequence free.

[embed:render:related:node:247524]

First, try to avoid dismissing a patient in the middle of a course of treatment. If that is unavoidable, you might want to contact your malpractice carrier and review the case with them prior to doing so.

Inform the patient, preferably by certified mail, of your decision. Spell out your reasons, with a reminder that these problems were discussed, and that a warning was issued and not heeded. If the patient belongs to a third-party health plan, be certain that you are acting within the stipulations of your contract with that plan, and inform the payer in writing of your action.

Once again, you must clearly document in the patient’s chart exactly how he or she violated your office policies. This will minimize grounds for charges of discrimination of any sort. Be especially diligent about this step if the patient has any known physical or mental disability.

Give the patient a reasonable amount of time (30 days is common) to find another physician, and mention that you will address any emergent problems within the scope of your specialty within that 30-day period. To minimize any potential allegations of abandonment, include a list of competent physicians in your area (without any guarantees) who might be willing to assume the patient’s care. Alternatively, you can list the phone number or website of a local medical society that they can contact to find a replacement. Offer to transfer medical records to the new physician upon receipt of written permission.

File a copy or scan of the letter, the certified delivery receipt, and the returned signature card in the patient’s chart. While the law states that a first-class letter, properly addressed and stamped, is presumed to have been delivered, you don’t want any question as to whether the patient received written notice of dismissal.

Forcibly ending a physician-patient relationship is a significant event that should not be undertaken lightly. Again, dismissal should be a rare occurrence, a last resort.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

After a recent column about the dilemma of dealing with patients who refuse to be vaccinated against COVID-19, several readers raised the question of how to properly dismiss patients from a practice, for that or any other reason. Specifically, most asked: “How do I dismiss a patient without violating any laws?”

Contrary to what seems to be the popular opinion, there are no statutory laws that I am aware of that directly apply to patient dismissal, beyond the obvious ones prohibiting discrimination that I’ve discussed many times. The more realistic concern is leaving yourself vulnerable to civil litigation – usually charges of abandonment.

Criteria will vary by region, jurisdiction, and practice. Since there are no hard and fast rules, your reasons for dismissal should be determined in advance, written out, and included in your practice manual. Once you have laid down your rules, follow them. Exceptions should be rare and made only under extraordinary circumstances.

Most patients are dismissed because of interpersonal conflicts between physician or staff members. Usually, that involves noncompliance with a reasonable treatment plan (including vaccinations), but there are other valid reasons. These include threats of violence, inappropriate sexual advances, providing false or misleading medical history, demands for inappropriate treatments or medications, and repeated failure to keep appointments or pay bills. And most ethics experts agree that you can dismiss someone who insists on treatment outside your area of expertise, or at a location other than your private office.

Even when circumstances warrant, dismissal should be a last resort. As with most interpersonal conflicts, your best option is usually reconciliation. Sit down with the patient, explain your concerns, and discuss what must be done if your doctor-patient relationship is to continue. Often, such patients are not aware (or willing to admit) that they are violating your office policies. Honest communication will often save such relationships. But be sure to make it clear that failure to address the problems you have outlined will result in dismissal from your practice. Document this conversation in detail in the patient’s chart, and follow up with a written communication reconfirming what you discussed.

If, despite your best (documented) efforts, the problems continue and dismissal becomes necessary, following a few generally accepted guidelines will help keep the process smooth and consequence free.

[embed:render:related:node:247524]

First, try to avoid dismissing a patient in the middle of a course of treatment. If that is unavoidable, you might want to contact your malpractice carrier and review the case with them prior to doing so.

Inform the patient, preferably by certified mail, of your decision. Spell out your reasons, with a reminder that these problems were discussed, and that a warning was issued and not heeded. If the patient belongs to a third-party health plan, be certain that you are acting within the stipulations of your contract with that plan, and inform the payer in writing of your action.

Once again, you must clearly document in the patient’s chart exactly how he or she violated your office policies. This will minimize grounds for charges of discrimination of any sort. Be especially diligent about this step if the patient has any known physical or mental disability.

Give the patient a reasonable amount of time (30 days is common) to find another physician, and mention that you will address any emergent problems within the scope of your specialty within that 30-day period. To minimize any potential allegations of abandonment, include a list of competent physicians in your area (without any guarantees) who might be willing to assume the patient’s care. Alternatively, you can list the phone number or website of a local medical society that they can contact to find a replacement. Offer to transfer medical records to the new physician upon receipt of written permission.

File a copy or scan of the letter, the certified delivery receipt, and the returned signature card in the patient’s chart. While the law states that a first-class letter, properly addressed and stamped, is presumed to have been delivered, you don’t want any question as to whether the patient received written notice of dismissal.

Forcibly ending a physician-patient relationship is a significant event that should not be undertaken lightly. Again, dismissal should be a rare occurrence, a last resort.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

“I might have to close my office,” a colleague wrote me recently. “I can’t find reliable medical assistants; no one good applies. Sad, but oh, well.”

A paucity of good employees is just one of many reasons given by physicians who have decided to close up shop. (See my recent column, “Finding Employees During a Pandemic”).

[embed:render:related:node:246239]

At this point, you should also begin thinking about disposition of your patients’ records. You can’t just shred them, much as you might be tempted. Your attorney and malpractice carrier will guide you in how long they must be retained; 7-10 years is typical in many states, but it could be longer in yours. Unless you are selling part or all of your practice to another physician, you will have to designate someone else to be the legal custodian of the records and obtain a written custodial agreement from that person or organization.

Once that is arranged, you can notify your patients. Send them a letter or e-mail (or both) informing them of the date that you intend to close the practice. Let them know where their records will be kept, who to contact for a copy, and that their written consent will be required to obtain it. Some states also require that a notice be placed in the local newspaper or online, including the date of closure and how to request records.

This is also the time to inform all your third-party payers, including Medicare and Medicaid if applicable, any hospitals where you have privileges, and referring physicians. Notify any business concerns not notified already, such as utilities and other ancillary services. Your state medical board and the Drug Enforcement Agency will need to know as well. Contact a liquidator or used equipment dealer to arrange for disposal of any office equipment that has resale value. It is also a good time to decide how you will handle patient collections that trickle in after closing, and where mail should be forwarded.

As the closing date approaches, determine how to properly dispose of any medications you have on-hand. Your state may have requirements for disposal of controlled substances, and possibly for noncontrolled pharmaceuticals as well. Check your state’s controlled substances reporting system and other applicable regulators. Once the office is closed, don’t forget to shred any blank prescription pads and dissolve your corporation, if you have one.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

“I might have to close my office,” a colleague wrote me recently. “I can’t find reliable medical assistants; no one good applies. Sad, but oh, well.”

A paucity of good employees is just one of many reasons given by physicians who have decided to close up shop. (See my recent column, “Finding Employees During a Pandemic”).

[embed:render:related:node:246239]

At this point, you should also begin thinking about disposition of your patients’ records. You can’t just shred them, much as you might be tempted. Your attorney and malpractice carrier will guide you in how long they must be retained; 7-10 years is typical in many states, but it could be longer in yours. Unless you are selling part or all of your practice to another physician, you will have to designate someone else to be the legal custodian of the records and obtain a written custodial agreement from that person or organization.

Once that is arranged, you can notify your patients. Send them a letter or e-mail (or both) informing them of the date that you intend to close the practice. Let them know where their records will be kept, who to contact for a copy, and that their written consent will be required to obtain it. Some states also require that a notice be placed in the local newspaper or online, including the date of closure and how to request records.

This is also the time to inform all your third-party payers, including Medicare and Medicaid if applicable, any hospitals where you have privileges, and referring physicians. Notify any business concerns not notified already, such as utilities and other ancillary services. Your state medical board and the Drug Enforcement Agency will need to know as well. Contact a liquidator or used equipment dealer to arrange for disposal of any office equipment that has resale value. It is also a good time to decide how you will handle patient collections that trickle in after closing, and where mail should be forwarded.

As the closing date approaches, determine how to properly dispose of any medications you have on-hand. Your state may have requirements for disposal of controlled substances, and possibly for noncontrolled pharmaceuticals as well. Check your state’s controlled substances reporting system and other applicable regulators. Once the office is closed, don’t forget to shred any blank prescription pads and dissolve your corporation, if you have one.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.

“I might have to close my office,” a colleague wrote me recently. “I can’t find reliable medical assistants; no one good applies. Sad, but oh, well.”

A paucity of good employees is just one of many reasons given by physicians who have decided to close up shop. (See my recent column, “Finding Employees During a Pandemic”).

[embed:render:related:node:246239]

At this point, you should also begin thinking about disposition of your patients’ records. You can’t just shred them, much as you might be tempted. Your attorney and malpractice carrier will guide you in how long they must be retained; 7-10 years is typical in many states, but it could be longer in yours. Unless you are selling part or all of your practice to another physician, you will have to designate someone else to be the legal custodian of the records and obtain a written custodial agreement from that person or organization.

Once that is arranged, you can notify your patients. Send them a letter or e-mail (or both) informing them of the date that you intend to close the practice. Let them know where their records will be kept, who to contact for a copy, and that their written consent will be required to obtain it. Some states also require that a notice be placed in the local newspaper or online, including the date of closure and how to request records.

This is also the time to inform all your third-party payers, including Medicare and Medicaid if applicable, any hospitals where you have privileges, and referring physicians. Notify any business concerns not notified already, such as utilities and other ancillary services. Your state medical board and the Drug Enforcement Agency will need to know as well. Contact a liquidator or used equipment dealer to arrange for disposal of any office equipment that has resale value. It is also a good time to decide how you will handle patient collections that trickle in after closing, and where mail should be forwarded.

As the closing date approaches, determine how to properly dispose of any medications you have on-hand. Your state may have requirements for disposal of controlled substances, and possibly for noncontrolled pharmaceuticals as well. Check your state’s controlled substances reporting system and other applicable regulators. Once the office is closed, don’t forget to shred any blank prescription pads and dissolve your corporation, if you have one.

Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@mdedge.com.