business of pediatrics

You Can Start a New Practice with an Established Patient Base

Pediatricians have many reasons to decide to start their own practice, and while the thought of being your own boss is exciting, the logistics of breaking away from your current role when you work for or with another pediatrician can be daunting. Anxiety aside, how you protect your new venture legally and financially and how you approach a split can make all the difference as your partnership dissolves. Here are some key tips from two pediatric industry experts for prospective new practice owners looking to make a split -- as effectively as possible.

When and Why To Dissolve a Practice Partnership

When a practice is dissolved, or when one or more physicians elect to leave a group, it can be for almost limitless reasons. A partner could have a dream of being independent, could see an opportunity in the market for a certain location or specialty, or there could be strife between partners that make it difficult for all parties to deem the business viable or successful. Whatever your reasons are, here are some signs that it’s time to consider a separation of partners:

  • The practice as an entity is closing and is not being sold to another physician; e.g., when a physician is retiring
  • Partner(s) are in serious legal or financial trouble, such as bankruptcy
  • Partner(s) disagree on business, moral, or ethical standards of practicing medicine
  • A partner is relocating to a different area with a new patient population
  • A physician is struggling to enact the changes they deem necessary to fulfill practice growth and patient care needs

A common thread throughout the many reasons to leave a practice is that the relationship simply isn’t working anymore. According to PCC’s Director of Patient Solutions Chip Hart and The Verden Group founder Susanne Madden, a physician should commit to surrounding themselves with “good people” -- people that have the same mission, have similar values, and can both offer support and constructive feedback to help the practice grow.

“Good partners and staff solve all your problems and poor partners and staff cause all of your problems,” Chip remarks in their webinar, How to Start a New Practice & Migrate Your Existing Patients. “That is the biggest secret to owning a small business. One of the biggest reasons for practices to break away is because you are partnered presently with the wrong people.”

Coming to the decision to break away from a practice, especially if you’re a partner and if you have an established patient base, is a tough decision -- but when it’s the best decision for you and your patients, it can also be an empowering one. When you’ve decided to split from your practice, you’re not alone, and there are plenty of tools at your disposal to protect your new venture, care for your current patients, and even your current relationships. The first tool is your practice partner agreement.

Your Practice Partnership Agreement

“Sometimes it’s just talking through things with your partners to say: ‘Look, it's clear, it's not working out. We're not getting along, it's run its course, I'd like to leave, here's what I'm thinking.’” -- Susanne Madden, The Verden Group

The partnership between two business owners, pediatricians, administrators, nurses, or otherwise, is based on a legal agreement -- the practice partnership agreement. This is critical to have on hand before even suggesting that you want to leave your current or set up shop in the next town. This outlines the legal obligations that you’ll need to adhere to if the split is less amicable than you hope. This means that you should review your agreement with a legal representative before moving forward.

Chip and Susanne agree that most practice partner agreements are not going to detail the finer points of what’s involved with a split -- compensation, the right to take patients or staff with you, or even the ability to take your patients’ data. What the agreement does represent is the groundwork to the important conversations that can help set up a new practice for success without burning bridges. It’s also crucial for recordkeeping.

Susanne suggests that when you’re prepared with what the agreement contains, you’re in a good position to begin negotiations. You may wish to negotiate compensation, non-compete clauses, and the possibility of a buy-out of the practice. Some agreements even have exit plans included, though if they do not, state statutes apply.

Since you’re still part of the partnership, together you may agree that some past terms in the agreement could hurt the practice or patients. For example, if the terms say you must give 90 days notice but the lease expires in 180 days, staying the extra three months could be courteous for the remaining physicians and also offer the departing physician more time to scout for locations and prepare their new practice.

Begin the negotiations with a conversation. Talking about these terms and how you’ll leave can be difficult if you’ve built a career and relationships with the people you work with. Beginning with the partnership agreement and an eye for a mutually amicable separation can make the process easier.

Legal Negotiations

Chip agrees that knowing the terms of your practice agreement is a great first step, and he suggests that physicians planning a separation have any renegotiations as well as the current agreement reviewed by a legal representative. As the Harvard Business Review points out, a lawyer can be a good mediator between parties if the negotiations are tense, but they can also point out the legality of the terms you choose and where you’re obligated to follow them.

For example, many courts won’t uphold a non-compete clause for physicians. In fact, some states forbid it. An ex-partner cannot tell you you cannot practice in the next town over or even next door. A lawyer can point out these discrepancies and suggest more reasonable terms.

Communicating Changes to Patients

A pediatrician in a new practice needs to see patients, but Chip cautions that departing physicians should absolutely outline their partnership terms and a basic timeline of your dissolution before communicating your intent to leave to patients and families. 

It’s easy to see why -- if you’re the physician remaining behind, you’re not only losing a partner’s income towards practice overhead costs, but now your ex-partner is taking the kids, too? Chip and Susanne joke that in their consulting work, they can often act as marriage or divorce counselors for business relationships. There are also legal reasons why you should be cautious speaking to families or staff about your departure, because it could be considered a breach of the non-solicitation clause in your partner agreement.

What physicians generally can do is to be thoughtful about their advertisement and branding for their new practice. You can create a new practice website and social media, post job ads online and in the local newspapers, and families and staff who know you and admire your work may give you a call. Chip again recommends that you consult a lawyer for exactly what to say and not to say to existing patients. 

Usually, you can communicate to patients general information about your departure, such as your availability over the next few months, where you can be reached, and who will take over their care if they remain at the practice. You could even offer a business card to families who express interest in seeing you after your move. Talking about your new location is also a great way to get referrals via word-of-mouth -- whether parents have friends in your new area or don’t mind the drive, you might end up seeing new and familiar faces at your new practice.

Preparing to Move Forward

Negotiations over a departing partner aren’t always ideal -- they can be stressful, painful, and even expensive if you or your partner decide to pursue litigation. Take the steps to protect the new practice you’re dreaming of with your partner agreement and with the right consultation to ensure that, even if feelings are hurt, you can walk away with a clear conscience and with enough planning to ensure your new practice is a success.

So, are you allowed to take patients or staff with you when you leave an existing practice? How can you negotiate breaking away while starting up a brand new practice, with all of the necessary tasks that go along with it, such as credentialing and making sure your new office has plumbing? Get the full story with Chip and Susanne in their webinar, How to Start a New Practice and Migrate Existing Patients.

Watch the webinar!

Allie Squires

Allie Squires is PCC's Marketing Content Writer and editor of The Independent Pediatrician. She holds a master's in Professional Writing from NYU.