Making the most of your practice at retirement

Dr. Sullivan

But Walter G. Sullivan, M.D., J.D., a retired plastic surgeon, wants doctors to know that that's not necessarily true — and that the way a surgeon decides to leave a practice can have a big impact on his or her future economic well-being.

"A surgeon spends years making his or her practice as efficient and friendly as possible, and it isn't always just the surgeon's reputation that brings patients in," Dr. Sullivan says. "The fact that the people in the office are nice and treat patients well contributes to a surgeon's success. So it may be possible for a surgeon to sell his or her office to another doctor who will be able to pick up where they left off — and be quite happy to do that."

He says goodwill often isn't considered "real," but he contends it's a very tangible commodity in a cosmetics practice, and can be sold to benefit both a retiring and a starting cosmetic surgeon.

He told the recent meeting of the American Society of Plastic Surgeons here that, if done properly, the transfer of a practice can be a win-win situation.

"If a surgeon just hangs it up and quits, everything really is lost. Those patients will go somewhere, but they will scatter all over," he says.

Dr. Sullivan's recommendation? Bring in a new surgeon to buy the practice. He or she will get a running concern and built-in clientele, and the retiring surgeon can get an ongoing income from the sale of a valuable property.

"If you bring someone in, patients will probably stay with the practice, and the surgeon buying the practice will have virtually the same cash flow you had — and they will pay you for that privilege," he says.

The key, according to Dr. Sullivan, is to bring the surgeon in ahead of time, before the outgoing surgeon retires, and work together to transition the practice. He says this should all be done after the outgoing surgeon has set a retirement date.

"The most important thing about bringing someone in who is going to take over your practice is that he's definitely committed to buying your practice; you've already agreed upon the price and the terms, and you are committed to leaving," he says. "There is a definite day when you will be gone."

That creates a tremendous incentive for both surgeons.

"The new person wants to be as busy and as successful as possible because he wants to be compensated for what he is buying — and he's going to start paying you immediately based on what you agreed," he says.

"The outgoing surgeon wants the new doctor to do as well as possible, so there is no sense in hogging patients or trying to keep the good ones, because he's going to be paying you. You want him to succeed."

Dr. Sullivan says it doesn't matter how long the transition period lasts, although he thinks six months is pushing it on the short end. And if the retiring doctor stays too long, it can be disheartening to the incoming surgeon. A period of a year of so, when long-term patients can meet with and become accustomed to the new physician, can be beneficial for the practice.

It's hard starting out as a cosmetic surgeon, Dr. Sullivan tells Cosmetic Surgery Times. Doctors can be well-trained and enthusiastic, but they don't usually start out with an established clientele. That takes time to build.