Costs After Fm Residency

[k508]

Can someone explain to me what sort of costs there are when taking over a practice from a retiring doc? I can understand the significant costs if you want to start your own practice.. but I'm a bit confused about where the costs are when you're stepping into something already set up.

 

Thanks!

[JohnGrisham]

Can someone explain to me what sort of costs there are when taking over a practice from a retiring doc? I can understand the significant costs if you want to start your own practice.. but I'm a bit confused about where the costs are when you're stepping into something already set up.

 

Thanks!

The costs wouldn't be extremely different - you simply just avoid start up costs(fixed costs), but all of the regular ongoing variable costs would still be in place (staffing, leases for infrastructure, facilities utilities, EHRs, ongoing maintenance and repairs etc). 

 

Generally, unless you are well connected(taking over a family members practice), most retiring docs will charge a one time "take over" fee. If you think about it, even if some patients opt not to continue on with the new doc, most will out of necessity(especially true if you aren't in an urban centre). So the retiring doc has an more or less sucessful business they can hand off, but will know they can charge a one time fee in the short term, for your long term benefit of cash flow income. Depends greatly on the specific clinic, locale, patient base, etc etc how much this would be. In some cases maybe nothing at all.

[hking03]

The costs wouldn't be extremely different - you simply just avoid start up costs(fixed costs), but all of the regular ongoing variable costs would still be in place (staffing, leases for infrastructure, facilities utilities, EHRs, ongoing maintenance and repairs etc).

 

Generally, unless you are well connected(taking over a family members practice), most retiring docs will charge a one time "take over" fee. If you think about it, even if some patients opt not to continue on with the new doc, most will out of necessity(especially true if you aren't in an urban centre). So the retiring doc has an more or less sucessful business they can hand off, but will know they can charge a one time fee in the short term, for your long term benefit of cash flow income. Depends greatly on the specific clinic, locale, patient base, etc etc how much this would be. In some cases maybe nothing at all.

I'm sorry, but I feel as though you are mistaken... Of the retiring docs I have worked with none have charged a "take over my practice fee". Of the new docs I've worked with none have been charged a fee to take over a practice either.

 

The fact is most practices can't give their patients away...

[ralk]

I'm sorry, but I feel as though you are mistaken... Of the retiring docs I have worked with none have charged a "take over my practice fee". Of the new docs I've worked with none have been charged a fee to take over a practice either.

 

The fact is most practices can't give their patients away...

 

It may be region-dependent, but my understanding is that take-over fees are quite common. At a sheer minimum, retiring physicians want to be compensated for the material costs of an established practice - building, equipment, EHR - even if the patients themselves are being given away for nothing. Giving away expensive infrastructure for free makes very little sense.

 

Now, I have heard of retiring physicians charging for the patient roster itself as well, though I don't know how successful those efforts are - it's not a deal I would take in the current environment unless I had no other option or if the practice had an extraordinarily attractive set-up.

[JohnGrisham]

I'm sorry, but I feel as though you are mistaken... Of the retiring docs I have worked with none have charged a "take over my practice fee". Of the new docs I've worked with none have been charged a fee to take over a practice either.

 

The fact is most practices can't give their patients away...

Weird, my GP just retired and charged quite a hefty fee(this is in the lower mainland in BC) and I know of another as well, and he was spouting off numbers other docs he knew (saying how cheap he was doing it etc)).

 

As for patient base, he gave his patients huge lead time that he was retiring and that there was a doc taking over. He said about 90% stayed on. Really, with the issue of accessibility to a family doctor(not walk in) most people will usually stay on. If not to just try it out and see how the relationship goes. Only the really complex care ones that might not be in the realm of the new FM doc have much to worry about or specific care types.

 

The doc taking over is in mid 30s, and apparently is actually making sure to spend weekends reading up on the new patients and " frequent visitors" (neat function of the EMR they use to see what people are coming in more frequently in a specified time range).

 

Maybe in the area you live its not common, but seems quite common in Vancouver for well established old practices. I mean, why would they give you all their equipment and already set up, fully functioning office with all the kinks and processes worked out...for free? It takes time to get a office in running order and lots of late hours. Not to mention, hopefully the staff will stay on, and that is a huge help for continuity, as they are a goldmine of information: patient insights, idiosyncrasies of the office, any other unique things you may not have thought of but should know about running the office etc.

 

EDIT: should clarify, these are generally older practices where the GP owns the infrastructure or has a good reasonably prices long-term lease hold on the office space. And then of course everything within the walls are owned by the GP etc.

[booradley83]

So in Ontario is it still difficult for a new FP to get into a FHO?  Fee-for-service FP seems to be a real quick way to burnout!  Also, from what I've been discussing with FP's in a FHO; average billings of 400k are not uncommon.  How realistic is it to be able to bill 400k as a FP nowadays, specifically in the GTA area?

[youngdad]

Uhh, in BC you don't pay a penny to take over a practice.  You look for signing bonuses. 

 

Edit: And you beat the other offers off with a stick!

[ralk]

So in Ontario is it still difficult for a new FP to get into a FHO?  Fee-for-service FP seems to be a real quick way to burnout!  Also, from what I've been discussing with FP's in a FHO; average billings of 400k are not uncommon.  How realistic is it to be able to bill 400k as a FP nowadays, specifically in the GTA area?

 

FHOs positions are more at a premium these days, particularly in the GTA. Depends on where you're working, since rural positions are still relatively easier to obtain. FHO billings are a bit complicated, but I wouldn't expect $400k for a run-of-the-mill office-based practice, particularly in the GTA. It's the non-standard services - like EM coverage - that seem to bring in the extra cash for FM docs and those are far less common in the GTA where specialists are abundant.

 

Uhh, in BC you don't pay a penny to take over a practice.  You look for signing bonuses. 

 

Edit: And you beat the other offers off with a stick!

 

Who's paying this signing bonus? Maybe the system is different in BC, but I can't think of much incentive for individual physicians to pay others to take over their practice. I can see some giving the practice away for free, but not providing a signing bonus.

[booradley83]

Hi,

 

 

   So are FHO positions still available?  What is the correlation between patients and billings? Like for example, does 1000 patients equate to roughly 200k billings annually?  On average?  How long does it take to build a practice?  What is the average patient panel size?  What can a typical FP doc expect to bill annually?