Thinking of buying a private practice.

[HbA1c15]

Hi Guys,

a great opportunity could be cooking up for me to buy my own practice from a retiring podiatrist. The pod is looking to retire in a year or two. What should I look out for. What are questions I should keep in mind and discuss with the broker and current pod owner? Thank you in advance for all the support and advice.

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[Pronation]

You should not buy a practice from a greedy old podiatrist that will grossly overvalue their junk. Do they clip toenails all day? These patients are worth nothing, but I assure you this podiatrist will try to squeeze a premium for them in their delusional valuation of this turd practice. I would pay money only for tangible assets. Otherwise just open up your practice...

edit: So in the other thread you said you just started a hospital gig and now you're looking at buying a practice? Huh?...

 

[heybrother]

You cannot wait 1-2 years for him to retire. That's an eternity. Either he's ready to go or it isn't happening. You do not want to work with him / be in his office / watch him piddle around the office / get trapped by him listening to stupid podiatry stories. In 1-2 years you want to be hiring your future partner not cleaning up the mess he's left behind. You're going to have to fire the staff too.

 

[air bud]

You cannot wait 1-2 years for him to retire. That's an eternity. Either he's ready to go or it isn't happening. You do not want to work with him / be in his office / watch him piddle around the office / get trapped by him listening to stupid podiatry stories. In 1-2 years you want to be hiring your future partner not cleaning up the mess he's left behind. You're going to have to fire the staff too.

literally every word you typed is the truth

 

[GreenHousePub]

Is this a heavy HMO or PPO territory? How many podiatrists are in the area?

 

[619]

As other have said, not worth buying the practice. Creating your own new LLC, tax ID, group NPI, business license etc is quick and easy. Getting credentialed with insurance panels takes about 3 months. It may seem long but those things can be done on the back end before you even open your door.

For me, I gave my former job about 7 weeks notice (I was already half way with doing my insurance credentialing for my new practice and 100% fully committed on leaving). I drove to my new practice every weekend while still working to set things up. The last day at my old practice was a Friday and I started seeing patients at my new practice on Monday. I was only credentialed for Medicare and Blue Cross Blue Shield when I opened up. Other insurance approval came through later on. I did not wait to get on all the insurance panels before I started seeing patients at my new practice. It takes a lot of planning but it can be done. My mind is 100% at peace knowing I don't have to worry about cleaning anyones mess.

You can buy the tangible assets (tables, chairs, instruments, x-ray etc). The hard assets should be less than $50K. X-Ray machine alone if it is still new and digital will be valued at about $20k-$25k.

If the pod is renting space, then you can also take over the lease location. You ask for 3 months grace period (no payment) after signing the lease so you start insurance credentialing with your new office address, new LLC, tax ID, group NPI, business license, business bank account etc You will need an office address for everything. Less hassle than trying to use your home address or PO box to start all these then switching it up later.

 

[619]

Is this a heavy HMO or PPO territory? How many podiatrists are in the area?

To me this is irrelevant. People are always afraid of how many podiatrist in the area. Every big city or even mid-sized metro area already have tons of podiatrist already there. Just google it.

Except if you go rural in the middle of no where, there is always going to be a podiatrist nearby. Podiatry is in high demand and patients will always find you. I open my practice and there is about 4 different podiatry offices all within 2 mile radius of me (we all have offices next or close to the hospital). They are booked out and I get a lot of new patients wanting to be seen the same day or same week who are calling different offices to get in. In fact 2 of the podiatry offices next to me are part of 2 competing big super groups that have offices in every corner of the state. That did not still deter me. I am getting busier every week and it is not even summer yet when it will be more busy.

Look at your area and see how many dentist offices are around. In a street, you can find like 10 dental offices literally next to each other. And they are all busy and thriving. I know the dental practice model is different and some specialize but my point is, any major area in any city will already have podiatry offices there.

Key is to pick a location you enjoy and want to live in for the next 20-30 years and you don't have to worry about who opens shop next to you.

Final thought, let us assume you find a niche place, perfect place (perfect weather, good school zone, good insurance and income population) and you open your podiatry office there, guaranty in the next few years, 2-3 other podiatrists will move in and open offices there also.

Patients don't care who is the first podiatrist to move into the area. So stop trying to worry about how many podiatrist are in the area. Just do your thing, be likable, be personable, good bedside manners and be confident in your skills and training. Patients will always find you.

 

[Shiyuan]

Stick with your infinitely better hospital gig. Don’t stress yourself out.

 

[Feli]

It is all up to you. You have options:

-work for hosptial/MSG/ortho/etc ... busy with fairly good income/benefits but little control of your marketing/staffing/equip/etc. 100+ DPMs are always waiting to take your job.

-work for other pod(s) ... usually busy and good place to learn prac mgmt, but lower income than MSG/ortho/hosp (as is always said here, this generally your worst option... although not so bad if it is a good successful doc/group to learn with)

-start your own practice ... best control but very low income in the early goings, tough to get cases for boards, tough to compete in some areas or hard to get loans n some economy climates

-buy someone out ... busier quicker but may have to re-shape it (1x net before you started is fair start point for negotiation... adjust based on equipment/staff/referrals/potential/etc quality)

In the end, it's up to you. All have their upside and their downsides. Plenty of partners in pod groups or hospital employed residency directors making $300k-400k+ still think they're overworked and underpaid. Some VA podiatrists or DPM group associates who see 50-60 patients per week with no on-call think they're overworked too. Plenty of solo docs working 30hrs per week seeing patients and netting $400k actually work 60hrs or even 70+hrs doing admin stuff and worrying about their business. It's often a grass is always greener thing... very individual.

...if you go the buyout route, the main things to look for are steady referrals from local primary care and other docs, goodwill to transition those refers, web presence quality, community prominence (when you tell people of the place, do they say "yep, know the place" or do they say "who"), staff training/morale, office looking dumpy or looking professional, and the overall room for growth. Those are your adjustors to potentially go up/down on valuation. A lot of those mediocre practices can be much more profitable... and they have a ton of growth potential via SEO, better website, adding a high quality associate/partner, etc. Many entrepreneurs (DPM or otherwise) start fairly strong and then fizzle out or get comfortable once they are doing well... "A man who stops advertising to save money is like a man who stops a clock to save time."
They get complacent, and they forget to keep meeting PCPs and spending on web marketing to replace the outgoing referral sources. They might have stayed with a biller or billing service that went from good to mediocre also. You can revive those offices and max them out if you like, esp if the area is fairly underserved or has weak competition. As for the buyout timeline, you need the price based on the year or few years before you arrive, and once you trigger the buyout, the seller doc works for you... and has finite stated timeline for exit (at which time you could part ways or keep him as associate/contractor).

 

[bloxxeeey]

As other have said, not worth buying the practice. Creating your own new LLC, tax ID, group NPI, business license etc is quick and easy. Getting credentialed with insurance panels takes about 3 months. It may seem long but those things can be done on the back end before you even open your door.

For me, I gave my former job about 7 weeks notice (I was already half way with doing my insurance credentialing for my new practice and 100% fully committed on leaving). I drove to my new practice every weekend while still working to set things up. The last day at my old practice was a Friday and I started seeing patients at my new practice on Monday. I was only credentialed for Medicare and Blue Cross Blue Shield when I opened up. Other insurance approval came through later on. I did not wait to get on all the insurance panels before I started seeing patients at my new practice. It takes a lot of planning but it can be done. My mind is 100% at peace knowing I don't have to worry about cleaning anyones mess.

You can buy the tangible assets (tables, chairs, instruments, x-ray etc). The hard assets should be less than $50K. X-Ray machine alone if it is still new and digital will be valued at about $20k-$25k.

If the pod is renting space, then you can also take over the lease location. You ask for 3 months grace period (no payment) after signing the lease so you start insurance credentialing with your new office address, new LLC, tax ID, group NPI, business license, business bank account etc You will need an office address for everything. Less hassle than trying to use your home address or PO box to start all these then switching it up later.

Whats the credentialing process like? This is one of those things no one ever explains or talks about in residency.

 

[malleolusman]

Whats the credentialing process like? This is one of those things no one ever explains or talks about in residency.

You need to have PDF copies of all documents like:
DL
Passport
State license copy
DEA copy
Board cert copies
Letters of reference - name/email/phone contact x 3 peers
Copy of malpractice carrier insurance
Copy of loss run statement if you have already practice somewhere; basically shows you have a clean record with no suits etc
Copy of APMLE pass letters
Copy of residency graduate certificate
Undergrad diploma copy
Grad school diploma copy
Fellowship cert copy

You should have all of these easily accessible on your desktop once graduating from residency. Find a credentialer, or apply for insurances on your own, or join an IPA (your best bet). See heybrothers posts.

Oh and also Invest in quality nail nippers. Your wrists will thank you.

 

[diabeticfootdr]

Find a credentialer, or apply for insurances on your own, or join an IPA (your best bet).

This is the best advice. Some billing companies will do it for you. And with payers you have to frequently recredential. You need to stay on top of it.

Some insurers may also require you to be on staff at a hospital and be BC or board-eligible.

 

[diabeticfootdr]

This looks very informative for young DPMs getting into practice!

California Podiatric Medical Association Webinar - Young Practitioners’ Seminar 2
Podiatry Success Pearls: Setting Yourself Up for Success
Tuesday, April 11, 6PM to 8PM

Hosted by CPMA and made possible by the generous support of PICA, this seminar is designed to help you navigate the maze from student to resident to successful young practitioner by getting your practice off on the right foot with pearls from the pros. The dynamic guest panel include:
• Bruce Dobbs, DPM, ABFAS
• Keith Greer, DPM, Esq.
• Christy King, DPM, ABFAS, ABPM
• Arman Kirakosian, DPM, ABPM, Director, CPMA
• Tea Nguyen, DPM
• Shahdad Saeedi, DPM
• Holly Spohn-Gross, DPM, President, CPMA
• Ebonie Vincent, DPM, ABPM, Director, CPMA
• Ross Taubman, DPM, President, PICA
• Renee Woo, DPM

Register TODAY at https://tinyurl.com/yc398udn