South Florida Hospital News
Sunday August 25, 2019
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October 2016 - Volume 13 - Issue 4

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It’s Never Too Early to Start Planning Your Exit Strategy

It takes time to build a practice. You have to put a lot of time, energy, money, heart and soul into growing your patients, your staff, your office locations and your reputation. But even if you love what you do, you don’t want to work forever; and like building a practice, exit strategy planning is a process, not something that happens overnight.

In fact, the longer you wait, the more limited your options may become.
 
You don’t want to have to rush the process and compromise on your goals for the next stage of your life. Starting the exit strategy planning process early can allow you more flexibility in developing short and long-term plans for your practice that tie back to your personal goals, such as maintaining the same lifestyle post-retirement. Also remember that it’s an evolving process. As your needs, your family situation, and your practice change, the plan should change as well.
In thinking about an exit, you will want your practice to remain attractive to future buyers, so this is not the time to wind it down. If profits diminish, so might the interest of a potential buyer, and in turn, your retirement options.
 
Preparation for an exit may include:
• Reducing overhead
• Controlling revenue cycle
• Compiling and reviewing financial statements
• Shortening accounts receivable (A/R) timeline
• Confirming compliance with regulatory and legal requirements
• Confirming compliance with payer reporting requirements, including the new Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requirements
• Maintaining practice records, including an inventory of the practice’s assets and allocation of the value of those assets
• Maximizing technology
• Maximizing value
 
One of the biggest factors to consider is when and how you will actually exit the practice. Will you continue working for some time after you sell the practice or will you leave right away? Allowing for a transition period can reduce turnover by giving your patients and staff time to adjust to the changes and establish trust in new practice leaders. This period can also be an important time for sharing institutional knowledge that may otherwise get lost in the shuffle.
 
These are just a few examples of some of the factors involved in exit strategy planning for physician practices. As you can see, there is a lot to consider. That’s why it’s never too early to start planning.
Kevin Fine is a director of healthcare advisory services in the Miami office of Kaufman Rossin, one of the Top 50 CPA and advisory firms in the U.S. He can be reached at kfine@kaufmanrossin.com.
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