Q:

Hi Doc!

It's been a while since I've e-mailed you, and I want to thank you 
again for your help and guidance in years past!!

My question currently involves a partnership.  I''ve now been in 
practice 10 years, and I am struggling mightily with finances.  My 
dilemma involves balancing my overhead with decreasing 
reimbursement schedules and practice style.  Beyond all that, 
however, is an opportunity to join an old classmate of mine in his 
practice in Oklahoma.  I'm in Laurel, Maryland.  He is the opposite of 
me, in that he sees a heavy stream of new patients (10-15 per 
week), and thus his retention is not very good.  I'm just the 
opposite-about 3-5 new patients per week, and excellent retention.

In short, my wife grew up in the Midwest, and she misses the people 
(i.e., friendliness) and the lifestyle, whereas I feel ready for a 
change of scenery as well.

Could you provide any insight as to the feasibility of this scenario, 
and/or just general considerations to be aware of, etc.  It appears as 
if group practice could be a viable solution to staffing, overhead, 
etc.  Any thoughts?

Thanks Again!


A:

Thanks for the e-mail. First of all .. moving a practice and uprooting 
your family is an effort that takes much consideration. If you make a 
move based on emotions it may or may not be the best approach as 
only time will tell if it was best to stay and try harder. If you make 
the move based on reasonable business sense and foresee some light 
at the end of a tunnel then it can work out .. but even here time will 
tell.

From what you wrote there are some factors that may help in your 
ultimate decision. First .. you have a partner in your decision. Your 
wife is aware of your present situation and has no objection to 
moving back closer to home. Second .. you have someone you know 
that can offer you an immediate access to income and patient flow. 
So .. this being the case .. and you do wish to move .. and you 
considered every scenario to increase your present practice .. and 
you understand that you will be leaving ten years of work behind 
(hopefully selling it rather than just moving on) .. and you can 
visualize a smooth change .. and you think you can live with a partner 
or possibly start fresh on your own .. if these seem to be in the 
affirmative then go for it.

A few considerations. First .. friendship in business can be 
disastrous. A pleasant handshake with verbal agreements today can 
spell ruin tomorrow. My first recommendation .. if you choose to be 
partners .. is to hire an attorney and be prepared to spend $500+ to 
draw up a contract. True partnerships must draw defined lines 
concerning shares .. expenses .. new patients .. bills ..equipment .. 
malpractice concerns .. taxes and more. NEVER .. in no circumstances 
.. shake hands as friends and share a practice. His liabilities .. those 
not even visible .. may be yours.

Second .. decide how you are going to work together. Is his office 
large enough for you to be there at the same times or will you have 
to stagger hours. Will you be sharing expenses and staff .. if so .. 
decide how you will be handling present and future patients 
including call or walk ins. Decide how you will be marketing the 
community and if you or he does the work who will be benefiting 
when the phone begins to ring. He has the ability to get them in you 
have the ability to keep them .. okay .. how will you blend and who 
benefits financially .. will you be at a 50/50 arrangement (again the 
need for an attorney) will you be a partnership corporation (the need 
for a CPA)

Hope this helps. I recommend you visit Atlanta and come to the next 
Fernandez Seminar and talk about this with him. I can arrange it. If 
you have never been to his seminar you can attend free as my guest. 
Call them at: 1-800-882-4476

Have a Great Day

Dr. M