As I See It

Passing the Baton Without Exiting the Race

Reflecting on the past, embracing the future.

By Paul S. Koch, MD, Editor Emeritus

When we opened our practice 30 years ago, we started from scratch. We grew up in the town where we set up shop, so we knew we'd do well eventually, but the fact of the matter was that even our family friends already had eye doctors. There was no rushing crowd on opening day. With that underwhelming start behind us, we started to build a practice.

We still have the appointment books from our first few years. There were days when only four patients came in. When the movie E.T. came out, we had no one on the schedule for the afternoon and the phone wasn't ringing, so we all went to see the movie at the two o'clock matinee.

A Family Affair

This “we” I'm talking about includes me, my sister the optometrist and my wife, who answered the phones and did all the office work. We worked hard, but expenses were wild. It took us into our third year before our cash flow was strong enough that we could finally breathe. Whenever a patient called after hours, I always went in. Twenty dollars here and there went a long way to paying the bills back in those days.

Jump forward six years and we were busy enough to think about tripling the size of our office. Unfortunately, the business of the practice was overwhelmed and unraveling. Enter then our businessman brother, who took over responsibilities on that side of the ledger.

Jump again to a few years ago. Now we had 20 doctors, seven offices, three refractive centers, an ambulatory surgery center and too many birthdays. All of us were approaching 60, and we were stuck. What would we do with this big organization? What were our options?

We looked at selling the practice to our younger doctors. We looked at joining forces with other regional practices. We even looked at an ESOP — an employee stock ownership plan. None of them were suitable. Hmm. Were we stuck?

The Business of Medicine

We shifted focus from passing on a “medical business” to passing on a “business,” period. That means doing what they teach in business schools: cleaning up the books by enhancing your best-performing assets and jettisoning your poorly performing assets. It means watching the revenue closely, while eyeing the expenses to separate the necessary from the avoidable.

Finally, we decided to put the word out that we were on the block. We were looking for something very specific — a partner to carry on the strong patient-centric practice we had developed; someone who shared the same ethics and values we held.

One day, after we had kissed a few frogs, a handsome private equity firm came in to look at us and swept us off our feet. They wanted to work together over the long term to develop a stronger practice that put the patient first, knowing that all success would flow from that. Over the course of many months of discussion, we learned that we were on the same page on almost every theme. If we had to design a strategic partner, we could not have sketched it better.

We did the deal, and now have a new administration drawn not from medicine, but from the world of business. Since then, our collective mantra has been, “What can we do better?” How can we take better care of our patients? How can the practice be better? How can our staff grow and be nurtured in this new environment?

It's important for private practitioners of a certain age to plan for the future. But that need not end your involvement in the practice you built. In my experience, our new collaborators revitalized my enthusiasm for it.

And so, after 30 years leading a private practice, I'm in a new situation. I saw the practice improve almost immediately as their energy flowed through the offices, and now I'm privy to plans and ideas that I can't wait to see implemented. This is really exciting and I'm glad I had a chance be a part of this before the day when I must inevitably be put out to pasture. OM

Paul S. Koch, MD is editor emeritus of Ophthalmology Management and the medical director of Koch Eye Associates in Warwick, RI. His e-mail is paulkoch@kocheye.com.