By Chuck Falci, CPA
When faced with succession planning, many radiology groups take a spontaneous approach. Perhaps they haven’t mapped out a strategy for the various scenarios that could take place when leadership retires, or implemented solutions for radiologists who wish to slow down before retirement. The reality is that that radiology practices take great pains to create a clear and well defined path for physicians to enter a group’s voting class but offer far fewer options when it comes to an exit strategy for those contemplating slowing down or retiring altogether.
Succession planning is more than the process of finding another body to hire into the practice when someone waves the “white flag’ of retirement. This truth becomes most evident when one of the group’s leaders start to indicate that they are ready to start slowing down. Let’s face it; most radiologists are not fighting each other to become the leaders of their group; they are just grateful if one person is willing to step up and deal with the additional responsibility. All the more reason to create an environment that is friendly to a thoughtful “transition of power”.
A trusted and experienced practice manager is invaluable to this process. As an independent but invested third party, practice managers can often:
The ability to accommodate members of the practice who have expressed an interest to cut back by expanding the options available to their exit strategy, is just as important as developing tomorrows leadership. Important to the process is the ability to analyze generational differences, as well as create processes and policies that groups can develop and implement to maintain harmony and stability even through a transition of leadership.
Given the healthcare industry’s instability, there is a Catch-22 inherent to handing over the leadership reins. Radiologists who wish to be leaders must keep in mind that their goals for the long term may contrast with what is already established in a group. Older leaders, on the other hand, must have the desire to train younger radiologists and slowly let go of the reins. Neither scenario will be easy or peaceful unless there is some planning involved. The generational differences are often vast, as outlined below:
Due to these sometimes polar generational differences, groups should take a formal, structured and collaborative approach to succession planning. Taking the time to thoughtfully develop and implement policies and procedures now will ensure a measure of stability during future transitions
Understanding the life expectancy of a group means having a reasonable idea as to how many more years each physician wants to work full time, and how many physicians would be interested in continuing to work on a part-time basis before retiring altogether. A great approach to take is the distribution of a blind survey to gather this information so that respondents feel confident they can answer candidly. The following questions should be considered in such a survey:
(Options are: more vacation, less vacation, or, the same amount of vacation)
The answers to the above survey can provide a general timeline for when practices should begin recruiting and transition efforts. Although individual plans and preferences might change, the feedback will likely be more valid than not, while also arming a practice with enough information to plan for adequate staffing in advance – and with greater flexibility.
Let’s apply the use of a survey to the example of a Radiology practice that experiences a sharp decline in exam volumes and shareholder earnings because its hospital system partner closed the main campus. If the survey results state the group’s average age is over 50, such findings would be very helpful from a staffing standpoint if two members indicate they are contemplating retirement in the near term. If seven out of eight respondents answered “YES” to question number three, as another example, this could provide the impetus to develop a “Part-Time Shareholder” policy.
Using a list of questions that touch on the most vital issues (pay, call, vacation and voting rights to name a few), it is important to guide the radiology group through the process over the course of several monthly meetings. At the end of the process the group can then agree on a policy that is simple, straightforward and fair. Many similar approaches have yielded reduction in labor, increased physician productivity, nominal improvements in annual exam volume and an increase in average shareholder earnings for groups.
Many times, part-time shareholders or past group presidents can continue to mentor the group’s (much younger) new president, because the individual remained accessible and engaged but not nearly as stressed and busy as he or she had been the year before.
As illustrated by this example, groups should decide on new policies that adapt to the schedules and needs of outgoing members, such as the transition to a part-time schedule. There are often one or two “elder statesmen” in a group that have developed great relationships within the hospital. It is in the group’s best interests to work with those more senior partners, allowing new leaders the opportunity to work closely with them and to establish their own rapport with hospital administration.
Groups should ask themselves, which radiologists are the right fit for the group’s current situation as well as in the future? If current leadership can identify the type of leader they believe the group needs based on their experience and knowledge, as well as the personality type, then they can begin to narrow down the best choices. Speaking to potential new leaders and assessing their level of interest right away is key to identifying new leaders. Planting the seeds with potential leadership is important, as a way to determine whether or not the new individual under consideration is amenable to the new position and possesses the right temperament.
Most radiologists did not set out on careers in medicine with the intention of becoming business leaders, so practices should invest in supplementary training for their future leaders. This might include various tactics and effort on the part of the existing staff:
Training should definitely be hands-on, and as opportunities arise, groups can begin to invite those up and coming leaders to be a member of the board and attend hospital administration meetings. Evidenced in the specialty’s efforts, many radiology organizations are recognizing the need to develop leaders in the challenging environment of healthcare management, such as the ACR’s Radiology Leadership Institute (RLI), which works to prepare radiologists with critical leadership skills for advancing in practice leadership and strengthening the radiology profession.
In closing, maintaining good relationships and treating group members with respect, especially in a voting process, is a cornerstone in any approach to succession planning. Retaining great leaders also means showing them how well aging leaders and retiring members are treated upon leaving the group. As in any business, strategies that map out consistent processes and policies will make the process easier for everyone, and ensure ongoing group success in its succession efforts.
Chuck Falci, CPA is a Senior Practice Manager with Zotec Partners, the leading national provider of hospital-based radiology revenue cycle and practice management services.