And this is not because they stopped caring. But because the body and their schedule take a toll that a desk job cannot, and that toll compounds with age.

So the statement, “You’re a partner until you’re no longer a partner,” is a fine creed for a lawyer moving between firms. But it is a different story for a 63-year-old surgeon about to retire. And this is why a wind-down provision is important.

What Is a Wind-Down Provision?

The concept of a wind-down provision is simple: a physician should not have to go from sixty miles an hour to zero the day they retire. A wind-down lets a doctor ease out of the full weight of partnership over their final year or two, rather than slamming to a hard stop.

Outrightly, a wind-down benefits the doctor, but if structured well, it also benefits the group, and that reciprocity is what makes it work. It eases the burden of partner-level responsibilities for the doctor while preserving for them all or most of the benefits. A wind-down rewards years of service, and a group that operates as a business should always look for ways to reward good service.

On the other hand, a wind-down becomes the lever that makes succession happen for the group. When creating the structure, the group should let the partners know that for them to enjoy the benefits of a wind-down, they must commit to getting redeemed at the end of it.

The wind-down provision is how a group without mandatory redemption secures its partners’ commitment. And if the group has mandatory redemption, the wind-down makes it more palatable because the provision that says you must give up your equity also says you get to slow down when approaching retirement.

What “Slowing Down” Means in Practice

Now, you must keep in mind that a wind-down looks different for doctors in different practices. What it means for someone with a surgical practice will not be the same for a non-surgical one. So, you need to ask what the actual burden of a full-time membership is, and provide relief for them.

When you start asking this question, two concepts come up.

The first and the biggest is the overhead relief. A partner on a productivity formula lives under constant pressure to generate enough to absorb their share of the overhead. In such a case, you can lift some of that burden by relieving the winding-down doctor of a portion of overhead, or set the formula aside entirely and simply pay them a percentage of their collections.

This can be roughly the group’s overhead percentage, minus a bit more so the arrangement still turns a small profit for the group rather than merely breaking even.

The second is taking call. Coming out of the call pool is often the single most meaningful relief you can offer, because the call is where the punishing physical and emotional demands concentrate.

For example, for an OB practice, this could mean no longer doing deliveries, or handling only daytime cases for existing patients. These burdens make the last years hardest, and removing them is what makes a wind-down feel like the reward it is meant to be.

Who Qualifies for a Wind-Down and for How Long?

When considering a wind-down provision, you have to factor in eligibility, and it should not be driven primarily by age. Why? Because the whole purpose of a wind-down is to address the end of a career, not to let a physician in their forties announce that ten good years is enough and they would like to coast.

Therefore, the qualifying age should line up with the age at which, for the health of the business, you want doctors to start redeeming so younger physicians can ascend. What that age is depends on the group and the specialty, but you are generally looking somewhere in the sixties.

Now, as to whether years of service should be factored in, I believe that it should largely not matter, but within reason. You do not want someone joining the group and announcing a wind-down one year later. A minimum of five years is probably appropriate.

What you should keep in mind is that this is not purely a gift to the doctor. It is a system that serves the group by enabling orderly succession, so gating it behind twenty years of service works against the purpose.

As for the length of the wind-down, a year or a year and a half is fine. If it is shorter than a year, it is not meaningful to the doctor. And if longer than two or two and a half years, it puts a real burden on the group.

So, work backwards from your target redemption age, and build in about six months’ notice so the group can plan for coverage and recruit. As a result, you will land on a period long enough to matter to the physician but contained enough to serve the practice.

The Real Objective

Finally, every choice in a wind-down provision aims at the same goal: a smooth transition. You do not want an abrupt stop that strains the group without coverage or an indulgent one that lets a partner drift for years.

Remember that a well-built wind-down is good for the doctor, and allows them to end a demanding career with dignity rather than a cliff. It is also good for the group as it secures succession and coverage. And lastly, but most importantly, it is best for patients, who are handed off thoughtfully from one physician to another, instead of getting abandoned at a hard stop.

My father was right about a partner being a partner until they are no longer one. But as medicine asks something harder of its doctors at the end, the group must recognize it, plan for it, and honor the doctor and itself.

This article is the last of a three-part series on partner redemption, following the redemption, and the mechanics of the buyout. You can listen to the full discussion on my podcast, Group Practice With Neal Goldstein. The link is in the button.

Neal T. Goldstein is a healthcare attorney and partner at Patzik, Frank & Samotny Ltd. (PFS), representing physician groups and individual physicians in corporate and transactional matters. This article is general commentary, not legal advice for any specific arrangement. The views expressed by Neal Goldstein and guests of the podcast are their own and do not necessarily reflect the opinions of PFS, nor should the views be attributed to any client of PFS.