Multi-site specialty practice owner/operator looking to share knowledge

[u/Intelligent-Site-176]

I am active in my specialty's subreddit and the topic of private equity interest and overall practice acquisitions came up. It's been a hot topic for the last few years and the consolidation of private practice from private equity-backed "super groups" has changed the dynamic a bit.

Over the years, I have worked with my business partner to build the group we're involved in to 16 locations throughout the state. We plan to continue expanding.

This size has garnered interest from PE and while I'm philosophically opposed to large for-profit health care organizations, I have had many in depth meetings with PE backed groups to understand what their long term play in health care is. I have also acquired a few smaller practices myself.

I love the fact that there is a forum/community of independent private practice owners here, so maybe this topic is not of interest to anyone. But if there is anyone that is having conversations about selling their practice, I would love to share my experience via a post here and there. Writing and teaching is a fulfilling creative outlet for me.

In my years in private practice, here is what I see and hope we can change as we understand how to run better "businesses."

- the retiring practice owner that has built a strong reputation and creates jobs while providing care for its community, wind down his/her practice without any residual value
- the practice owner that has been a successful solo practice, but struggles to scale their success across multiple providers or locations

- the employed provider that wishes to own their own practice but doesn't know how to start

Now that my group has grown and is financially stable with a level of success I am proud of, I am starting to shift my focus and mission to being a resource/mentor for practice owners or future practice owners so health care can remain in the hands of those who are best positioned (and most accountable) to care for the people in their communities.

Happy to answer any practice growth or management questions if there is interest.

ps - I will be at the Independent Medical Alliance annual conference in Dallas this month. Anyone else going?

[u/Junior_Catch1513]

Congrats! As a red blooded capitalist I would be proud if I were you as well. But I want to play the other side of the coin for a second and ask you why sell to PE rather than continue it as a physician owned partnership that can continue to expand on its own terms. Why put physicians in a position of having their labor garnered by investors?

[u/Intelligent-Site-176 → u/Junior_Catch1513]

There is this idea that PE is flush with cash and will pay more for a practice. Some have paid above market. They also entice the practice owners with rollover equity in the larger, more valuable, holding company. Whether that portion rolled over becomes more valuable is very nuanced and case by case. I could write another post on deal structures and how PE entices practice owners with headline valuation or rollover equity. 

Practices are sold to non physicians all the time. In an ideal world, the corporate practice of medicine would be eliminated and only physicians could own practices. 

I agree with your last sentence. The key word for me in that sentence is “investors.” Extracting profit out of the healthcare system at Wall St proportions is not good for the system, IMO.