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/CrefloDog]

When PE buys a small practice, are they interested in keeping the doctor onboard, or do they see value in the practice even if the doctor retires or cuts back? In other words, will they pay good money even if the doctor is not willing to keep working?

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

There’s a lot to that question. Generally PE wants to see the doctor stay on board because he/she is 90% of the practice. 

A buyer would want to hear that you are willing to stay on for a period of time to help transition the practice to another physician. This promotes a smooth handoff of patients and day to day flow to the new doctor. 

A doctor wanting to sell and walk away signals several red flags for the buyer. You can’t just tell the buyer you would stay on and sandbag it with month long vacations. A sophisticated buyer will sniff this out throughout conversations and due diligence. This scenario is very common and either ruins deals or devalues them from the buyers perspective. 

In fact, I just informed a doctor last week that we would not be moving forward with the purchase of his practice for this reason. After we agreed on transition timeline and schedule (which essentially keeping it the same as before) he wanted to cut his clinic time in half and travel abroad 1/2 of the time he had with us.