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Considering selling your practice to a hospital? Learn the typical steps to the process and the questions you'll want to ask before signing away your independence.
Las Vegas-The economics associated with the office-based practice of medicine aren’t what they used to be. Reimbursements are declining, overhead costs are increasing, and practices are facing competition from hospitals.
“Doctors are scared. They’re not sure what to do,” says Reed Tinsley, CPA, of Houston, Texas, who spoke at a recent gathering of the National Society of Certified Healthcare Business Consultants (NSCHBC).
As a result, many physicians are considering selling their practices to hospitals. Healthcare systems negatively affected in a similar trend that occurred in the 1990s, Tinsley says, are now tying productivity targets and other measures to their base salary promises.
If you are considering selling your practice to a hospital, Tinsley says the typical process works like this:
At the due diligence stage, doctors should ask themselves the following questions, Tinsley says:
“You’re about to lose 100% of your independence. Is it going to be worth it?” Tinsley says. “I always ask doctors: What are you getting out of this?”
Tinsley says that a practice sale may make sense for some physicians, including those who have been practicing for a long time and who don’t have strategies to transition to retirement. Other doctors may find mergers with other practices beneficial. Still others may decide to remain owners, at least for now.
Medical Economics moderated a panel discussion at the recent NSCHBC meeting. Look for coverage of the event in an upcoming issue.
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