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Joining forces can make for increased income, better patient services, and a practice that third-party payers find more attractive.
In medicine, going it alone has its advantages. A solo practitioner has total control over clinical, financial, and scheduling decisions; there's no need to deal with partners' idiosyncrasies; and a small setup often means low overhead. The drawbacks of one-physician arrangements are equally apparent. To name three: there's no one else to help handle the workload, access to managed care contracts may be limited, and there might not be enough patients to develop profitable ancillary services.
If you're a soloist who has decided that the cons of that practice model outweigh the pros, you have an important decision to make. You can invite another physician to partner up with you. You can hire an associate, perhaps from the most recent crop of third-year residents. Or you can merge with another soloist whose practice is already up and running and who can readily bring an income stream, a patient load, and experienced staffers to the table.
"Merging with one or two other solo physicians isn't without risks," says Jack Valancy, a practice management consultant in Cleveland Heights, OH. "But the other physicians are 'known quantities' with established practices. Risks can be minimized and the possibility of success increased if the physicians have a good relationship going in, exercise due financial diligence, and put together a solid business plan."
Before moving forward, consider the reasons that you want to merge with another physician, says attorney Sandra E. D. McGraw, CEO of The Health Care Group in Plymouth Meeting, PA. These might include:
Once you've considered the "why," think about the "who." Because a business merger is like a marriage-complete with a contract that consultants liken to a prenuptial agreement-compatibility is essential. If you're looking for a long-term professional relationship, you'll want to merge with someone who is roughly the same age as you are. But May/September mergers also have their benefits. "An older doctor who wants to work fewer hours might consider merging with a younger physician who has a smaller practice and is willing to take on some of the older doc's patients," says Robert G. Baldassari, a CPA in Fairfax, VA. "Conversely, a young physician might consider a merger with an older doctor in order to expand her practice faster than is possible simply from referrals."
H. Christopher Zaenger, a practice management consultant in Barrington, IL, suggests teaming up with a physician who has a similar work ethic and practice patterns, and shares your ideas about call and insurance plan participation.
The more familiar you and your staff are with the other physician's protocols, the better. As part of a premerger effort to assess compatibility, Sandra McGraw arranged for each participant's office manager to visit the other's practice. "They pulled charts to review documentation, looked at which codes were commonly used, and assessed whether the office's practice patterns jibed with their own," she says.