What your practice is actually worth, with Andy Colbert of Ziegler

Independent medical practices are being squeezed from every direction. Rising labor costs, shrinking reimbursement and a growing administrative load have made staying independent harder than ever.

That pressure is changing how physician groups think about mergers, private equity and hospital partnerships, and how they value what they have spent decades building.

Medical Economics Senior Editor Richard Payerchin sat down with Andy Colbert, senior managing director at Ziegler, a privately held investment bank that has focused exclusively on health care for more than a century. Colbert, who leads the firm's physician advisory practice and has advised on more than $6 billion in transactions, breaks down the scale it now takes to stay independent, why physicians so often misjudge what their practice is worth, and how private equity, hospital deals and management services organizations really compare.

Don't miss our recent episodes on concierge medicine, physician compensation, productivity vs. pay, and Medicare and Medicaid coverage of GLP-1 drugs.

Music Credits:

Velvet Sunday Drift by Tea Studio - stock.adobe.com

A Textbook Example by Skip Peck - stock.adobe.com

Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 – 0:28 | Cold open. Colbert on why clinical work alone no longer builds practice value.

0:28 – 1:31 | Introduction. Austin Littrell previews the episode and the conversation ahead.

1:31 – 3:18 | Meet Andy Colbert. Colbert traces his path from a family of physicians to leading Ziegler's physician advisory practice.

3:18 – 8:27 | The biggest shift in physician M&A. Colbert walks through the waves of consolidation, the roughly 40 to 50 physician threshold it now takes to stay independent, and why ownership means thinking like a business person.

8:27 – 15:39 | What a practice is actually worth. Why cash flow defines value, how the 30% "scrape" works, and why the math changes with the years a physician has left in practice.

15:39 – 16:30 | P2 Management Minute. Keith Reynolds shares practice management tips and invites listeners to submit their own workflow ideas.

16:30 – 20:47 | Hospital alignment vs. a private investor. The day-one reimbursement bump, added referrals and volume, the defensive play, and the difference between a platform and a tuck-in.

20:47 – 24:56 | The private equity debate. Colbert makes the case for private equity as a third option between hospital employment and the health plans.

24:56 – 28:54 | The AI question. Where artificial intelligence helps practice economics, and why it raises the bar for solo groups.

28:54 – 31:48 | Staff and overhead in a deal. Why mergers rarely cut headcount, and how to communicate change without spooking staff.

31:48 – 34:55 | The MSO strategy. How a management services organization lets a practice think and act like a real business.

34:55 – 37:56 | A message to primary care physicians. Build scale and write the three-to-five-year strategic plan before someone knocks.

37:56 – 39:05 | Closing thoughts and outro. Payerchin thanks Colbert and wraps the episode.