3 ways healthcare providers should vet potential private equity partners

The pandemic caused many of them - including physician groups and health systems - to conclude that the status quo is unsustainable and that other options therefore must be considered The solution for many independent physician practices has been to pursue acquisition by a health system or large pra...

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Bibliographic Details
Published in:Healthcare Financial Management 2022-12, Vol.76 (9), p.34-37
Main Author: Bruce, Gary
Format: Article
Language:English
Subjects:
Company financing
Company investment
Coronaviruses
COVID-19
Employment
Equity
Fees & charges
Finance
Forecasts and trends
Health care industry
Investment companies
Investment management
Investments
Legal counsel
Management
Market trend/market analysis
Medical practices
Medicine
Noncompetition agreements
Partnership agreements
Patients
Physicians
Practice
Private equity
State laws
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Summary:The pandemic caused many of them - including physician groups and health systems - to conclude that the status quo is unsustainable and that other options therefore must be considered The solution for many independent physician practices has been to pursue acquisition by a health system or large practice. [...]a PE firm may have the financial wherewithal to equip a small medical practice with a state-of-the-art electronic medical record and billing system that improves revenue capture, speeds the delivery of test results to patients and reduces labor costs. [...]in the best-case scenario, a PE firm can take over managing the business, leaving the provider owners to do what they do best, which is to practice medicine. 2 HOW TO STRUCTURE THE DEAL Although many variations exist, most partnerships between PE investors and provider owners involve a bifurcation of the businesses' activities into management functions and clinical functions. [...]provider owners should familiarize themselves with applicable laws and regulations on corporate ownership and control, patient referral and fee splitting.
ISSN:0735-0732