Three Practices in Multiple States
We completed the sale of several medical and healthcare practices this week: One was a pediatric practice in Louisiana collecting $830,000 annually with a high net income of $460,000. This practice emphasized a persnal, patient-
Baby boomer physicians are continuing to age in great number, necessitating the sale of their practices. The Great Economic Crisis negatively impacted a large segment of selling physicians who were counting on maximizing the value of their practices for retirement purposes. The Crisis drove many of these doctors to hold-off on selling their clinics out of fear, or out of necessity to re-build battered retirement reserves. The financial and consumers markets, while not fully healthy, have recovered to a sufficient level to drive sellers back into the market to divest their clinics. Factors related to dermatology reimbursements also have a bearing on the decision for many buyers and sellers.
The Office of Inspector General (OIG) posted an advisory opinion regarding an online coordination service for health care professionals. The Requestor, a company which provides web-based services to physicians, designed this service to facilitate the exchange of information between health care professionals. The Requestor informed that this coordination service is only available to its clients (e.g. physicians) who purchase the EHR service as well. However, any health care professional (providers, suppliers, etc.) may be included in the network free of charge. Clients who utilize both the coordination and EHR services would receive a small monthly discount.
The Office of the Inspector General (OIG) recently released an advisory opinion (No. 11-17) regarding a laboratory services management company (the "Requestor") proposing to contract with physicians. Under the Proposed Arrangement, the Requestor would provide allergy testing and immunotherapy lab services to primary care physicians on an as-needed basis. The Requestor would be responsible for personnel, equipment, marketing and other factors pertaining to these services. Furthermore, the Requestor would review the physicians' patient files to identify those suitable for its services.
Many buyers are concerned about over-paying for "goodwill". Much of this stems from the fact that they are not always confident in their ability, whether clinical or business management skills, to produce the same results as the Seller.
One of the great myths surrounding a practice transition is that up to half of the patients will leave the practice after the transition. However, a thoroughly planned transition can provide much better results. Keep in mind that an average dental practice loses about 10-12% of its patients each year through normal attrition. Jobs and insurance providers can change, or the patients may simply relocate. Therefore, it is recommended that ANY dental practice counteract this attrition by maintaining an effective marketing and recall program throughout the course of the year. This should be a TOP priority during the critical first year after a purchase.