While the number of physicians in private practice has dropped to 26 percent as more physicians are employed by the corporate sector, there are still physicians who enjoy the autonomy of private practice, according to a report from the American College of Surgeons.
For first-time buyers, there are several factors that go into buying a new practice. Here are six things to consider:
1. What type of practice: Physicians have to consider if they want a single or multispecialty practice. They also must determine location, size, hospital affiliation, price range and several other factors.
2. How to find a practice to buy: Physicians should search for a practice six to 12 months before aiming to begin work. Most leads on for-sale practices come from networking. Sometimes, recruiters are useful.
3. What to evaluate within the practice: When looking to buy a practice, consider factors like the practice's culture, work-life balance, strength of the staff, practice leadership, financial incentives, reputation and strength of online medical tools and records. Look at its noncompete clauses, tax issues, and assets and liabilities as well.
4. Exercise due diligence: Make sure that the practice is what it appears to be. Review liabilities, past acquisitions and any hidden costs. Do due diligence in key areas including corporate, compliance, tax, financial, information technology and human resources.
5. Determine valuation: Use an appraiser to collect data points for a report that includes the practice's cash flow, income and investment value.
6. Regulatory considerations: Be aware of state and local guidance like anti-assignment laws, kickback statutes and more. See if there is a management services organization involved.