Any structuring advice for acquiring a physician-owned healthcare practice?

by a searcher from Harvard University - Harvard Business School

3 years ago

I'm most curious about best practices to keep the selling physician motivated post-close after they sold a majority of the practice as they are typically critical to the go-forward business. I've heard buyers may look for the physician to roll-over 15-40%. Then perhaps institute a mechanism to reduce that over time. Any thoughts?

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professional from University of Scranton

We would often acquire practices (technically an asset purchase) where the physician(s) would be getting ready to retire - their main motivation for the buyout. But we'd always have a succession plan in place - get a new grad in there that is hungry for business that can slowly take on the retiring MDs patient panel. I don't know much about physician's retaining equity, because I was on the hospital side of med group acquisitions, but as far as keeping the MDs motivated, structuring pay as base + incentive seemed to work well and keep them practicing and productive for some time. In my experience, non-compete's are somewhat of a challenge and it is highly unlikely they will be enforced. Can always add a non-compete buy out clause.

3 years ago | like reply | 0 likes

searcher from Duke University

James taught me everything I know about this topic.

3 years ago | like reply | 0 likes

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