Seller/Physician staying on post acquisition

by a searcher from Emory University

2 months ago

I am seeing a lot of medical practices for sale in which the physician is wanting to stay on as an employee post acquisition. Can anyone shed light on whether or not this is allowed if using SBA financing? Also, is there a way to partner with a physician in the practice their selling if the buyer is not a licensed physician but has experience in healthcare operations?

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4 comments

searcher from University of Wisconsin-Madison - Wisconsin School of Business

There is a lot of growth opportunity in phyisician providers but need to be aware of and address significant risk and complexities. In addition to the state licensing and compliance rules mentioned by Brad, you need to understand their billing practices to ensure no fraud, and the key man risk. At physician practices, most patients are tied to their practitioner so the physicians are very important. I have seen practices lose one practitioner and with them hundreds of patients (ouch). Some physicians can also be hard to work because they think they are right and are demanding on pay. This is a space where financial sponsors have both done very well and gotten burned.

2 months ago | like reply | 0 likes

lender from University of Georgia

The SBA now allows for partial buy outs, The seller does not have to sell the whole practice. If the buyer does not have medical experience this will give the bank the best feeling and plan for success. We are seeing a lot where the seller (doctor) stays on contract for up to 12 months.

2 months ago | like reply | 0 likes

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