What are the key points of due diligence in a surgical centre

June 28, 2021

by a searcher from Dartmouth College - Tuck School of Business at Dartmouth in Africa

Taking risks and aiming beyond the present have always excited me. But it takes much more than faith in an idea to crystallise monumental goals. It takes a group of incredible people who not only believe in the idea but also have the talent to execute it. For this reason, I am currently assembling a world-class board of directors comprised of individuals who are clear industry leaders. Leaders who possess extensive industry experience/knowledge and who are highly proficient in M&A and the operation of surgery centres and other sector-specific businesses.

Reply by a searcher
from IE Business School in Cambridge, UK

In addition to the above, I'd say (in the US context) HIPAA compliant systems (whether outsourced or managed in-house), correct waste management protocol for sharps/bio-waste (everything from having contracts with disposal companies to practices at the surgery), strict due diligence on qualifications of the surgeons, making sure structures are in place so that the surgeons won't just leave and start their own clinic, etc.

Really important and reiterating what people said above though is making sure the surgery and payors have a good relationship. See how well managed working capital and revenue recognition are at the company.

Reply by a professional
from Harvard University in Atlanta, GA, USA

Here are a few items that come to mind: payor mix, referral source mix, revenue by surgery, matching operating systems to financials and bank statements (critical!), and making sure the management of the centers can continue if the seller is less involved/motivated. I am more than willing to discuss more offline if it helps.

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