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Insights for Physician-Focused Financial Advisors
By Dr. Charles F. Fenton III, FACFAS, JD
www.BusinessofMedicalPractice.com
In most cases, healthcare knowledgeable financial advisors [FAs] recommend that the physician buyer of a medical practice solely purchase the assets of the practice and not the stock of the practice itself http://www.CertifiedMedicalPlanner.org
A Risk Reduction Strategy
Why? By purchasing selected assets, the buyer is ensured that he will not become responsible for the known or unknown liabilities of the corporation; thus a risk reduction strategy. In prior days, avoiding purchasing the stock of the corporation was a wise recommendation www.MedicalBusinessAdvisors.com
Enter the Managed Care Era
However, with the advent of managed care, the purchase of the stock of the corporation can provide the new practitioner with certain competitive advantages.
For example, it may take a new practitioner three to nine months to get onto enough managed care panels to make the practice profitable. Purchase of the stock of the corporation ensures the new practitioner of acquiring the Federal tax identification number of the corporate entity.
Assessment
Since most managed care corporations identify providers by the Federal tax identification number, purchase of the stock of the corporation should allow the new practitioner to be enrolled on managed care panels in a shorter period of time. Instead of applying anew to the managed care entity, the new practitioner merely needs to be listed as a new member of a provider already on the managed care panel.
Conclusion
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- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
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Filed under: CMP Program, Practice Management, Practice Worth, Professional Liability, Risk Management | Tagged: certified financial planner, Charles Fenton, medical practice sale, Stock Sale vs. Assets Sale, www.BusinessofMedicalPractice.com, www.certifiedmedicalplanner.com |
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