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Older Doctors Sell Out to Private Equity
Private Equity Firms Are Making Partial Purchases of Physician Practices
BY ERIC BRICKER MD
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The Deals Are Frequently Structured as Follows:
–The Private Equity Firm Offers an Up Front Lump Sum of Money and Administrative Services Such as Billing and Collections for the Practice.
–In Return, the Doctors in the Practice Agree to Have 30-40% of All Future Revenue Go to the Private Equity Firm.
The Up Front Lump Sum Can Be Equal to as Much as 10 – 20 Years of Income for a Physician.
The Older Doctors in the Practice Who Are Usually the Partners Frequently Take This Deal, Resulting in the Younger Partners Making Less Take-Home Pay.
Implication for Employers:
Private Equity Firms Create Larger Group Practices to Have Better Negotiating Leverage with Commercial Insurance Carriers and Obtain Higher Fee-for-Service Reimbursement.
Overall Healthcare Costs for Physician Services Go Up, While the Take-Home Pay for Doctors Goes Down… and the Private Equity Firm Keeps the Difference.
NOTE: The Older Doctors Who Are Paid the Lump Sum Are Still Required to Stay at the Practice for a Certain Number of Years After the Transaction.
YOUR THOUGHTS AND COMMENTS ARE APPRECIATED
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DIY Textbooks: https://medicalexecutivepost.com/2021/04/29/why-are-certified-medical-planner-textbooks-so-darn-popular/
THANK YOU
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Filed under: "Doctors Only", Alternative Investments, Career Development, Experts Invited, Interviews, Investing, Research & Development, Videos | Tagged: Eric Bricker MD, FASB #95, Physician Private Equity, PPMC, Private Equity, Private Medical Equity, VCs |
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https://www.fa-mag.com/news/private-equity-powerhouse-books–1-6-billion-profit-selling-hospital-chain-to-itself-63382.html?section=75&utm_source=PW+Subscribers&utm_campaign=89ee1735bd-PW+News_073021&utm_medium=email&utm_term=0_1899ce8517-89ee1735bd-234419085
Dr. David E. Marcinko MBA
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