PODCAST: Private Equity Firms Are Making Partial Purchases of Physician Practices.

Older Doctors Sell Out to Private Equity

Private Equity Firms Are Making Partial Purchases of Physician Practices



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.



DIY Textbooks: https://medicalexecutivepost.com/2021/04/29/why-are-certified-medical-planner-textbooks-so-darn-popular/



One Response

  1. Private Equity Powerhouse Books $1.6 Billion Profit Selling Hospital Chain—To Itself

    Some critics contend that private equity’s involvement in healthcare puts profits above patient care.

    Dr. David E. Marcinko MBA


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: