Practice Strategies for 2018 and Beyond

Sale  •  Merger  • Expansion  • Acquire Competitors

The market for buying or selling vein and vascular practices is extremely active right now. But that doesn’t mean every deal is a good one, and formulas for successful sales or purchases are not “one size fits all.” It’s critical to avoid key mistakes when engaging in this process. If you are considering the sale of your practice, knowing what your options are for selling is essential to maximizing the value of your practice before your sell. Don’t wait until you have an offer on the table! The sooner you understand your practice’s worth, the sooner you can improve your value and maximize your sales price.

The belief of many physicians in solo practice is they need to be part of a larger group, especially if their practice is in a competitive environment with limited marketing resources available to attract new patients. With the cost associated with providing services today, you need to have a steady stream of patient consultations / procedures to absorb increasing expenses. But a sale of your practice is not the only path you can take – you have options …

Option #1. Evaluate the competitive climate within 50 to 75 miles of your office to identify opportunities to bring several practices together under a single management structure to share economies of scale. The combined entity, properly managed, would be very attractive to potential acquisition partners;

Option #2. Commit to growing your practice, expand by hiring additional providers (physician, NP, PA, RVT, Sclero RN) that allow you to perform more consultations and procedures;

Option #3. Consider an additional location to increase market share and physician referrals. A cost-effective option would be to look for a time-share arrangement where you schedule consultations / procedures 1-2 days per week in a new service area;

Option #4. Affiliate with one of the larger multi-specialty groups in your area;

Option #5. Affiliate with a hospital or health system in your service area that employs a large number of primary care physicians and does not currently provide treatment options for venous disease. Selling to a hospital can become problematic given the administrative turnover that occurs at the leadership level. The strategic plan of the people who brought you in may not be there two or three years from now. Hospital leadership may be good at running hospitals and outpatient centers, but they struggle when it comes to running a medical practice efficiently and effectively.

Preparation Is Key
Emotions are always in play when it comes to buying or selling a medical practice. It’s normal, understandable and appropriate. VSA’s role is to help set realistic expectations for our client’s so that emotions don’t take over the strategy that has been put in motion.

  • A hospital transaction is much different from the physician-to-physician selling environment. Hospitals are much more heavily regulated, and must acquire a fair-market assessment as to what the medical practice is worth.
  • In the physician-to-physician environment, however, there are fewer constraints. If you’re the seller, you want to sell your practice for the highest multiple you can get. If you’re the buyer, you want to convince the seller that they are joining a bigger group which will enable them to earn more money, have more job security, and have more job satisfaction by being part of the acquiring entity.

Client Representation

One of the most common ways to grow a medical practice is through the acquisition process. That’s because when one practice acquires another, both can reap the rewards offered by a larger patient base, increased revenues, greater access to resources, and reduced costs through economies of scale.

But mergers, buyouts, and similar physician practice acquisitions are very complex. Each one must be carefully planned, negotiated, and executed so that both parties benefit from the transaction. Otherwise, one or both practices could be saddled with exorbitant costs or other adverse effects – which could potentially destroy the newly merged entity.

VSA Provides Guidance

VSA provides practice assessment and valuation advisory services on behalf of vein and vascular practices that are thinking about buying a medical practice or being absorbed by another entity. Our staff is well-versed in all the components that make up a practice acquisition, and we can make sure that your transaction progresses smoothly and is structured so that your practice receives the maximum benefit.

VSA starts with a practice assessment to identify the strengths and weaknesses of your current practice. We work closely with you to examine your operations, analyze your historical financial data, discover your core competencies, and learn what makes your business tick. Then we see how your practice can be positioned in the marketplace in order to provide a viable opinion on the overall value of your business.

Next, VSA helps to identify other medical practices or health care entities that might be a suitable partner for your business. This may include acquiring a competitor, acquiring a practice in a new market, or selling your solo practice to third-party. If an acquisition appears to be feasible, VSA will advise you every step of the way to make sure you and your practice are compensated fairly.

To find out more on how Vein Specialists of America can help you CLICK HERE.

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