Practice Management Firms Buying More Hospital-Based Physician Groups

There has been a recent increase in the trend of hospitals purchasing existing private practices. However practice management firms are also buying practices. This is beneficial to practices interested in being purchased because they can have competitive offers and additional options than just being bought out by a hospital.

Inpatient Specialists are the most likely types of private or hospital based practices to be purchased by practice management firms. There are also practices being purchased by private firms although these deals are not made public.

The practice management firms are focusing on hospital-based practices and are buying within certain specialties. Typically the purchased practices are already financially healthy and have long-term relationships with hospitals, but need a larger entity to grow, acquire technology or negotiate with third-party payers.

Unlike with a sale to a hospital, practice management companies don't always employ the physicians after buying the practice. Practice management companies handle administration, own the practice's contracts and take in the payments, a portion of which is then distributed to the practice. Physicians can be employees or independent contractors of the management company directly, or of the practice. How this is handled is usually dictated by local laws and styles of practice.

Before selling, physicians should assess a company's viability as well as determine if the company is one they want to work with over the long term.

Read the full article in American Medical News, or click here:
http://www.ama-assn.org/amednews/2010/06/21/bisb0621.htm