Member Forum

1.  Resources for buying/selling practice

Posted 08-02-2017 08:28
Hello
I am wondering if anyone has any good resources regarding buying/selling a practice. My clinic partner is selling his practice and I am thinking about what needs to happen with an exit--specifically how one allocates liability (insurance over payment/insurance audits/fees/fines etc.) after one partner leaves.
Thank you!

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Jessica Rongitsch, MD, FACP
Capitol Hill Medical
Seattle, WA
98104
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2.  RE: Resources for buying/selling practice

Posted 08-03-2017 05:41
Your state medical society and past issues medical economics

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3.  RE: Resources for buying/selling practice

Posted 08-03-2017 10:01
3 years ago I sold a practice without partners involved, so not your exact situation, but I can tell you that generally, there was very little publicly available DETAILED info (such as for an issue like this).

There are a myriad of issues that arise with a practice sale, and bottom line, my experience was it was search/read everything you can get your hands on, do your own thinking about every possible scenario as carefully as you can (and for multiple rounds until you quit coming up with issues), then hire experienced legal help to develop contract(s) that protect you and your unique issues, or wing it.

If you want, post more details of your situation here and we can try to at least help you with the thinking part.

Jeff Huotari, M.D.
BlueSky Health
138 W. Highland Rd., Suite 950
Howell, MI 48843
517-545-2400
blueskyhealth.org

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4.  RE: Resources for buying/selling practice

Posted 08-06-2017 13:27
Rule of thumb for primary care practices- for big systems that are buying patients to feed their proceduralists, the practice/patient list has value.
For private docs, the only value is stuff. And used medical equipment isn't worth much. Check buying used furniture/med equipment.  $50 for a GOOD chair, exam table, etc, is about par.

(I hope this is the case--)  If you were an employee, or "sharing space" with separate financing/tax ID:
In general I'd recommend you NOT "buy the practice" because then you also buy all the liability from past acts.  You're providing a service to the departing doctor, by managing the patient charts, which otherwise have to be maintained for years at considerable expense.  That's worth any value of the identity, patient list, etc.  Ditto employees.
How were you getting paid while you were there?

The phone # and location, great employees, if any, have some value, but no more than a few thousand $.  I'd guess $2000.
If there was a huge thriving DPC, or mostly cash paying patients, maybe more.

Consider the costs to him of maintaining the old charts, providing records, safeguarding, etc.
Re "value" of practice, in a primary care poor area, what would happen if he closed and you opened up next door or across town?
Right. Bing!  You'd be busy.

He should own his AR- which generally isn't worth much.
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Good luck.
Consider your BATNA (Best Alternative To No Agreement,)  if the departing doctor is asking a lot.  If he's leasing, he has to empty the space; often used office furniture buyers do so for no net payment- they haul away, but pay nothing for the stuff.

If you were in a partnership, you can't avoid the risk/hassle, but payments on the AR should be a percentage, to allow for the usual overhead expenses.  Generally in a PC practice, overhead runs 65-70%  (others can tell me if that's wrong?)  AND, if you're in a partnership, there should be a buy sell agreement...and your BATNA may still be to walk away.

There's a joke about the retiring doctor who has no retirement savings, but has $3 million of Accounts Receivable (unpaid charges going back 30 years......)
There are probably articles in Medical Economics or FPM about this.

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Peter Liepmann MD FAAFP MBA
My mission is to fix US health care www.PCMHpcc.com
Bakersfield CA
5183026006
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