Physicians and Private Equity-Owned Practices
By Debra Woods
Healthcare remains a dynamic and evolving field, with many physicians looking to the security of health system employment, while others are opting for private equity-owned practices.
“There are a lot of benefits to private equity, depending on the specialty,” said Ericka L. Adler, shareholder, practice group manager for health care at the law firm Roetzel & Andress in Chicago.
Adler also reported regional differences in private equity’s interest in practices. These companies often buy up physician practices in a certain geographic area. Then they enjoy economies of scale when purchasing supplies or malpractice coverage and possess greater power when negotiating with payors.
When private equity invests in physician practices, it can relieve the physicians of administrative responsibilities and streamline operations, handle human resources and compliance issues, negotiate payor contracting, bill insurers and let physicians practice medicine. Additionally, most deals offer profit sharing, creating long-term financial benefits as the practices grow or the private equity firm sells.
Document Actions