Buy Sell Medical Practice in Chicago Suburbs, Resources and Information

First, a message and an offer.  Then, if you are looking for some of the best resources to buy and sell medical practice, specifically the valuation and sale of medical practices and determining fair market value, please refer to the sections below.

Dear Doctor -

·     Are you retiring or moving?

·     Are you planning to divest ownership of your practice?

·     Would you like to focus solely on clinical work?

·     Would you like to avoid wrestling with administrative issues and overheads?

·     Are you considering phased retirement or divestiture?

If yes, please contact us. We are interested in acquiring a primary care medical practice.   We are currently managing a primary care practice in Chicago’s Northern Suburbs and enjoy an excellent reputation among our patients.  We promise fair valuation and terms, strict confidentiality and more importantly, continued quality care your patients expect.  Do the right thing for yourself, your patients and your employees, call us for a win-win proposition.

For further information, please contact:

Sudhir Malhotra – MBA

Practice Director, Heal n Cure S.C.

Ph    :  312 543 3185

Fax  :  847 897 2099

Email: sudhir@healncure.com

An alumnus of, Kellogg School of Management, Northwestern University

All correspondence will be kept strictly confidential.

Some considerations:

Should I sell to another Physician or to a Hospital?

A physician buyer will place a higher value on existing staff and procedures while a hospital may focus more on the patient base and hard assets.  A reputed physician buyer, with the knowledge of professional practice and protection of your confidentiality will be able to offer a superior approach tailored to meet your needs.  You want to make sure that the new physician’s credentials are excellent and that his or her style is compatible with yours, especially if there will be a transition period during which you practice together before you completely withdraw.  You can then look forward to a satisfactory transition to retirement.

What is the ideal time frame?

It takes time.  You should plan on the entire process taking as long as 18 months. You want to make sure that your patients will have continuity of care with someone that you trust and have “vetted” properly, and have made smooth transition arrangement.  Do it while you have the luxury of time.

What about patient Records?

Physicians, their estates, or a physician-custodian should retain medical records ( or digital copies) in perpetuity as a safeguard against malpractice liability problems. Ask your malpractice carrier about their requirements.

What factors influence the valuation?

• Type of practice. Do you have primarily outpatient visits or include nursing homes and hospital visits.
• Payor mix. Whether BCBS, Private insurance, Medicare, PPO or HMO.
• Facility. Practices located in upscale facilities sell for more
• Equipment.  Practices with modern equipment tend to sell for more
• Reimbursement Trends.  What is the fee reimbursement trend for your practice?
• Top procedures. What are the common procedures performed?
• Technology Advances.  Have recent technological advances made your equipment/procedures obsolete?
• Staff.  Is your staff well trained and highly motivated?
• Financial.  Get your financial statements and tax returns in order. Note the trend in your income, is it growing at a satisfactory rate?
• Referral Base.  Where do your referrals come from – existing patients, hospital calls, other physicians?

Following content has been excerpted from American College of Physician’s resources:

Preparing for divestiture - List of Documents and Information

 1.       Detailed list of fixed assets (building, equipment, etc.)

          a.    Acquisition cost and date

          b.    Accumulated depreciation

          c.    Useful life

          d.    Replacement value, if applicable

2.       Income statements for the last 3 years

3.       Balance sheet

4.       Tax returns for the last 3 years

5.                 Lease agreement or deed of trust

6.                 Equipment rental, lease, and maintenance agreements

7.       Notes payable (outstanding principle, interest rate, term)

8.       Aged accounts receivable by payer

9.       List of employees (hire date, current salary, contract if applicable, and benefits)

10.     Practice statistics

          a.    Average number of patient visits per week or year by physician/provider

          b.    Revenue from procedures and in-house ancillaries

          c.    Number of new patients in most recent year

          d.    Number of active patients by payer (seen within last 3 yrs)

          e.    List of procedures and services performed in practice

          f.     List of insurance plan contracts

          g.    Patient visit capacity

          h.    Capitation contract information (including number on panel, revenue, etc.)

11.     Patient or employee satisfaction surveys, if available

12.     Marketing materials (brochure, business cards, new patient packet, information      sheets, phone book advertisements, etc.)

13.     Demographic analysis of patients (age, zip code, payer mix, etc.)

14.     Insurance contracts (highlighting assignability clauses), including fee schedules

15.     Practice fee schedule

16.     Other relevant documents, such as consultant reports, planning documents,   contracts, etc.

Practice Transaction Check List 

____   List of definitions

____   Assets to be included and excluded

____   General purchase and sale language

____   Current liabilities to be assumed by the buyer

____   Purchase price

§      Valuation methodology

§      Price adjustments (e.g., liabilities, collection fees, etc.)

§      Timing and manner of payment

____   Seller representations and warranties

§      Financial statements

§      Corporate papers

§      Status of existing contracts, liens, leases, etc.

____   Buyer representations and warranties

§      Authority to enter agreement

§      Assignability of sale

§      Obligations to staff (if appropriate)

____   Obligations and agreements of both parties before closing

§      Terms of conduct of business until closing

§      Access to information and records

§      Public announcements

§      Confidentiality

____   Other clauses

§      Restrictive covenants (if appropriate)

§      Buy back provision

§      Leased equipment

§      Insurance prepayments

Other important resources

Available from the American Medical Association (https://catalog.ama-assn.org/Catalog/home.jsp):

Buying, Selling, and Owning a Practice – A more detailed handbook to ownership options.  ($55 non-AMA members, $45 AMA members)

Closing Your Practice – Whether you're relocating, retiring, going into teaching or joining a group practice, this practical book has practical advice. 

($35 non-AMA members, $20 AMA members)

Medical Practice Divorce – The reasons why physicians choose to leave a practice, how to leave a practice gracefully, how to set up a practice the correct way to avoid later conflicts and problems, and advice for handling the business, legal and emotional aspects of leaving a medical practice.

          ($45 non-AMA members, $35 AMA members)

Assessing the Value of the Medical Practice, 2nd edition - This resource offers the physician essential information for understanding the process of practice valuation to help engage a qualified practice appraiser and participate with confidence.  ($55 non-AMA members, $45 AMA members)

Beyond Disengagement – Unraveling mergers, sales, and management arrangements that appeared to be favorable on the front end but are forcing  new decisions and practice retooling. ($74.95 non-AMA members, $66.95 AMA members)

Available from the Medical Group Management Association (MGMA) (http://www3.mgma.com/ecom/store/index.cfm): 

Buying, Selling, and Merging a Practice - Includes practical, straightforward text covering topics from valuation concepts to legal land mines, deal negotiation and tax implications, and it prepares you for life after the deal. ($50 non-MGMA members, $45 MGMA members)

From the HealthCare Group (http://www.healthcaregroup.com/):

Selling Your Practice  - Covers all of the critical legal and business issues in depth, as well as the initial question of whether you should sell the practice at all.  If you have already made the decision to put your practice on the market, learn all of the factors involved, from finding potential buyers and determining basic sale terms to securing the right professional assistance.  ($115)

Goodwill Registry – Listing of sales with goodwill by valuation method and geography.  Now only available online by specialty.  (Internal Medicine $117, all specialties $395)

Available from HCMarketplace/HCPro/Advisory Publications (http://www.hcmarketplace.com/):

Protecting the Ongoing Practice When a Partner Retires - Planning strategies to transition your practice for future partner retirements, early departures and the unexpected, and ways to harness the value of older physicians—even after their retirement. Covers sensitive issues including goodwill values, payout issues, reducing or eliminating call duties and addressing post-departure liabilities, this report includes sample contract provisions to protect financial viability, provide a fair buy-out and move forward after severing ties.  ($25)