ROCKVILLE CENTRE, N.Y. — Industry experts predict that 2014 will be a record-breaker in terms of physicians retiring, merging or selling their practices. According to Deloitte’s 2013 Survey of U.S. Physicians, six in 10 report, “it’s likely that many will retire earlier than planned in the next two to three years.” In addition, by the end of 2014, an estimated 50 percent of physicians will work for a hospital-owned or affiliated medical group or health system.
That means thousands of physicians face important personal, professional and financial decisions in 2014. With close to a decade of experience helping physicians transition to Concierge, Hybrid Concierge or retirement, industry leader Concierge Choice Physicians (CCP) has compiled a list of top questions and issues physicians should consider before retiring, selling or merging with another practice.
Why are even successful physician practices (e.g., established with a strong patient base) being valued at such a low price?
After a buying spree over the past few years, hospital systems purchasing practices are looking at the bottom line and see increasing overhead and decreasing reimbursement. Unless they have a specific need for a practice to fill a gap in the market, many purchasers are now targeting physicians desperate to get out from under struggling practices with low-ball offers. “The current marketplace makes it more important than ever for physicians to look for ways to add value to their practices in a quantifiable way,” notes Wayne Lipton, founder and managing partner of Concierge Choice Physicians.
Is there anything a practice can do to avoid selling and perhaps even bring a financial benefit to the practice in the short term?
For practices who wish to remain independent, Hybrid Concierge models can provide a solution by allowing physicians to continue to accept insurance and maintain their patient base, while opening up a new revenue stream through an optional membership-based program. Some Hybrid programs can increase revenue by up to 35 percent. That additional revenue is often enough to enable physicians who want to remain independent to do so, or to prolong retirement by an additional few years.
Will a concierge program help if/when the practice does decide to sell or merge?
Since full and Hybrid Concierge programs are generally more profitable than traditional practices, they bring value to both the seller and buyer. Moreover, because practices with concierge programs in place are considered more stable, the acquiring practice has assurances that their investment is secure, particularly when a third party is managing the membership program and has a stake in its successful transition.
Can the acquiring organization continue with the concierge program?
As concierge medicine grows in popularity, more large organizations are recognizing the value in the model. Many organizations purchasing practices that offer concierge not only continue the programs, they also use the additional revenue to offset the cost of acquisition and transition. In addition, while there remains a reimbursement advantage to larger entities in the commercial insurance world, that advantage will soon be fading. As it does, the need to tap into private revenue will continue to grow and doctors with concierge programs will become even more attractive to purchasers.
How can concierge programs help with retirement strategies?
Whether one is looking for a way to retire in a few years or build practice value for selling in the future, full and Hybrid Concierge Programs are strong assets. For physicians ready to retire, a move to a full-model Concierge Program could extend the life of a practice by a few years by providing a vehicle for a slower, yet still economically stable practice in the short-term. For physicians looking to retire in three to five years, a Hybrid program offers a way to transition the practice into a full Concierge Program or retirement over an extended period, giving physicians and patients the time to adjust.
For more information on strategies for selling, merging or retiring, join CCP’s Wayne Lipton for a free webinar Thursday, January 14 at 8:30PM EST/5:30PM PST. For more information or to register, visit https://attendee.gotowebinar.com/register/7831660051455671554. For news and industry updates, follow CCP on Twitter at @ccp_ny.
About Concierge Choice Physicians
Dedicated to providing real options for patients and physicians, Concierge Choice Physicians™ is the largest private provider of the full range of concierge programs available today – Hybrid, Transitional and Full-Model. CCP is also the industry’s second largest concierge medicine company overall. The company provides an innovative, flexible and affordable model proven to work in medical practices of any size – from solo physicians to large medical practice corporations – both independent and affiliated with hospitals or health systems. Headquartered in Rockville Centre, NY, the company works with medical practices in 23 states. For more information, visit www.choice.md or call 877-888-5590.
Follow CCP on LinkedIn: http://www.linkedin.com/company/concierge-choice-physicians
1. Deloitte 2013 Survey of US Physicians, http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_chs_2013SurveyofUSPhysicians_031813.pdf
2. Health Care Appraisers Incorporated 2013 Report, FM Vantage Point – A Review of Recent Trends and Transactions – http://www.healthcareappraisers.com/HTYIR_2013.pdf