Older Doctors Selling Out to Private Equity

Private Equity Firms Are Making Partial Purchases of Physician Practices. The Deals Are Frequently Structured as Follows: --The Private Equity Firm Offers an Up Front Lump Sum of Money and Administrative Services Such as Billing and Collections for the Practice. --In Return, the Doctors in the Practice Agree to Have 30-40% of All Future Revenue Go to the Private Equity Firm. The Up Front Lump Sum Can Be Equal to as Much as 10 - 20 Years of Income for a Physician. The Older Doctors in the Practice Who Are Usually the Partners Frequently Take This Deal, Resulting in the Younger Partners Making Less Take-Home Pay. Implication for Employers: Private Equity Firms Create Larger Group Practices to Have Better Negotiating Leverage with Commercial Insurance Carriers and Obtain Higher Fee-for-Service Reimbursement. Overall Healthcare Costs for Physician Services Go Up, While the Take-Home Pay for Doctors Goes Down... and the Private Equity Firm Keeps the Difference. **Correction: The Older Doctors Who Are Paid the Lump Sum Are Still Required to Stay at the Practice for a Certain Number of Years After the Transaction. Sources: Personal Correspondence with Physicians AHealthcareZ is 200+ Healthcare Finance Educational Videos. 💥 BOOK: Check out Dr. Bricker’s Book 16 Lessons in the Business of Healing here: https://www.ahealthcarez.com/healthca... AHealthcareZ Viewers Include: Employee Benefits Professionals, HR, CFOs, Insurance Brokers, Benefits Consultants, Doctors and Nurses in Leadership Roles, Hospital and Health System Administrators, Health Insurance Carrier and PBM Professionals, Pharma and Med Device Professionals, Academic Professors and Students in Healthcare Administration and Public Health. 90,000+ Views Per Month Across All Platforms. Visit AHealthcareZ.com to Subscribe to the Healthcare Finance Video Newsletter.