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How a Physician Practice Can Negotiate an M&A Project with a Health System

In this video series, EisnerAmper Partner Michael McLafferty explains the process EisnerAmper uses to assist a physician practice to negotiate an M&A project with a health system.  Mr. McLafferty has over 20 years of experience in the health care field providing business services to multi-hospital systems, pharmaceutical firms, surgery centers and physician practices.

In this video, Mr. McLafferty provides an overview of all the steps in negotiating an M&A with a Health System — starting with the strategic value, through compensation and the actual employment agreement.  He explains that when his team first meets with a physician group, they often discover that the practice has already been talking to the health system for anywhere from 2 to 3 years. The physician practice is very frustrated — they can't seem to work out a deal and they don't trust the hospital. 

The EisnerAmper team often represents the physician group as an independent business advisor.  When they are retained by the physician organization, EisnerAmper has experienced that the health system's reaction is very positive. They see it as a sign that the physicians are serious about making a deal. After meeting with the health system, EisnerAmper can then help the physician understand how they might have more leverage than they realize in a negotiation. 


Transcript

0:00   We've been doing this particular service now for number of years and what we normally do when we first come in and meet with the physician group is we find out that they probably have been talking to their health system for anywhere from 2 to 3 years before we get involved. 


Michael J. McLafferty is an Advisor in the Health Care Services Group (HCSG) with years of experience in the health care field, providing business services to multihospital systems, pharmaceutical firms, surgery centers and physician practices.

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More Videos in This Series
How a Physician Practice Can Negotiate an M&A Project with a Health System - Option 1

Physician practices negotiating an acquisition by a Health System. Mr. McLafferty discusses why the pure acquisition option is the favorite for most health systems. Physicians and their staff become employees of the health system and the physician practice will be liquidated.


How a Physician Practice Can Negotiate an M&A Project with a Health System - Option 2

In the video series, Physician Practices Negotiating an M&A with a Health System, Mr. McLafferty explains the difference between acquisition and leasing options. In the physician practice lease model, the physicians and their staff remain employees of the physician practice.


How a Physician Practice Can Negotiate an M&A Project with a Health System - Option 3

In the video series, Physician Practices Negotiating an M&A with a Health System, Mr. McLafferty discusses the benefits of a hybrid option where the physician practice is owned by the health system, but the practice remains so physicians can keep putting money into their pensions.