How a Physician Practice Can Negotiate an M&A Project with a Health System - Option 1
What are the Business Model Options that physician organizations have?
Option 1: The Physician Practice Acquisition Model
In this segment 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 as an entity will be liquidated.
0:00 The first option, which is more of a pure acquisition, is the favorite for most health systems. It's the easiest and the cleanest way for them to bring a practice into a system and basically what happens there, is that physicians and their staff become employees of the health system.
0:25 The physician practice itself as an entity will at some point — usually about a year after the deal is finalized — get liquidated; no longer be in existence at that point.
EisnerAmper Partner Michael McLafferty provides an overview of all the steps in negotiating an M&A 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 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.
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.