Selling to a Hospital

March 1, 2008

Do you have any information about what to consider when a hospital is interested in buying your practice?

Question: Do you have any information about what to consider when a hospital is interested in buying your practice?

Answer: As you can imagine, the possible issues are numerous.

Briefly, though, pay attention to the details of the proposal offered by the hospital. Are the terms fair? Is it an outright purchase, or are there terms for what happens if the alliance dissolves? What does the hospital propose in terms of getting patients to you? Will it do your billing? How will that affect collections? Do your staffing decisions have to go through hospital bureaucrats? How are physicians compensated? If you run the numbers for the proposed compensation model based on production from last year, what would each physician make? What are the hospital’s expectations for productivity in the next few years? Has this hospital acquired other practices? Are the physicians at those practices happy?