Medical Practice Merger Advice

Medical Practice Merger Advice for Physicians

Somewhere in a physician’s professional career in private medical practice, there will likely be the opportunity to merge, acquire and/or sell his/her medical practice with another entity.  In fact, most physicians in private medical practice will encounter numerous opportunities for some type of medical practice merger or acquisition in the course of their careers. The unstable and rapidly changing environment of health care has intensified the interest of physicians to merge with other physicians who might share a common vision.  This is leading to a tremendous amount of consolidation activity.

When groups attempt merging medical practices, they face several key obstacles:

• They may not be sure how to work their way through the myriad of merger issues and processes;
• There may be sensitive issues that are difficult for the merging groups to address;
• The groups may have no one to coordinate the merger negotiations;
• and other professionals (such as attorneys and accountants) are so busy representing the interests of the existing practices that they are not able to help the merging groups reach the compromises necessary to form a combined group.

To assist in overcoming these obstacles, many groups use a Merger Facilitator/Advisor to serve in the following role:

1. As an objective and impartial outsider who can “represent” the interests of the combined group and help the merging groups reach reasonable compromises on issues.
2. As a guide through the various merger issues and processes.
3. As an advisor who can offer insight into how other groups have solved merger problems or optimized their position through mergers.
4. As an organizer and facilitator to help keep the merger effort on track and moving forward.

As an experienced Facilitator/Advisor, I help guide merging physicians through these three steps of the merger process:

• Due Diligence/Feasibility
• Contract Development
• Merger Implementation

The due diligence process is extremely important to a successful merger.  It is due diligence that removes the blinders and requires the parties to take the necessary time to review all aspects of the merger before ever signing the legal documents and completing the merger.