Mergers and Acquisitions

While the merger of two medical practices or the acquisition of one practice by another might appear logical and straightforward, there are a number of hidden “gotchas” to be considered.

The blending of new personalities and management styles is always more significant than you thought it would be. The process of medical practice merger “decision making” is altered and can become a potential source of contention and unrest.

Obviously, there is a great deal of preparation and evaluation that must take place before an actual medical practice merger or acquisition. There must be an objective and consistent valuation of the entities, particularly if there is to be a medical practice merger. Having the same entity perform the valuations insures that you should now be comparing apples to apples.

There is a long checklist of items that must be reviewed and resolved prior to the medical practice merger. Long-standing relationships can be placed in jeopardy. Whose attorney will the new entity use? Whose accountant? Whose insurance broker? Whose pension administrator? The list goes on and on.

There will be probable overlaps in staffing positions such as the practice administrator, bookkeeper, and others within the insurance and billing departments. Someone must help determine who to keep and who to terminate, assuming that one of the reasons for the medical practice merger was to realize some economies of scale in staffing and personnel.

There are also legal and tax consequences that must be considered. Often, the medical practice merging parties will go to their accountants and attorneys who certainly have expertise in the legal, financial and tax implications but have no real clue as to the large number of operational issues involved. In our opinion, DoctorsManagement can bring the full scope of medical practice merger knowledge to what needs to be done and can coordinate with the attorneys, accountants, etc., to do their part.

DoctorsManagement stands ready to help you keep from heading down the slippery medical practice merger slope that can lead to a disastrous conclusion or an expensive courtship with no marriage.