Are you on the market?
Doctors in every specialty today are wrestling with a key question: What is the price of independent practice, and is the price worth it? Increasingly, their answer is “The price is too high; I’m ready to sell.”
A recent article in Medical Economics (free registration required) highlighted the issue: Independent Physician: 6 steps you can take to remain independent – for now (April 25, 2013). The article recapped the results of a study by Jackson Healthcare, a staffing firm, which found that 70% of the practice acquisitions consummated in 2012 by hospitals were initiated by the doctors themselves.
The motivators for physicians to consider selling their lovingly built private practices are no mystery: reduced compensation by third-party payers, uncertainties about coming changes in the national healthcare system, the costs of acquiring and maintaining medical equipment, the expense and complexities of hiring and keeping good staff people, etc., etc., etc. I don’t have to tell you – you live this reality every day.
Of particular interest to us at PRMS is how psychiatry is faring in the acquisition market. We were not surprised to see that psychiatric practices were barely a blip on the acquisition radar screen, both in terms of deals consummated in 2012 and those planned for 2013. While the pressures of declining insurance compensation and uncertainties about the future surely weigh on psychiatry, the cost of medical equipment and the human resources burdens are not major concerns for most small psychiatric practices. It seems that for now, psychiatrists are choosing independence and keeping their fingers crossed.