On the Flipside: When trimming overhead in a medical practice goes too far

I wrote an article about managing medical practice overhead expenses by looking for some creative ways to cut cost. Also found this blog entry on MGMA about being mindful about not going too far. When margins get leaner it can be tough to manage all of these aspects, but cash flow in the practice tantamount to operating a successful practice. The important thing is ascertain which expenses need to go and which cuts would cause strife within the practice. Running an efficient operation is also very important to the pre-sale planning process when a selling doctor is looking to transition out.

Suddenly Solo: Blog from Urologist on Starting a practice

Found an interesting blog called The Independent Urologist, and a posting regarding starting up a practice from scratch. He makes a good point about dealing with obstacles in a practice from the ground up:

"....My obstacles in February 2006 included lack of office space, little practice management knowledge, not enough money, no patients, no hospital staff privileges, no referring doctors, etc. Your obstacles may be similar to mine, but might be different, but you will have obstacles. Identifying them will help you to overcome them. It is essential that you list all--I mean all---of your obstacles. Slowly but surely, in a systematic fashion, you’ll overcome them."

Also makes a keen point about establishing concrete goals, not just grandiose ideas of the amount of income or level of success one would like to achieve by having their own practice:

"Finally, you must have goal. And not something like “to make a lot of money.” You’ll never have enough money. I mean to set a professional goal. What you want from your practice, profession, life, etc. My goal was my ideal practice—my dream practice. The practice I always wanted, but never thought I could have. If you don’t have a goal, get one. If your goal is nebulous, focus it, on paper."

Good blog. Looks like he's got a book too.

Cutting overhead in the Medical Practice

HEALTH PLAN ACQUISITIONS TARGET SMALL- TO MEDIUM-SIZED COMPANIES

HEALTH PLAN ACQUISITIONS TARGET SMALL- TO MEDIUM-SIZED COMPANIES
Analysts say Medicaid-heavy health plans also will be especially attractive to private equity firms and others.
By Emily Berry, amednews staff .

As a newly reformed health system takes shape, private equity firms are eyeing investments in health plans. "Private equity funds are out to make money, to invest money, and they've got money they want to put to work now," said Chip Clark, partner in the provider care sector in Ernst & Young's North America Transaction Advisory Services practice. The practice, among other services, advises corporate clients on merger and acquisition strategies. Investments are likely to target small- to medium-size plans that won't elicit intense regulatory scrutiny, as well as Medicaid contractors likely to continue making money from growing Medicaid rolls and cash-strapped states, observers said. Experts said investment groups now see the consequences of health system reform clearly enough to consider putting some money into health care ventures, even if major elements of the new health system have yet to take shape. [...]

Read the entire article in American Medical News:

www.amednews.com/2010/bisa0809

SENDER'S COMMENT: FYI...maybe we should try to get a piece of this pie!

Nationwide - Dermatology Jobs - Employment positions for Dermatologists

Nationwide - Dermatology Jobs - Employment positions for Dermatologists

Hospital for Sale

Recently saw an advertisement for a hospital for sale, selling the medical facility only. Looks like an interesting acquisition opportunity for the right medical group. Video here:

Selling Dermatology Practice - Medical/surgical Derm - Ohio

Ohio Northeast - Selling dermatology office, long established solo medical/surgical practice collecting $600,000 annually on part time hours. High net income of $400,000. Lots of growth potential by expanding scope of the practice and accepting more insurance. Well established and good reputation for providing high quality care. 96% Medical/surgical dermatology, 4% cosmetic. Excellent staff. Tremendous growth potential by expanding practice scope and provider coverage. Retiring seller will assist to facilitate a successful transition. 100% Dermatology Practice Purchase Financing Available.

SOLD: Optometric Office in Ventura County California

SOLD: South Ventura County Optometric practice for sale. Free Standing 2100-sq.ft office on major street. Over 6200 patient files. Two fully equipped exam rooms. Situated in a very desirable community, conveniently located off the Ventura Freeway. Ideal setting for an Optometrist or Ophthalmologist looking for a start-up practice alternative or expansion of an existing vision care practice. Gross revenue ~$400,000 in 2008. Retiring optometrist seller will assist with transition.

Otolaryngology ENT practice sale - Los Angeles CA

Video highlight - Selling Otolaryngology ENT clinic in Los Angeles California. Ideal for ENT physician buyer or other related specialty. View full listing

Timing the selling process can make (or break) the deal

Proper timing of the selling process is hardly a new topic of discussion but is an area which is extremely important in achieving the successful sale of a medical office. Unfortunately, timing is a factor which is often overlooked and can be extremely detrimental to marketability and practice value if executed improperly. Practice sale situations are commonly driven by other factors within a larger transition plan for the retiring doctor. It is imperative that the practice be brought to market early enough to achieve the objective. While timing to market may not guarantee that the clinic will sell, it can increase the probability that full value can be realized. Even small, marginally profitable practices can have inherent value which can may be capitalized upon if priced and marketed properly. The most unfortunate cases of ill timing occur when mature, premium practices lose tremendous value. This can occur when sellers hold out too long to bring the practice to market, wait for "perfect deal" to materialize (which may never occur), or simply get burned out and lose the desire to maintain the practice at full productivity. While a practice in decline may still attract a Buyer, the Seller will need to make an appropriate discount to asking price and recognize that obtaining financing for the acquisition will be much more challenging. Overall it is important for Sellers to 1) Prepare the practice for sale in advance 2) Bring the practice to market in a timely manner 3) Maintain the business at full capacity throughout the process 4) Be flexible in a buyer's market 5) Be willing to act when a good selling opportunity presents itself 6) Rely on a trustworthy sales adviser and be willing to take advice. The transaction process is not perfect, but a successful outcome is more likely when the a proper approach and mindset are brought into the selling process.

Preparing A Business Plan - Optometry Loan Startup & Refinance

Every start-up Optometry practice should write a comprehensive business plan including an analysis of the competition within the geographic area. We review numerous business plans and projections of Optometry start-ups during the financing process. From my experience with these projects, it is crucial to differentiate one's optometric office and service offerings. This is especially relevant in heavily saturated markets and large metropolitan areas. The best business plans we have come across include an in depth analysis of other vision care providers in the area including some of the following factors:

• Total OD coverage (not all practices have the same FTE coverage, and thus different market share)
• Hours of operation (a potential area in which to capture market share via patient convenience)
• Type of vision care services offered (basic optometric care, medically oriented, low vision, vision therapy, etc)
• Strata of dispensing (low end frames, high end designers, contact lens weighted)
• Breakdown of optical vs. optometric income
• Private practices vs. commercial locations (each has different customer appeal, experience, etc)
• Draw of each practice to the target patient base (see previous bullet)
• Aggressiveness of current marketing efforts by competitors
• Relationship with Lasik centers, Ophthalmology practices, and other providers

This type of information obtained by the start-up candidate about the surrounding competition will help him/her to conduct a SWOT analysis for the new practice. An in-depth examination at the onset of the project will give the startup practice a better chance to obtain the needed financing, gain market share, and differentiate itself in a challenging market.

Otolaryngology ENT practice for sale - Los Angeles CA - Selling Doctor will assist Buyer with transition

Selling Otolaryngology ENT medical practice in Los Angeles CA.

• Established for 30+ years
• Average gross collections of $700,000+ annually with low overhead and high net income
• Well diversified payor mix including IPA capitation contracts
• Trained staff and & fully equipped medical office space
• Seller will assist with transition to new buyer
• Providing office based ENT Otolaryngology care, facial plastic reconstructive and cosmetic surgery, hearing testing, hearing aid dispensing, and VNG diagnostics
• Seller will assist new buyer with transition period
• Contact consultant for info