What is your Dental Practice Worth?

What is your Practice Worth in Today’s Market?

Determining Fair Market Value for your Practice is the first step in Exit Planning. We understand the factors that drive or diminish the marketability of Dental Practices.

Why start Exit-Planning now?
No matter where you are in your practice life... Start working on your transition plan now! Having a plan in place does not mean slowing down or retiring immediately; It means you will have the choice to do so when you are ready. With that choice comes peace of mind and security, and the best possible return on your most valuable asset.

What services does Transition Consultants provide?
We provide full lifecycle transaction advisory, including:
• Establishing a selling strategy
• Valuing the practice
• Positioning the practice for sale
• Preparing effective marketing programs
• Identifying and targeting qualified buyers
• Obtain financing for the practice
• Negotiating and structuring the transaction
• Prepare draft contractual agreements
• Facilitate closing

What factors affect Valuation?
We conduct a thorough site visit and examine the Practice’s financial and clinical data in the context of numerous factors which affect value:

• Dental specialty
• Buyer supply and demand
• Payor mix
• Regional dynamics
• Reimbursement environment
• Risk-premium

Do You Have an Exit Plan?
Contact us for a Complimentary Market Valuation and Pre-sale Consultation

800-416-2055

Dentistry Practice for Sale - West Los Angeles

General dental practice established for 20+ years in a desirable part of West Los Angeles. Priced to sell at $75,000. 3 operatories, 1 sterilization/lab room, 1 reception area, 1 private office. Located in a professional building in a thriving community. Excellent start-up alternative for new grads or expansion opportunity for established dentists. Great potential for growth through increased hours and marketing. Dental practice financing is available for qualified buyers. For details call 800-416-2055.

Optometry Practice for Sale - Kentucky

OPTOMETRY PRACTICE FOR SALE – Kentucky.  Established practice with loyal client base. Annual gross collections of $630,000. High Net Income on only 3 days a week.  Primary optometry care with emphases in contact lens and medical eye care. Turnkey opportunity equipped with three exam lanes and modern ophthalmic equipment.  Seller is willing to provide transition assistance. 100% Optometry Practice Financing Available.  Call 800-416-2055 (x225)  www.TransitionConsultants.com

Physical Therapy Practice Southern California

Currently offering a physical therapy practice in Southern California.  This clinic is designated as a Medicare Certified Rehabilitation Agency. Great opportunity for a PT or non-PT to buy a full scope clinic providing Physical Therapy, Aquatic Therapy, and Sports Medicine.  For details contact 800-416-2055

Optometric Practice for Sale – North Carolina

Upscale Optometric practice for sale in North Carolina. Practice emphasis is on primary vision care and contact lenses. Annual gross receipts of $1,750,000 with consistent growth and favorable outlook. Spacious office in a freestanding building, equipped with state-of-the-art equipment. Located in an affluent community with good pace of life. Dispensary carries extensive lines that are moderate to exclusive high-end. Up to 100% Optometry Practice Financing Available (OAC) for qualified buyer. For more details, call optometric practice sales consultant at 800-416-2055 (x225).

Auburn, Alabama Dermatology Practice

Selling a well-established dermatology practice in Auburn, the fastest growing metro area in Alabama. As a college town, Auburn is a hub of arts, culture and recreation. Great family-oriented community. Annual collections of $700,000 with a low overhead of 32%. Practice provides medical and surgical dermatology services. Substantial growth potential by adding cosmetic dermatology and Mohs surgery. 100% dermatology practice purchase financing available to qualified buyer. Contact dermatology practice sales consultant at 800-416-2055 (x225) for details.

Orange County Dermatology Clinic

Selling a dermatology practice in beautiful Southern California. Exceptional opportunity to acquire a long-established, premier clinic in Orange County, located between Los Angeles and San Diego. Thriving community offers many recreational activities and access to parks, beaches and cultural events. Desirable work/life balance and good pace of life.

The practice provides a full range of medical, surgical and cosmetic services including Mohs micrographic surgery. This high volume clinic has enjoyed consistent organic growth with gross collections in excess of $3,700,000. Aesthetically pleasing clinic is very spacious, with sufficient exam rooms, offices, and a lab for multiple providers. Physicians, extenders, and well-trained office personnel to remain with the practice.

Up to 100% dermatology practice purchase financing available to qualified buyer. The selling doctor will remain for transition assistance.

This practice purchase opportunity is offered by Transition Consultants, a dermatology practice sales and valuation firm providing transaction advisory, merger/acquisition, and appraisal services to physicians, medical groups, and clinical organizations. Dermatology is one of our core competencies; Our team has valued and structured dermatology-related deals for a multitude of individual physicians, health groups, and private equity groups. Contact our dermatology practice broker at 800-416-2055 (x225).

Why Dentists Should Understand Their Active Patient Count

The active patient count is the primary tool for measuring the goodwill of a dental practice. It has great importance for both the owner and the buyer of a dental practice. The active patient count is defined as the number of different individuals seen in the practice during a prior specified time period (typically 12-24 months). As important as this factor can be, many selling dentists do not know their active patient count or realize its significance. There are two main roles to consider when it comes to the active patient count.

The Role of the “Active Patient Count” During the Purchase

One of the primary reasons for purchasing an existing practice is to acquire the active patient base. When we break down and prioritize the value of the different assets that comprise a dental practice, dental equipment can often be of less value than other components. Expensive dental equipment can be acquired in a short time, and can be the one asset within the practice that actually loses value over time. However, it can take years to build a patient base. The active patient base simply represents current and future cash-flow to the practice. It can be the single most important asset and usually has the most value. What contributes to the value of the patient base is the actual length of time it has taken to develop. The patient base in a typical general dental office can take up to 7+ years to build. If the transition is structured properly, the idea is that the majority of the active patients will continue to receive and pay for services. This represents future cash-flow for the new owner. There are a variety of items constituting the “goodwill” of the practice, but the active patient base is the most significant.

The Role of the “Active Patient Count” as a Practice-Management Tool

This active patient count is also valuable in the ongoing management and operation of the practice. The active patient count is helpful in calculating and monitoring the practice’s potential. For example, a well-running dental practice with an estimated $400 “benefit” per year per patient, and an active base of 2500 patients grosses receipts of about $1,000,000. Comparing these estimates to what practices are doing elsewhere, both locally and nationally, will help to provide an indicator and show areas that may need improvement.

The active patient count will reveal whether the practice can support a full or part-time associate. A solo practice attempting to incorporate a full-time associate requires a minimum of at least 2,000 active patients. Fewer than this number can show that the practice will have difficulty supporting more than one doctor.

The active patient count also helps with analysis of other staffing needs, especially from a hygiene perspective. The average, fully booked hygienist sees 10 patients per day, equaling (with a six-month recall schedule) 250 recall patients for each weekly hygiene day. If a practice undergoes a normal attrition rate, they will experience approximately a 15% erosion of their active patient base each year as patients relocate, change providers, etc. In a healthy and growing practice, the practice will replace these patients with 20–25 new patients per month. If the number of available hygiene days is not continuously increased, the inability of patients to be seen in hygiene may limit the growth of the practice and its future income.

In a well-run practice, statistics show that 70%–80% of new patient referrals come from the existing active patient count. Therefore, relying on the practice’s existing patient base as the primary marketing tool requires carefully reviewing the active patient count. Without the patients, the only other source for new patients is an external marketing program. Without a doubt, increasing the patient count will do wonders for your overall bottom line. If the practice is booked for weeks or even months out due to an effective patient-retention and hygiene recall program. Then, it can be argued that this will lower the overall overhead while increasing the bottom line for the owner. This will undoubtedly improve the bottom-line for the owner-dentist while helping to reduce the need for an expensive external marketing program.

Whether used as a management tool for owner-dentists or as an evaluation tool for buyers; knowing the active patient count and its various uses and applications is critical to the long-term success of the dental practice. Once the initial number is determined, it is relatively easy to monitor and track. The active patient count coupled with the annual gross receipts is something that takes just seconds to calculate on an annual basis, but is critical to the monitoring of any dental practice.

Dental Practice Start-Ups: The Good and the Bad

Building your own practice from the ground up gives you the ultimate degree of control in creating the professional environment you want. From the facility itself to equipment and employees, you’re in charge of deciding what works best for you. You’re engaged in a creative process that, while time consuming and capital intensive, will ultimately produce the work environment you’ve dreamed of, unimpeded by dated equipment and facilities or the inheritance of another dentist’s potential problems.

Dental practice start-ups can have plenty of challenges of their own. A successful start-up practice is dependent on the dentist’s ability to sell his or her services and requires a significant degree of business and marketing skills. Before the practice is even conceptualized, an important part of that planning is ensuring that the demographics of your chosen area will support your practice. Are there enough local residents of a certain income level for your practice to thrive? And how do you determine what income or population level is adequate for you or for your location?

It is recommended to conduct an informal research to ensure that your selected locale is not already saturated with existing practitioners. You will want to “run the numbers” to determine what number of practices would indicate a saturated market in your area. If you are committed to living and working in an area that already has numerous dental practices, then acquiring a practice with an existing client base and cash flow might make the most sense as you would minimize the amount of marketing required to establish your business.

And finally, some loan companies may be more reluctant to lend funds for a practice start-up, as there is no income history, existing equipment or property to use as a collateral base.

Pediatric Practice for Sale California Orange County

Have you thought about buying a pediatric practice?  We currently have two practices which are available in Orange County.  These are excellent practices.  One is a part-time opportunity which can be acquired as a start-up alterntative or expansion of exisiting operations.  It boasts gross collections of $300,000 and net income of $180,000 on only 20 hours of MD coverage annually.  The second practice is a full-time opportunity with gross collections of $700,000 and net income of $300,000.  For details on these listings please call medical practice broker at 800-416-2055.


Also contact us for details on pediatric practice appraisal and valuation

Leasing space for a dental practice

An important component in the success of a dental practice is the lease agreement for the office space. Occupancy costs can be one of the largest expenses in a dental practice. More importantly, selection of a good location is critical to patient flow and income. Therefore, dentists should consider the lease of an office location not just as a necessary expense, but as an investment. If the location is poorly chosen or if the terms of the lease are overly slanted in the landlord’s favor, it can affect your finances as well as reduce the ability to transfer or sell the practice. A new dental practice buyer is unlikely to assume a highly unfavorable lease and purchase a challenging or unsuitable location.

Running and growing a dental practice is hard enough, and an above-market lease payment can be a drag on growth. New dentists sometimes fall into the trap of associating high-end, high-cost office space with high earning potential. These are not necessarily associated with one another. Be sure to conduct a feasibility study and formulate a detailed business plan before making the site selection.

Also, with the amount of extensive build out and lease-hold improvements done in a dental office, a dental practice cannot be easily moved. Once the build out has started, consider yourself committed to the location. It is important to remember that the property owner’s broker or attorney likely drafted the lease agreement. You should always seek the advice of your own broker or counsel before engaging in such an agreement. Failing to do your due diligence can be a costly mistake!

Charles Kim is a dental practice broker at Transition Consultants, a practice merger and acquisition firm. Mr. Kim provides transaction advisory and dental practice valuation services to dentists and dental groups nationwide. He can be contacted at 800-416-2055 (x224).

Income-based method for valuing a medical practice

The income based approach to valuation is commonly used in the valuation of medical practices and healthcare businesses.  However, appraisers who apply the improper methods (mostly out of convenience) can drastically over or under value the practice.  One frequent mistake I see is the use of the capitaliztion of cashflow/earnings method when the practice has a clear history of volatile profitabilty.  When possible, it is better to use the discounted cashflow/earnings method.  Even if the business forecast is somewhat unclear, the discounted cashflow method offers the appraiser a much higher degree of accuracy.  This is especially relevant when appraising smaller medical practices; reimbursement changes have an effect of greater magnitude on these entities.  Avoiding shortcuts and using the proper methods is critical to an accurate assessment of practice value.

New source for Optometry Practice Financing

OptometryLoans.com is now offering a new source of financing for Optometrists, providing 100% financing for:

* Practice Purchase + Working Capital
* Start-up Practices
* Practice Loan Consolidation & Refinancing - Increase Cashflow
* Fixed Rates as low as 6.5%
* Terms up to 15 years

For details please contact one of our Optometry practice loan experts at 800-416-2055

Growing an optometry practice by obtaining certifications

For optometrists looking to further their treatment plans and gain additional skills, there are additional vision care certifications which can be obtained. This can be a great opportunity for new optometrists starting a private practice to differentiate themselves from the competition. Established optometrists can also benefit from these certifications and sharpen their skills. In California for example, a glaucoma certification is available which allows optometrists to treat these conditions in patients over 18 years old. While the requirements can be cumbersome, the certification it is an excellent way to improve skills and treat more patients.  Ultimately, the more patients treated and the wider scope of care you can offer will help to improve practice revenues.  Among the requirements for the certification (§ 1571 Requirements for Glaucoma Certification) as adopted by the California Board of Optometry are the following:

• Maintaining an active optometry license in good standing
• Be certified to use Therapeutic Pharmaceutical Agents (TPA)
• Complete a course of at least 24 hours in diagnosis, pharmacological, treatment and management of glaucoma
• Complete a required case management involving at least 25 patients treated for 12 or more consecutive months. This involves patient evaluation, necessary testing, diagnosis, recognizing glaucoma type, and creating treatment plans, and making referrals to an ophthalmologists as needed. There are a variety of case management treatment options. Among these are:
• Case Management Course
• Grand Rounds Program
• Preceptorship Program

For optometrists who achieve the glaucoma certification, each renewal period will involve 10 hours of glaucoma specific continuing education.

Dental Practice Valuations

Dental practice valuations can be a challenging task with many complexities. A professional valuation company can charge thousands of dollars to determine the fair market value of a practice. Before spending that money, it is important to do your homework and choose an appropriate valuation expert, and to properly understand the benefits and limitations of the valuation report.

Unfortunately, there is no standardized universally accepted formula or “rule of thumb” that a valuation company may use to establish the value of a dental practice. There are many objective factors that should be considered to determine the value, and there are as many subjective factors unique to the dental industry (and to each specialty within the dental industry) that are just as important.

In reality, a valuation of a dental practice is closer to providing a subjective opinion rather than using complex formulas or “industry standards”. Be sure to work with someone that understands the dental industry to develop a reasonable and useful dental practice valuation. This valuation should be discussed in further detail with your financial advisors to prepare for the transition process.

Naturally, the valuation will incorporate much of the financial data to analyze the “numbers” of the dental practice. Perhaps more helpful, will be analysis of the key factors of profitability and growth that are unique to the specific practice being evaluated. Each dental specialty has its own attributes that must be considered, such as different standards for reimbursements, payor mix, percentage of patients by referrals, etc.

Charles Kim is a dental practice broker at Transition Consultants, a practice merger and acquisition firm. Mr. Kim provides transaction advisory and dental practice valuation services to dentists and dental groups nationwide. He can be contacted at 800-416-2055 (x224).

Westchester New York - Selling Dermatology Practice

Transition Consultants had been retained to assist in the sale of a general clinical dermatology practice in Westchester County, New York. Established for 34 years, this practice has primarily focused on the diagnosis and treatment of dermatologic pathology. Presently all MOHS and dermatologic surgeries, pathology, patch testing, and cosmetic procedures are being referred out, but could be retained in house to increase revenues by a qualified physician buyer. The practice payer mix consists mainly of Medicare and PPO, offering desirable fee for service reimbursement rates. Currently the seller works 30 hours a week, with very little hospital and skilled nursing facility visits, generating consistent gross revenues of $650k and discretionary earning of $450k. Seller is open to an extended transition and willing to remain part time for up to 2 years.

Optometric Loans Funded this Week

We funded two optometric loans this week. One was as startup practice in Phoenix Arizona. Project total of $180,000 included office build-out, leasehold improvement, lanes, display cabinetry, frame inventory, and working capital.

The second project entailed the refinancing and debt consolidation of a optometry practice in San Diego California. The orginal term loan was a practice startup loan which was wrapped with additional business debts into a lower fixed rate term loan. The resulting monthly debt service improved the practice cashflow greatly. Our streamlined finance processing and optometry practice appraisal services make these projects headache-free for our clients.

Just Sold: ENT Otolaryngology Practice in Los Angeles California

We just completed the sale of an Ear Nose and Throat medical practice in San Fernando Valley California. This is a medical and surgical otolaryngology practice established for over 35 years in the West Valley near a major hospital. Servcies provided include Allergy, Hearing Testing, Hearing Aid dispensing, VNG Diagnostics, as well as some Facial Plastic Reconstructive and Cosmetic Surgery. Average Gross Collections approximatley $700,000 annually with High Net income. Diverse Payer Mix Including IPA Capitation. Trained Staff & Fully Equipped Office. We are also offering a cosmetic practice for sale and surgery center.

Practice for Sale Dermatology Southern California

Acquisition opportunity in Southern California. Well established dermatology practice for sale with excellent revenue stream ($3.7 million+ annually), providing full scope of medical dermatology, surgical procedures including mohs, and some amount of cosmetic procedures. High volume clinic with great reputation and growth potential. The office is a large facility with approximately 5,000 square feet, including 11 exam rooms, 3 doctor's offices, 2 business offices, a lab, and staff area. Seller will assisting buyer with clincial and operational transition to ownership. Financing for dermatology practice purchase is available to qualified buyers. For details contact medical practice broker at 800-416-2055 (x225)

Medical group mergers and acquisitions

Many smaller physicians looking to integrate with hospitals may have a better option by selling their practices to health groups. Recent article about the dynamics of medical groups buying practices. This could also affect the medical home model and accountable care organizaitons in the way health care is delivered and how services are reimbursed.

Ophthalmologic Surgery Center for Sale

Selling ophthalmology practice and surgery center in Florida display annual gross revenue of ~$780,000. Solo ophthalmology practice mainly serving adult and elderly patients. High percentage are followed for glaucoma-related conditions. Services provided include office consultations, Cataract, Glaucoma, SLT, and Oculoplastics. The ambulatory surgery center included in the practice is licensed by the State of Florida, and accredited by AAAHC and Medicare.Payor mix is mostly Medicare (80%) with smaller proportion of PPO (18%) and Cash (2%). Approximately ≈ 4,000 patient visits over the last 12 months. Referring sources include other Physicians, Patients, Directories, HMO & PPO Panels. Current number of providers includes 1 Ophthalmologist, 2 nurses, 2 Front Office staff, 1 part-time Ophthalmic Tech, and 1 part-time scrub tech. Extended transition assistance available to new physician buyer. Ophthalmology practice appraisal is also available.

Priced for Immediate Sale: Medical/Interventional Pain Practice

Medical/Interventional Pain Medicine Practice For Outright Purchase or Buy-in. Excellent opportunity to join a well-established practice in Delaware with ownership track. Thriving pain medicine practice with great work/life balance. Annual gross collections in excess of $1,100,000 and robust net cashflow. The office is fully equipped and includes a procedure room with C-arm. All outpatient care with no inpatient coverage. Practice is located in a large professional building with ample space. Well trained staff and systems in place. Expansion opportunity by providing additional interventional services. Seller is willing to offer a flexible transition and buy-in structure. Ideal physician buyer would be residency or fellowship trained in medical pain management with exposure to interventional procedures. Up to 100% medical office financing is available to qualified buyer.

Electronic Medical Records and Meaningful Use: Upcoming Event

Health care administration event coming up: Health Care Executives of Southern California is hosting an event entitled Electronic Medical Records, 21st Century Healthcare's Essential Tool. Event will be at California State University Long Beach on June 16, 2011 at 5:30 PM - 7:30 PM, CSU Long Beach - Pyramid Annex, 1250 Bellflower Blvd., Long Beach, CA 90850. Should be an excellent presentation given the increased important of Electronic Health Records and meaningful use requirements for Medicare reimbursement.

Practice for Sale Dermatology Southern California

Opportunity to buy a dermatology practice in a highly desirable, affluent community of Southern California. This is a premier, high earning practice with gross collections of $3,700,000+ in 2010. Services offered include a range of medical, surgical and cosmetic services including Mohs micrographic surgery. Consistent organic growth and increase in patient volume. The medical office space is an aesthetically pleasing 5,000 square foot premises with 11 exam rooms, 3 physician offices, 2 business offices, a lab, and staff room. Dermatology financing available to qualified buyer. Selling physician will remain for transition assistance to new buyer.

Selling Medical & Interventional Pain Practice

Excellent opportunity to acquire an interventional and medical pain practice in the Northeast. This is a solo practice generating annual collections of ~1,100,000. Great work/life balance with 100% outpatient based patient care. Service mix is currently 80% medical pain and 20% interventional pain but there is a great deal of expansion opportunity given the underserved patient need for interventional pain procedures in the area. The office is situated in large medical building with ample exam rooms and offices; additional room is available for expanding the procedure room into a surgery center. C-arm and other equipment already in place. This practice is the largest pain management practice in the region. A second medical provider and additional extenders could be added to accommodate patient volume. Currently the most common procedures performed are steroid injections. Selling doctor will assist new buyer with transition period. Financing is available to qualified buyer



Also visit new listings for medical practice appraisal services and optometry practice sales listings.

Florida Optometry Practice for Sale

Selling an Optometry Practice on the beautiful West Coast of Florida. Comprehensive vision care practice with gross collection of ~$1,300,000 and robust growth. Roomr for new buyer to readily expand optometrist coverage. Selling optometrist will remain for post-sale transition period. Financing is available for optometry practice purchase.

Success Factors for Refractive Surgery Based Ophthalmology Practice

Many refractive surgery-based ophthalmology practices have experienced difficulty in the wake of economic downturn and industry-wide changes. This has forced practice owners to re-evaluate critical factors and change focus in order to sustain ongoing success. Gaining new market share, maintaining patient volume, and increasing cashflow is vital to sustainability. This article is an overview of key factors to consider.

Business Focus

The business focus of a refractive practice varies by locale and should be considered in a changing market. The dynamics for refractive surgery can operate very differently from the services in the course of a normal ophthalmology practice. In a soft market for many elective eye surgeries, business diversification is necessary as a hedging strategy. Whether a new or existing practice is entering the refractive market, an investment requires serious capital and time resources. Generally, a practice will choose one of three major strategies: co-management only; handling a lower case volume of surgeries performed at a laser center; or developing a full volume in-house refractive practice. Choosing a primary strategy and maintaining a local geographic focus is crucial to establishing credibility within a market. An overextended practice with a wide focus or with remote locations is nearly impossible to maintain without increased financial resources, improved efficiencies and exceptional operational experience.

Market Share Analysis

A market share analysis of most metropolitan areas will yield similar results. A typical area can support one or two major refractive surgery practices and four or five secondary participants. Determining the primary and secondary players is not always straightforward, as private organizations do not typically make their statistics publicly available. A handful of the top practices generally comprise a lion’s share of the case volume within a specific market. The percentage of market share which each practice maintains is relatively static due to a fixed reliance on referrals. Significant changes in market share usually come from major marketing campaigns, the purchase of entities to secure referral sources (beware of Self-referral, Stark, Anti-Trust, etc), or errors from competitors. A practice’s ability to grow individually is as important as the overall growth in volume of the market in which it resides. One of the barriers to entering and remaining successful in many markets is the challenge of gaining even a small percentage of market share. Providers in the established markets are usually well-established players with many years’ experience and use the latest technology to leverage their market share. The key to remaining successful is continually monitoring the playing field and revising internal and external strategies to stay nimble.

Financial Forecasting

Although markets are often unpredictable, financial forecasting is a necessary part of planning the future of a refractive ophthalmology practice. Practice owners must transcend the focus on current numbers and anticipate new trends. The 3-5 year time horizon is important, even though forecasting methods may not always be accurate. Proposed initiatives must be made with cash flow consequences in mind as economic conditions warrant business changes. Practices must be prepared to make rapid shifts; their ability to scale up or down based on market trends and the general economy will dictate survival. Forecasting also involves apportioning for the acquisition of new surgical technology, and equipment considerations must contribute to the bottom line within a reasonable timeframe. New equipment must generate sufficient income to offset ongoing expenditure spent on building brand awareness and developing case volume.

Technology

The demand and marketability of refractive services can also be driven by advances in technology. The most sought after procedures usually include the latest technology, though older technology is still available. Practice owners must make careful capital considerations when deciding whether to acquire new lasers and equipment. They must also weigh the options of leasing equipment versus purchasing, or avoiding both options altogether by paying to use other surgery centers. The painful cash flow consequences of equipment acquisition are especially poignant in today’s economy, as many lasers are sitting idle in a soft market. Some ophthalmologists who do not own lasers may have less of a burden in a soft market, though their profit margins may be slimmer. Physicians with their own laser centers must make careful considerations to accommodate changing markets. In the past, surgeons have been too eager to acquire new technology without evaluating cash flow consequences first.

Market Niche Selection

Selecting and occupying a market niche is important especially in a saturated, mature market for refractive surgery. Niche selection is dependent on the skill of the surgeon as much as the current saturation of each particular niche within a market. Deciding whether to stick with a discount, value, or premium market niche will depend on the patient demographic, demand, and skill of the surgeon. Although a particular provider’s level of skill may warrant a premium niche status, the saturation of that niche can be a barrier to entrance. In addition, practicing within a particular niche involves certain expectations of services, care, and price points. Adjusting prices without adhering to market segment dynamics can be problematic. Simply reducing fees to increase volume can have the effect of reducing profit margins. Capital expenditure and working capital are required for future growth. These expenditures reduce cashflow to equity or invested capital in a refractive surgery practice. Tenure in the refractive surgery market and physician reputation in the community support different niches and price points. Some of the new strategies which have emerged in the last decade deal with difficulties in pricing and market saturation include price negotiation strategies, patient testimonials, live surgery observation, and in-house financing options.

Advertising Budget

It is not uncommon for advertising to be one of the largest expenditures of refractive focused practices. The costs of print, television, radio, and internet advertisement can soar at rapid rates. Newer practices must spend especially significant sums on advertising to build a steady patient flow. After building this initial flow the practice can reduce advertising efforts as their referral base expands. The amount of advertising expenditure depends on local competition, growth goals, and the efforts applied to developing referrals. Consumer advertisement remains a crucial part of the overall marketing mix. The effective use of advertisement in this manner involves the proper tracking of response sources and a reliable follow-up system. Strategies used to convert ad responses into sales include free consultations, free meetings with surgeons, and public seminars.

Staff and Physician Extenders

Properly trained staff is crucial within a practice and effective management techniques are pivotal to honing their ability. Staff affects the ability to deliver continuity of care, good customer service, and the cultivation of a practice image. A typical office may include a refractive surgery coordinator/counselor, support staff, and a surgeon who can manage clinical and management tasks. The proper use of staff and extenders can also be a very effective cost reduction strategy. Hiring a lower cost extender such as an optometrist or medical ophthalmologist will allow the surgeon(s) to maximize their time in the operating room. The staff can help to categorize patients and appointments and direct workflow to the appropriate extender or physician. Greater practice efficiency is achieved by taking fringe work away from the operating surgeon and increasing profit per unit of time.

Patient Referral Base

The referral base is the lifeblood of a refractive dominated practice. Patient-to-patient referral remains the number one source of new patients in almost every mature practice. Maximizing referrals requires staying in touch with past patients and building relationships. This requires good patient database management, regular bulletins, and periodic survey calls. Another vital source of referrals comes from other providers such as Optometrists. Optometry referrals have a large and growing influence on the case sourcing mix in many practices. These referral networks are made through business alliances with optometrists, the sharing of co-management services and fees with optometrists, and buying an optometry practice for sale within the referral area. A practice’s market share can be increased considerably by acquiring additional referral sources. Acquisition strategy must involve careful consideration of self-referral, Stark, and Anti-Trust statutes. A medical practice sales consultant and healthcare attorney can assist with this process.

Recent Sale: Orange County Pediatric Practice

SOLD: We just completed the sale of a medical pediatric practice in South Orange County California. This is an ideal opportunity for a pediatrician seeking work/life balance and take-home income above and beyond what could obtain as an employed physcian. Robust discretionary earnings in excess of $350,000 annually. The patient base primarily consists of small children and adolescents. Payor mix is a combination of PPO, HMO plans, MediCal, and other State managed programs. The clinic is all outpatient-based pediatric medicine, vaccinations, and minor procedures. Fully equipped space including Electronic Health Records. The office space is designed to be kid friendly and is painted in bright colors with murals and newer fixtures. The location is easily accessible from the 5 freeway with plenty of parking. Steady referral base of other Physicians, Patients, Hospitals, HMO and PPO Panels. Purchase loan financing available to qualified physician buyer.

Medical and Surgical Dermatology Office in Chicago Illinois

Dermatology office for partnership buy-in or outright purchase located in the Chicago Area. Focus of the clinic is medical & surgical dermatology. Gross revenue collections of ~$1,000,000 dollars annually with 4 days per week of dermatologist coverage. Good sized space located in a Medical Professional with 3000+ square feet. There are seven exam rooms, two doctor’s offices, a procedure room, and a lab. The payor mix is primarily PPO insurance (60%). Remaining payors and insurance consist of Medicare (18%), HMO (12%), other insurance and patient pay (10%). Selling dermatologist is willing to remain for transition to new buyer. There is dermatology practice purchase financing available for this transaction. Seller may also entertain hiring the buyer as a locum tenens or associate doctor with a structured buy-in / buy-out. Please call medical practice broker for details.

Sold: Interventional Pain Management Practice California

Just completed the sale of a pain management practice in central California. This is an established practice collecting $1,600,000+ annually. Emphasis on evaluations and pain management; well trained medical staff and office staff in place. Buying physician will retain selling doctor through transition period and fill-in coverage. The practice offers a spectrum of pain managmenet treatment including medication management, epidural steroid injections (cervical/thoracic/lumbar/caudal, facet blocks, discography, intercostal nerve blocks, radio frequency, intrathecal pump implants, and spinal cord stimulators. Visit our website for additional pain management practices for sale, medical physician job positions, and locum tenens opportunities.