The healthcare industry is a dynamic marketplace. Buyers are increasingly considering the purchase of physician groups and medical equipment companies. The buyer can take on many different forms. In some cases, the buyer may be a hospital system while in others a private practice or medical equipment business may find themselves negotiating with venture-capital groups. Medical equipment companies may find the prospect tempting as insurance companies continue to cut reimbursements. Physician groups may find the thought of focusing on patient care and leaving business affairs in the hands of others enticing. Whatever the motivation for the sale, medical equipment business owners and physician groups are wise to take proactive steps to better ensure a smooth transition.
Four examples that can be applied specifically to a healthcare business include:
- Review. Analyze the motivation for a sale. If the goal is to expand into a similar healthcare market, an acquisition may be a better prospect. If looking to move on or shift focus away from business affairs, a sale to the right buyer may be a wise choice. Develop a list of criteria for the sale before moving forward with negotiations.
- Prepare. Consider keeping the management team informed of a potential deal. This team is essential for maintaining daily activities while also helping to provide information that could impact the criteria list noted above. It is also important to have all assets and liabilities in order. If possible, secure the release of any outstanding liens before beginning negotiations.
- Comply. It is important to continue to comply with regulations from Medicare and other governmental agencies when going through a sale. A failure to adhere to these regulations can result in serious penalties including a hefty fine. Do not get so caught up in the negotiations that your neglect these requirements.
- Move on. Whether moving on to a new business endeavor or shifting from a focus on business operations to one of providing medical care to patients, prepare to mentally move on to the next stage of your professional development after the sale.
A properly structured sale can benefit both the buyer and seller. The steps noted above are just the basics needed to achieve this goal. As such, it is advantageous to discuss your plan with an attorney experienced in these matters before beginning negotiations.