M&A Interest Still Strong

Another indication of how serious healthcare leaders are about physician groups: 56% have a specific team dedicated to hospital-physician practice acquisition. Primary care groups capture the top spot on almost everyone's M&A wish list. Hospitals use primary care networks to control the flow of patients to hospital-based specialists as well as to the ancillary services offered by the hospitals.

Meanwhile, physicians are tired of bearing the administrative burden of running a practice, and they are worried about their future. With the advent of healthcare reform and accountable care organizations, Gross says physicians "just want to be part of a larger group and practice medicine." He says physicians often initiate the merger talks with his health system.

While primary care physicians may get the patients in the door, it takes specialties like orthopedics and cardiology and their expensive medical procedures to help pay the bills. Most respondents see orthopedic, cardiology, and hospitalist groups as popular M&A targets.

Gross expects the acquisition of specialty groups to become more important and even surpass primary care acquisitions. That is already happening in the Tulsa area where he is based. "We spend six to eight hours each week looking at physician acquisitions, and 90% are specialty groups."

But not all physician practices are in such high demand. Geriatrics, neonatologists, and nocturnalists are at the bottom of the acquisition list.

View All Comments Make a Comment

Comments are moderated. Please be patient.