Buying a Medical Practice
The obvious initial considerations in buying a medical practice may be the purchase price and location of the practice that you will purchase. However, you should also consider some factors that may be less obvious. The trajectory of the gross revenues that were generated and collected in the recent years, the patient retention rate, the employee retention rate, and the potential future growth or lack thereof are some additional issues that you should consider as a buyer of a medical practice.
Protection against past and future liabilities is a much more important consideration for the buyers than the sellers in transactions for acquisition of medical offices. If your transaction is not properly structured, a buyer may realize too late that there are judgments, lawsuits, and liabilities that occurred when the seller owned the practice for which the buyer may become liable. Therefore, your transaction should be structured so that the Closing date becomes the cutoff date for past liabilities. Also, thorough due diligence of medical practices should be conducted so that potential liabilities are flagged and dealt with prior to Closing.
Buyers should also be aware of substantial tax consequences (and how to best avoid or reduce them) that could result from the allocation of the purchase price. Negotiating the purchase price is only the beginning of negotiations, not the end. A buyer or an attorney that is not experienced in these types of deals could make mistakes that could result in substantial tax consequences. Aside from the financial and legal benefits that you gain from retaining an experienced medical lawyer, my experiences and knowledge could make the difference between putting your practice on a path to success or failure.
As an attorney for doctors that is experienced in buying medical practices, I have the experience and knowledge to provide you with excellent legal representation and set up your practice for success. Feel free to contact me for consultation and/or legal representation for the purchase of your future practice.
Shane Kamkari, Esq.