December 01, 2017

New Vistas for Physician Organizations: Transactions with Private Equity Firms

Andrew Demetriou, Lamb & Kawakami LLP, Berkeley Research Group LLC, Los Angeles, CA

Background: The Changing Market

In the past few years, the market for the delivery of physician services has seen a class of new investor entrants — private equity firms have become active acquirers of physician groups and practice assets, providing an alternative to hospital-physician organizations and the traditional growth of physician groups through small acquisitions. For those of us with longer memories, this trend has some parallels to the physician practice management company (PPM) saga of the 1990s, but given the profound changes in reimbursement ushered in by the Patient Protection and Affordable Care Act, the development of enhanced technology (such as electronic medical records) to support physician practices and the availability of advanced data analytic techniques to model and modify physician practice behavior, the transactions which are occurring in the current environment are markedly different from those of a generation ago.

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