Part 2. Private Equity buying medical groups — What’s the deal?
Ep 42 is part 2 (Ep 41 is part 1) of the episode talking about private equity buying medical groups.
There is an increasing amount of private equity purchasing/partnering of medical practices in the US. We are seeing in in a variety of fields such as radiology, anesthesiology, emergency medicine, dermatology, just to name a few. I wanted to explore why this is happening.
My guest on this episode is Kurt Schoppe, MD a radiologist in Dallas, TX. Kurt is part of the American College of Radiology Economics committee and has experience in the private equity world.
On this episode we talk about:
What is private equity?
Why would they be interested in medical practices?
- Fragmentation of medical practices leads to market opportunities.
- They are good at logistics, operations and can increase efficiencies to improve returns.
- They can have access to capital to make discount purchases.
- They see healthcare as a more predictable way to make money.
Why would a practice want to sell to these firms?
- FOMO (Fear of Missing Out) Other groups have done so we probably should also.
- Thinking that your group doesn’t have the expertise to handle a changing healthcare reimbursement model
- Money right now (particularly for senior partners)
What are they looking for when deciding to buy a practice?
What does this mean for medicine as a profession?
What does this mean for younger physicians?
Here is the article Dr. Schoppe referenced about corporate veterinary practices. https://www.bloomberg.com/news/features/2017-01-05/when-big-business-happens-to-your-pet
You can find Dr. Schoppe on twitter @kurtschoppe
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