Medical & Dental Practice Transactions

Buying or selling a practice can be one of the most difficult financial decisions that a medical or dental professional will ever have to make business-wise. The number of potential pitfalls and unknowns is usually very large but with the right advice, the risks can be mitigated, and the unknowns ascertained. PracMD can help you take out much of the guesswork associated with selling or buying a healthcare practice.

Practice value is affected by a wide range of factors, many of which first time buyers and valuers inexperienced in healthcare valuation are unlikely to be aware of. Many of the factors are specific to the type of transaction envisaged and the specific practitioner looking to purchase a practice or a practice’s books.

For example, on reviewing a patient list when valuing a practice, factors that are often overlooked but may significantly affect the value of a practice to a specific purchaser include:

• Whether the patients see different practitioners each visit or the same practitioner: seeing the same practitioner each time suggests that they have a specific relationship with that practitioner and are not just practice clients. Hence, purchasing a practice without retaining that specific practitioner is likely to lead to lower patient retention.
• Patient sociocultural demographics: e.g. patients that speak a specific language may be coming to the practice because certain staff speak that language. The value of that practice to you is likely to be significantly less if you cannot continue to provide those language-specific services as patient retention is likely to be poor.
• Patient medical complexity: patients with complex medical needs are much more likely to be attached to specific practitioner due to continuity of care needs, and their retention following a practice purchase may be difficult unless appropriate transition/succession planning is implemented.
• Patient sex/gender versus practitioner sex/gender: many patients see a specific practitioner because of their sex/gender as they may be uncomfortable seeing other practitioners. A common example may be a female GP that sees a significant amount of women’s health and is accredited for Antenatal Shared Care (ANSC). Patient retention, and hence practice value, is likely to be very low if the practice purchaser is not female and similarly accredited.

PracMD has staff that understand healthcare and can work with you to identify these issues early on, plan for them, and help ensure that you make the right decisions when purchasing a practice.

Preparing a practice for sale is a lot more exhaustive than preparing a property for sale. The value of a practice can be maximised by planning well in advance, making strategic business decisions that will increase the practice’s attractiveness to potential buyers, as well as streamline the process for you.

Our pre-sale review is based on our pre-purchase valuation and review procedures, and looks at your practice from a buyer’s perspective, attempting to identify actionable items most likely to help you get the most for your practice. Our review includes:

• Practice inspection
• Site study
• Competitor and marketing analysis
• Contracts review
• Human resources review
• Financials and tax review
• Cash flow, receivables & payables review
• Suppliers review
• Business insurance review
• Intellectual property review
• IT and systems review
• Staff expertise review
• Practice patient demographic review

Learn more about PracMD's pre-sale practice valuation services on our dedicated Practice Valuation page.