Pursuing the Private Equity Model for Hospital/ Physician Transactions
- August 27, 2019
In the past, transactions involving hospitals and physician groups have typically fallen under a few common structures. Although there are several alignment models that hospitals and physicians can pursue, a significant increase in activity is occurring where practices are selling to private equity (PE) firms (or private equity-backed platform companies). However, these deals typically involve vastly different structures and terms compared to typical hospital-physician transactions.
Coker’s latest white paper, Pursuing the Private Equity Model for Hospital/ Physician Transactions, explores private-equity “like” structures when performing transactions related to hospitals and physicians. Now, as many groups consider their options to sell, they are looking at potential buyers other than hospitals. If the consensus among the physicians selling their practice is to maximize the valuation paid at the time of the transaction and ultimately forego their independence to an outside organization (hospital or PE firm), then the PE model may likely be the best option.