Before You Sign: What Physicians Should Know About Today’s Health Care Deals

AGG Healthcare Private Equity co-chair Matt Brohm authored an article for Medical Economics providing insight into how physician practices should proceed with a transaction, given that new avenues beyond staying independent or joining the local hospital system are available to them, including private equity-backed platforms and national management organizations.

“Several factors have changed the landscape of health care transactions,” Matt advised. “Hospital systems and large medical groups are now joined by private equity-backed platforms, management services organizations, and payer-affiliated groups. Many states have adopted or expanded laws requiring notice or review of certain health care transactions. Ownership structures have become more layered.”  

Matt identified five key questions that sophisticated buyers expect from a thoughtful physician partner, as well as the practical steps before you sign, starting with assembling your own advisory team early, asking for plain-language explanations of key terms, examining your compensation over a five-to-seven-year horizon, reading every document containing restrictive covenants, and talking openly with your partners to achieve internal alignment before making external commitments.  

“The more you approach the transaction as choosing a long-term partner, rather than simply selecting the highest bid, the better your chances of ending up with a deal that works for you, your patients, and your new investors,” Matt said.  

To view the full article, please click here.