Insider Offers Advice on Physician Practice Consolidations

Transactional activity in the health-care space is continuing apace, and nowhere is that more apparent than in the physician practice sector. About 30 percent of all 2018 health-care deals involved physician practices.

Jay A. Martus, and attorney and self-employed health-care consultant who worked with a large physician practice management corporation for over 20 years, shared with me tips for companies and private equity firms interested in investing in this sector.

His advice ranged from the practical—choose acquisition targets in practice specialties that are highly fragmented—to the aspirational—pursue a strategic plan that gives physicians a sense that they are more than just a cog in a machine.

Most of all, he said, acquiring entities should have a plan to bring about real, positive, and sustainable changes to acquired practices. Just consolidating practices without improving them doesn’t work, he said.

Martus knows what he’s talking about. His first company, Sheridan Healthcare, grew from a 40-doctor anesthesia practice into the largest physician practice management firm in the specialty. Martus helped steer the company through all those transactions, culminating in its consolidation with AmSurg in 2014. AmSurg is now part of Envision Healthcare, a publicly traded corporation that had a net revenue from continuing operations of $1.99 billion in the third quarter of 2017.

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