Over the last few years, investment activity in the healthcare private equity space has grown exponentially across an ever-increasing number of specialties. This has been
driven in part by a growing necessity for providers to consolidate in order to survive ever-changing reimbursement environment, coupled with the market fluctuations and uncertainty caused by institutional healthcare reform.
In particular, Private Equity (PE) investors have been attracted to four primary sectors within the healthcare industry:
- Facility-Based Specialties: Anesthesia, Radiology, Emergency Department/Emergency Medicine, Hospitals
- Retail Medicine: Dental, Dermatology, Ophthalmology, Pain
- Disease-State Specialties: Gastroenterology, Orthopedics
- Primary Care, Women’s Health, and the Formation of Geographic Platform Groups
Healthcare private equity transactions have gained popularity for a variety of reasons. For starters, they serve as a more profitable alternative to the more traditional means of physician consolidation such as hospital partnerships. In addition, private equity partnerships and recapitalizations offer medical practices access to economies of scale in terms of IT, Electronic Health Records (EHR), and revenue cycle management. A private equity partnership can also create opportunities for the practice to increase access to, and optimize, ancillary services and managed care strategies, among other things.
In addition to the potential benefits for the PE, private equity partnerships can also offer a number of benefits to the practice’s physician members. For example, partnering with a private equity group can create the stability required to establish long term practice and career continuity and allow for the diversification of wealth among the members.
Frier Levitt Private Equity Services
Frier Levitt is experienced in representing medical and dental practices throughout and beyond the life cycle of a Private Equity transaction, including forming platform entities attractive to potential PE partners, and assisting entities in gearing up for the transition.
Once you make the decision to pursue a PE partnership, Frier Levitt is able to leverage connections in the healthcare PE space to assist in finding your practice a suitable partner organization, all while assessing those opportunities best suited for growth. In addition, our regulatory and transaction practice groups will assist you in getting the deal across the finish line.
1. Forming a Platform Practice
Frier Levitt is experienced in assisting providers with the formation of Integrated Group Practices (IGPs), Supergroups and Management Service Organizations (MSOs) which are structured with a particular eye towards creating a platform attractive to potential PE buyers.
2. Go-To-Market Strategies
Frier Levitt can assist recently formed or long-standing practices in preparing to enter the PE marketplace through a variety of “go-to-market” strategies designed to put you two steps ahead, and identify any potential issues before they become game-breakers.
3. Identifying the Ideal Private Equity Partner
When entering the Private Equity marketplace, it is essential that your practice finds a partner that both mirrors its goals and is capable of assisting you in achieving them. Frier Levitt has worked with a variety of practice sizes and specialties in this regard. We will leverage our network and experience in the PE arena to maximize your value in the eyes of potential partners.
4. Private Equity Transaction Services
- Negotiation of key transactional documents on behalf of the practice
- Federal Healthcare Law Regulatory Analysis
- State Law Analysis
5. Post-Closing Services
- Evaluating Growth Opportunities
- Continued Growth and the Addition of “Bolt-On” Practices
- Preparing for a “Second-Sale” Event
- Ongoing Representation of the Platform Medical Practice
- Providing Outside Support for In-house Counsel
Contact Frier Levitt today to speak to an attorney in our Private Equity Practice Group.
Healthcare Private Equity Services insights
Proposed New York Law Would Require Certain Health Care Transactions to be Approved by the New York Department of HealthFebruary 27, 2023
Medical Group Management Association (MGMA) 2023 Practice Management ConferenceJune 7, 2023