Healthcare practitioners are feeling the squeeze.
A constellation of challenges has been making it harder to maintain a thriving, profitable practice. They didn’t begin with Covid, but the pandemic accelerated trends that were already challenging the viability of smaller practices, Medical Economics reports.
For one, the lockdown offered a vivid illustration of what it was possible to do remotely. The ongoing need for technology investments is the new reality. Healthcare is also suffering from a labor shortage: Nurses and medical technicians are migrating to agencies that can match them with the highest bidder, typically a large healthcare organization.
Add diminishing Medicare reimbursements and supply-chain shortages that are driving up prices for essential consumables (syringes, cotton swabs, etc.), and you have an unforgiving set of market conditions.
So how to respond? In this environment, staying small doesn’t make sense anymore. The way most practices currently deliver care will become even more costly and less effective. Smaller practices of 10 to 40 doctors have less bandwidth to make expensive changes and, some cases, they won’t survive. Private equity buyers have stepped into the fray, offering a way out for practice owners at compelling valuations. But this demand won’t last forever.
If a private equity firm makes a compelling offer for your practice, you should probably seriously consider it. The aerticle outlines what practice owners should know. Read more.
