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    Everything independent doctors need to know about private equity

    You’ve no doubt heard about large healthcare companies and hospital systems being purchased for staggering sums by private equity firms.

     

    Further reading: Can physicians maintain independence while working as part of a large health system?

     

    There’s a clear appetite for investment—and this trend may be poised for even more eye-popping growth. In 2014, for instance, Bain & Co. found that private equity funds invested $29.6 billion in healthcare company buyout deals globally, nearly doubling the $16 billion invested in 2013.

    But it’s not just the mega-mergers that are in on the action. In my relatively small town of Hagerstown, Maryland, I know of several significant private equity transactions involving local medical practices.

    Investment firms are on the lookout for the right medical practices to invest in. Doctors stand to capitalize on their well-managed, low-debt practices.

    Make the Trend Your Friend

    For decades, private equity firms were reluctant to invest in health care services, given the complexity of the payment models and the accompanying regulatory environment. Today, firms running the gamut from sophisticated boutiques to giants like Goldman Sachs and Blackstone Group are active participants in the sector.

     

    In case you missed it: Hospital ownership of physician practices on the rise

     

    Why is this happening? Simply put, it's getting harder and harder to stay independent—even for mid-size-to-large practices. A 200-provider practice once had a competitive edge against smaller practices. But now, even those larger practices feel powerless versus the large hospital groups. Physicians are challenged with addressing mounting costs while being expected to improve outcomes and adhere to regulatory demands while reimbursements get slimmer. In case you haven’t noticed, the era of disruption is here.

    Next: With disruption comes opportunity

    Karen Coyne, CFP
    Karen Coyne, CFP(R), is a strategic wealth advisor with Raymond James in Hagerstown, Maryland. With over 15 years of experience, she ...

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    • [email protected]
      It is a well-known truth that funding hospitals nowadays became an investment tool to achieve profit. But only for investors. Unfortunately, customers like me and doctors have some troubles because of it. I hope this situation will change. Please keep me updated - contact with me at essays-shark.net at any time!

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