How to Look at Private Equity Investment in Physician Groups: Orthopedics

Healio

Gary W. Herschman, Member of the Firm, and Yulian Shtern, Associate, in the Health Care and Life Sciences practice, in the firm's Newark office, co-authored an article with Robert Aprill of Provident Healthcare Partners in Healio, titled “How to Look at Private Equity Investment in Physician Groups: Orthopedics.” (Part three of a six-part series.)

Following is an excerpt:

While nearly every other specialty has experienced some level of private equity investment (e.g., dermatology, ophthalmology and pain management), the orthopedic specialty has remained relatively untouched. Having experienced several years of cashless consolidations with practices merging in an effort to leverage size and scale, outside investment into the space has remained all but nonexistent. ...

As part of a comprehensive due diligence review, major investors will evaluate an orthopedic practice’s financial information, agreements and arrangements, staffing models and operational practices. In addition to standard diligence concerns, investors will likely focus on regulatory compliance issues ...