Gary W. Herschman, Health Care Mergers and Acquisitions attorney, in the firm’s Newark office, was quoted in Part B News, in “Worried Practice Buyers Will Hobble Care? Get It in Writing During Contracting,” by Roy Edroso. (Read the full version – subscription required.)
Following is an excerpt:
Independent practices that become the target of an acquisition by a larger group or system should take steps to protect their autonomy in the contract stage. A recent survey shows that many physicians employed by large entities are dissatisfied with reduced authority and concerned with the resulting impact on care. …
Are the worries real?
The push to increase patient load to boost revenue is frequently cited as a cause of physician burnout (PBN 4/10/23). But there are trade-offs in any change in business practice, including ownership. One of the signal attributes, and advantages, of employed status is the ability to offload many administrative aspects of medicine, including referral sourcing, to management. …
Gary W. Herschman, board member and member of the firm at Epstein Becker Green in Newark, N.J., says physician concerns over autonomy can be a matter of perception, owing to the difficulty of transitioning from full to limited authority.
“When doctors enter into these partnerships, they know that they are giving up business control over their medical practices,” Herschman says. “This can cause issues for some doctors who have been managing their groups for years and are control freaks and micromanagers. But most younger doctors aren’t like that – they just want to practice medicine without the headaches of practice management and administrative duties.”
Herschman mainly works with specialty surgical groups and private equity platforms, and “these issues regarding clinical autonomy haven’t come up with the groups I have advised.” He acknowledges things may be different with the mainly hospital-employed physicians in the PAI cohort - most of whom, he notes, are “from pediatrics and general medicine, where a lot of consolidation happened five to 20 years ago, with Optum and other big national companies buying up primary care groups. Their experiences are quite different from what we’re seeing with these [more recent] specialty private equity platforms.”