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Re: Question about buying a medical practiceFrom: ainsron (ainsron@sbcglobal.net)Wed Sep 14 19:19:16 2005
I assume he's trying to sell his equipment, accounts receivable and "goodwill." The amount that goes to each should be looked at carefully with an accountant and tax advisor. The equipment has already been depreciated by the physician and he will have to recapture any value in the current year he sells it, so usually they will not place much value on it. You also have to look at what value the equipment actually has to you, i.e., how long will it last, how much needs to be immediately replaced, etc. Goodwill is very non-tangible and should be the most negotiable of the practice costs. In this day and age, it has very little value, at least in most communities and with current insurance constraints - (how long will it take for you to become a participating provider for the same insurances he takes?). Patients do not belong to us and can quickly vote with their feet if there is someone else in town they know and a new doc arrives with no track record. The A/R is the only thing with real value, but you need to calculate as best you can what percentage is collectable and agree on how long you have to pay back the amount - do you have to take out a bank loan, will he allow you to pay back a percentage of the amount collected monthly until it is paid back. You'll need the cash flow when you start up, but he may also need something up front to cover his retirement/relocation costs. If you are retaining and acting as the new repository for his medical records, you need to consider how much work that will be for your office - storage, copying and sending them out, how long to retain them, etc. Hope this helps and gives you some things to think about. Ronald E. Ainsworth, MD, FACOG -----Original Message----- From: ob-gyn-l@obgyn.net [mailto:ob-gyn-l@obgyn.net] On Behalf Of GIN11153@aol.com Sent: Wednesday, September 14, 2005 12:24 PM To: Multiple recipients of list OB-GYN-L Subject: Question about buying a medical practice I saw an ad yesterday for a GP practice for sale . In as much as I have been wanting for years to open an OB office, I thought this would be a good opportunity. I could combine family practice with OB. Doc will stay on for a while to help with the transition. He wants $165,000 for a 30 year old turnkey practice. I assume it's a small practice. Since I won't be finished with my nurse practitioner or licensed midwifery credential for about 12-18 months, I'll need to hire a family NP and find a doctor to be my medical director, do deliveries, etc.One OB/GYN had agreed to be my medical director a year ago, but he's still been waiting for his MediCal provider number after 22-23 months! I don't think he'll get one, as he was buying the practice of another OB/GYN a year ago but that doctor just lost HIS number by doing the billing for the doc buying his practice. I guess I'll have to find another doc. My question for you is how do I figure out if the asking price is decent? My husband's a general surgeon but he doesn't know anyone who bought another's practice. Any advice would be greatly appreciated!! Gail Neuman RNC CPHW SNP Perinatal education Perinatal Nurse Associates Tustin, CA
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