purchasing building new practice

[zolof]

I noticed there was thread earlier about someone selling there practice. I have a similar opportunity to buy the a small building of 3 small offices that a retiring psychiatrist is selling. he also wants to "give" the patients all to the new buyer preferably a psychiatrist. He tells me he has been there for decades, retiring now. Sees about 65 percent insurance, 20 percent cash, and 15 medicare. Most pts referred from Medicine providers in the same block since its in a medical neighborhood so to speak. He has to turn away new patients all the time. I have never ever considered buying a building/practice anyone here have experience and went through with it? I am aware that the practice is worth what the building is valued.

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[Psychotic]

Ask him if he has a recent appraisal of the real estate from a certified appraiser, preferably an MAI, that you can read. Otherwise you need to hire someone yourself to see if his price is realistic.

 

[TexasPhysician]

My opinion is that an insurance practice isn't worth much at all from a patient perspective. Cash practices are more for less work.

A commercial realtor can help with the building price.

Is the clinic designed well in regards to charts, furniture, and helpful staff willing to stay? That is worth whatever you are willing to pay.

 

[michaelrack]

R u in network with the insurance companies? It's very unlikely a solo provider will be able to sell u his insurance numbers

 

[Jules A]

Also worth considering the practice style. I've been involved in not a purchase but a retiring psychiatrist who basically referred all this patients to our new OP practice and it wasn't a long term financial gain. This was an ancient doc and most of his geriatric patients were not on 1 but 2 benzos for decades. It was not only problematic from a management standpoint but exhausting addressing disgruntled patients who were sad to leave their trusted psychiatrist and not in favor of me telling them that in addition to the multiple contraindications of long term benzo use especially in older people and the fact they nearly fell in the waiting room that we'd be slowly reducing their xanax and klonopin. Worth noting in general these were very nice people who just had the misfortune to have spent decades with a physician who didn't stay current. I'd estimate only 10% stayed long term, they are lovely and have made progress, but not exactly a financial boon for the practice.

I think selling the business portion might be difficult and time consuming. I'd consider making an offer on the building only if they aren't able to sell the entire package.

 

[zolof]

Also worth considering the practice style. I've been involved in not a purchase but a retiring psychiatrist who basically referred all this patients to our new OP practice and it wasn't a long term financial gain. This was an ancient doc and most of his geriatric patients were not on 1 but 2 benzos for decades. It was not only problematic from a management standpoint but exhausting addressing disgruntled patients who were sad to leave their trusted psychiatrist and not in favor of me telling them that in addition to the multiple contraindications of long term benzo use especially in older people and the fact they nearly fell in the waiting room that we'd be slowly reducing their xanax and klonopin. Worth noting in general these were very nice people who just had the misfortune to have spent decades with a physician who didn't stay current. I'd estimate only 10% stayed long term, they are lovely and have made progress, but not exactly a financial boon for the practice.

I think selling the business portion might be difficult and time consuming. I'd consider making an offer on the building only if they aren't able to sell the entire package.

all good points. Yes dont have the details yet of all of that. I will definitely try to find out. thanks

 

[zolof]

R u in network with the insurance companies? It's very unlikely a solo provider will be able to sell u his insurance numbers

good point.
I am paneled with couple of panels only. He was basically trying to sell the building and the bonus that that he has connections over the decades to all the psychologists and medical subspecialty providers in the area.