Becker's ASC Review

44 Executive Briefing: Executive Briefing: Physician Practice Acquisition & Integration Trends Physician Control Physician Contro r l Interventional Management Services is a physician-owned Ambulatory Surgery Center management and development company located in Atlanta, GA. We provide management services to Ambulatory Surgery Centers with a physician-focused strategy. Centers managed by IMS range from small, one-room, single- specialty ASCs to large, multi-specialty, physician- hospital joint ventures. Partnering with IMS brings sta- bility, reliability and support to existing surgery centers, and years of expertise for the successful implemen- tation of new centers/ventures. meaningful part of the surgery center, we feel that being an own- er is the responsible thing to do" says Mr. Rosenbaum. "Their mindset is changed because the staff, equipment and supplies are now theirs." Here are seven key points for independent physicians to consider before making a sale: 1. Does the larger organization involve physicians? It's often a challenge for physicians to lose control of their practice after an acquisition, but if they're able to participate in the decision- making process as part of the larger organization, the transition is smoother. 2. What is the larger organization's philosophy? The larger organization should fit with the individual physician's culture and philosophy. "It's not just about the price; the company's philoso- phy is extremely important to consider", says Mr. Rosenbaum. "Be mindful of that going through the process." 3. Can you see yourself embedded in the organization's workflow? Take time for an onsite visit of the larger organization and consider the workflow. Spend a day at the practice or center to see how the days would flow after the sale, and ask employees about the organization. "The employees will tell you a lot about the practice," says Mr. Willis. "Additionally, speak with the other physicians offline. You won't be the first person who has done a transaction with the or- ganization, and there even may be other physicians in the same specialty who have been through a transaction. Speak with them about their experience." 4. What information systems are they using? The practice may need to purchase or incorporate new information manage- ment systems depending on what the larger organization uses. The systems change could have a huge impact on the ASC's workflow and organizational management during the integration. 5. Is the larger organization open to new best practices? Are you? The integration process requires both the larger organiza- tion and individual physician to examine current workflow and consider best practices for becoming one. Sometimes the larger organization has a more efficient process; other times the indi- vidual practice has better best practices. "The acquirer has to keep an open mind," says Mr. Rosenbaum. "Sometimes there are processes that are better and when you apply your scale it can make a huge difference." The integration will have an impact on the organization's staff as well as the physician's staff. "You can't underestimate that im- pact," says Mr. Willis. "Make a decision about which best prac- tices to use before completing the acquisition." 6. Do you have good representation? "The best thing a physi- cian can do before a transaction is hire a good banker to repre- sent them in the process," says Mr. Rosenbaum. "I'm more at- tracted to deals where the physician has a representative. It's the banker's job to manage the process." Hire independent representation apart from the buyer's represen- tatives, and even apart from the representatives hired to manage both sides of the deal. Network with colleagues who have been through the process to find a good representative, or connect with corporate partners for a strong recommendation. "If the representative won't put a book together for you, don't con- tinue talking to them," says Mr. Willis. "They need to truly repre- sent you and put a full book together to present your practice and to minimize the arduous back and forth that can occur during the vetting process. That shows how much they're willing to work for you." 7. Will there be a fair compensation plan? The independent physician's practice profitability drives his or her financial suc- cess; as part of a larger organization, the physician needs a fair and comprehensive compensation plan. "It's about having a reasonable base salary and fair compliant incentive plans," says Mr. Rosenbaum. "You also have to make sure the incentive plan is compliant. There are some incentive plans that make sense and do a great job at motivating, but they might not be compliant. That's a huge issue for physi- cians." n "The best thing a physician can do before a transaction is hire a good banker to represent them in the process. I'm more attracted to deals where the physician has a representative. It's the banker's job to manage the process." — Stephen Rosenbaum, CEO of Interventional Management Services

• Cover