Anesthesia Providers Are Selling Their Practices... Now What?

Should a hospital be concerned if it finds out its anesthesia providers have just sold their practice, or that they are actively trying to sell it? This is a great question. Here’s another: How will the acquisition of the practice by a third party impact the hospital’s anesthesia service?

The acquisition of anesthesia practices has dramatically picked up steam over the past two years. A number of factors are driving this trend:

  • Equity: Venture capital and other types of equity investors are pouring money into acquiring and consolidating practices to create larger practice networks. The business strategy is to quickly consolidate practices to create a franchise practice, with sufficient revenues to package it as an IPO, a new product line and revenue stream for an existing healthcare company to buy, or to sell to another anesthesia company looking to scale up in size.

  • Sellers: It’s a seller’s market. A significant percentage (65%) of surveyed physicians responded that they are either interested in or are actively pursuing selling their practices. Anesthesiologists are just like their physician colleagues. With numerous buyers in the market paying attractive prices, many anesthesia practices are for sale and are being bought.

  • Time is of the Essence: The selling spree is also being driven by buyers and anesthesiologists who are worried that they might miss out on this financial window of opportunity – anesthesiologists want to cash out – especially if partners in the group are in their late 50s and 60s. This may be their last shot at the proverbial “golden ring” to cap off their retirement funds.

Another question many healthcare executives are asking is: Does the anesthesia practice acquisition pricing model make economic sense? That leads us to examine the t