77th ASSH Annual Meeting - Back to Basics: Practice and Education-IC51: Private Equity Is Coming: What It Means for Your Practice (AM22)

Video Transcription

Video Summary

The video transcript features a panel of physicians discussing their experiences with private equity partnerships in the orthopedic industry. They cover topics such as the tax advantages, negotiation process, choosing the right partner, and the impact on physician income.<br /><br />One of the physicians, Dr. Viola, initially against private equity partnerships, changed his mind when he realized the significant tax advantages. By being paid in long-term capital gains, he could lower his tax rate from 50% to 30%, resulting in significant savings. He emphasizes the importance of understanding where the money will go and proper financial management.<br /><br />The panelists discuss the negotiation process with private equity firms and highlight that everything is negotiable, including veto power, ownership percentages, and control over ancillaries and intellectual property. They recommend hiring a team to represent one's interests and thoroughly understanding the deal.<br /><br />The doctors also discuss the benefits and challenges of working with private equity. They note improved patient satisfaction due to enhanced customer service and reduced waiting lists. Additionally, the physicians mention that private equity firms often improve billing and collection processes, leading to increased reimbursements.<br /><br />Concerns regarding practice independence, non-competes, productivity guarantees, and future sales or consolidation are addressed. The panelists stress the importance of selecting the right partner and conducting thorough due diligence.<br /><br />Overall, the physicians have had a positive experience with private equity partnerships and view them as a favorable tax strategy for orthopedic practices. However, they acknowledge that the impact on individual physicians may vary based on their career stage and personal circumstances.

Meta Tag

Session Tracks Practice Management

Speaker Abner M. Ward, MD

Speaker David Wei, MD, MS

Speaker Kathleen E. McKeon, MD

Speaker Lawrence T. Donovan, DO

Keywords

physicians

private equity partnerships

orthopedic industry

tax advantages

negotiation process

choosing the right partner

impact on physician income

long-term capital gains

financial management

ownership percentages

control over ancillaries

intellectual property