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September 07, 2011

Why Physicians Should Consider a Merger – A reposting

Since I’m up here in New York this week facilitating a merger between two orthopedic groups, this week’s posts will revolve around practice mergers. When I talk to the physicians this week, I’m going to be asking the question: “Why do you want to merge?” Although the specific benefits of merging are different for each different specialty, location and group, the following are some of the typical reasons groups seek to merge: 

  • Job security, income stabilization.
  • Increased negotiating clout.
  • Additional coverage, specialties or sub-specialties to strengthen competitive advantage.
  • Develop critical mass to initiate new programs.
  • Continue to have access to patients where such access is threatened.
  • Survival of the group in light of physician retirements.
  • Secure system referrals.
  • Attract capital.
  • Improve ability to compete.
  • First step in a plan for further integration.
  • Economies of scale.

These are some of the answers I want to here this week. If I don’t, I will wonder where the “glue” is to create this new group. At the beginning, it is of key importance that all involved understand what the groups are trying to accomplish with the merger.

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