Home Authors Posts by Nick Hernandez, MBA, FACHE
Nick Hernandez, MBA, FACHE
Succession planning is one of the most important decisions a physician will face, yet many neglect to plan their exit until they're ready to retire.
It is imperative that all physician owners have a shared vision and that all staff members are aware of the desired future direction of the practice.
Forming a joint venture with another healthcare organization may be seen as a plausible solution. The success of a joint venture though highly depends on thorough research and analysis of the objectives. Here are some pros and cons of joint ventures for medical practices.
Mergers represent a challenging and risky strategic decision. The decision to merge should be fully challenged before physician groups decide to go ahead, particularly given the average performance of the returns and the risk associated with the potential outcomes.
A joint venture is an agreement between two or more healthcare entities usually entered with a specific goal in mind. Each party is invested in terms of capital contribution, the time and effort put forth to complete the defined tasks. The partners pool their resources and expertise and share in the risks and rewards.
Succession planning isn't something you can do once and forget. It is also advisable to have at least annual discussions with key employees regarding succession planning, including how to manage effectively during a transition.
For those that are considering merging with another private practice entity, there are many things to strategize about vice just assuming there will be a windfall of benefits by consummating a merger.
Valuing a medical practice is more of an art than a science and you must always keep in mind that the "Asking Price" is NOT the purchase price.
For those that are considering merging with another private practice entity, applying a systematic approach to strategic due diligence can yield huge returns to practices considering mergers.
Financial metrics not only help to track the performance of your practice but also can be used to increase accountability of your in-house staff as well as outsourced billing companies.
Performance metrics help you know how well the practice is doing as well as determine what needs to change and what should stay the same.
We should view strategic planning as a process that involves continuous adjustment and improvement. It is a solution-by-evolution, not a solution-by-engineering.