Explore the driving forces behind hospitals’ strategies to build aligned networks in primary care and key specialties, the motivations of doctors to sell their practices, and the shared challenges of integration in this white paper about physician practice acquisitions.

Physician Practice Acquisitions

Which Physician Practices Hospitals are Acquiring and Why

With phyisican practice acquisitions on the rise, Jack Healthcare sough to find out who and what were driving these trends. A survey of physicians completed by Jackson in the fall of 2013 found physicians, frustrated by the changing healthcare landscape and unsure of the impact healthcare reform , were seeking to exit private practice by offering ther practices to prospective buyers.

Hospitals were not only considered by physicians to be the ideal buyers for their practices, but also the most likely. 52% of the physicians surveyed by Jackson who sold their practices in 2013 sold to hospitals.

There are two sides to every story, so Jackson Healthcare sought to get the hospital perspective to see what so many were willing to take physicians up on their offers to sell. Jackson surveyed 123 hospital executives who had either completed acquisitions in 2013 or had acquisitions planned for 2014.

The survey found offers from physicians looking to sell started coming at a time when hospitals were looking to build their primary care networks, develop admissions and referral strategies, and solidify their positions in competitive markets. For many, the unsolicited offers were a way to address these goals, and the opportunities were too good to pass up.

The number of hospitals planning to acquire practices in 2014 as the result of physician offers fell to 48%, down from 30% in 2012. This could reflect hospitals being more strategic in the acquisition activities.

Hospitals appear to have started small. More than half of the hospitals that completed acquisitions in 2013 gained five or fewer physicians in those deals. A trend to watch will be whether the opportunistic purchases of small practices was a chance for hospitals to test the acquisition waters before launching a full-blown buying spree. Or, they could be buying small practices they plan to expand later.

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