Little Health Law Blog

Physicians often feel that marketing or branding their medical practice is unnecessary. Perhaps they think that by being a doctor they have a built in identity or they have plenty of patients. This does not even take into consideration the anticipated influx of new patients being thrust into the patient pool by Congress over the next few years.

In reality, physicians who own their own practices see themselves as someone who was “called” to be a doctor. Their medical practice is their career or profession but they rarely think of it as a “business.” The fact is that basic marketing principles that apply to other businesses also apply to the healthcare practice owners.

Medical professionals who own their own practice sometimes think that marketing or advertising is inappropriate or even unethical. This is especially true for physicians who began their medical practice before advertising was as prevalent as it is today. The fact is that marketing and branding a medical practice can do more than generating more revenue and patients. It can help patients who are best suited to your practice, as well as other physicians wanting to make a referral, identify with you.

Most physicians have had no formal business education, training or experience in running a business before opening their first practice. Other than perhaps the new generation of recent graduates from medical school who are entering practice, most physicians are unfamiliar with how to make their practice more noticeable through social media and making their website more relevant to search engines.

Social media can create interest in your practice and allow you to interact with existing or potential patients. It can also connect you with other physicians seeking to make a referral. LinkedIn is a social media tool that can boost your name recognition and your practice’s online image. Facebook can be an interesting place for patients to obtain reliable information or supply input about your practice. YouTube can provide you with a great opportunity to provide a virtual tour of your office and allowing patients to see pictures of you and your staff. Twitter can provide you with information about your followers and give you a venue to provide breaking news about your practice.

Maintaining a professional and informative website can also be an important tool in marketing your practice, allowing new patients to find you on the web and providing information to current patients. many physicians also have blogs, where they provide information on current issues in the healthcare world.

Marketing your medical practice is really no different than marketing any other small business or firm. The same proven strategies that work in other industries apply and are successful in the healthcare industry.
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Physicians often reach a point where they no longer want the headaches of owning their medical practice, which comes with administrative, financial, regulatory and legal burdens. While they might wish to continue to see patients, they no longer want the headaches of ownership and desire the financial security from selling their practice.

Buyers of medical practices generally are looking for one that is well regarded, has a similar philosophy regarding patients, is healthy financially and has a potential to generate income. Finally, they want to be able to arrive at an agreeable compensation agreement. In the process, a buyer will look for anything that could be a deal breaker.

The status of a medical practice is very important for many reasons. Name recognition can be a primary factor for new patients, referrals, hospital relationships and insurance carriers, as well as recruiting new physicians. Reputation is the key. The staff should be prepared for a visit from potential buyers to size up the organization, the office, its furnishings, professionalism and interaction with the patients.

Buyers need to feel like the practice is a group of team players who are willing to work together to grow the practice through eliminating unnecessary expenses, improving its efficiency and the quality of patient care.

Obviously, the physician wishing to sell the practice wants to obtain a generous compensation package. Some of this money will be up front. The remainder can be in the continued employment agreement providing a base salary and incentives for growth and performance. Both sides will have their own parameters and negotiations will be ongoing throughout the process, until the terms and conditions are agreed upon.

Once the reputation of the practice has been accepted and it is determined that there is a group of team players who match the buyer’s philosophy, the task of analyzing the financial health and income potential begins. Financial statements, tax returns, salary histories of staff and physicians, payer mix reports and coding practices must be reviewed. Disclosure of any outstanding liability exposure, including existing or potential malpractice claims must be made. Finally, an examination of the quality of furnishings, equipment and computers must be conducted. It is never a good sign if a practice is still using paper files for billing purposes or patient information.

Just as in the purchase of a home, a primary factor to consider is price. Red flags that prevent a deal from ever getting off the ground are unrealistic expectations of the worth of the practice or unreasonable expectations of future compensation.
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