Practice Aggregation and Value Creation: Three Different Growth Models

PROGRAM DESCRIPTION: Private practice otolaryngologists face headwinds related to rising costs and falling reimbursement. Maintenance of strong private otolaryngology practices is of critical national interest to serve our local communities by providing high-quality, cost-effective care. The days of solo practice and smaller practices are quickly dwindling. Practice aggregation and organic growth have helped many practices maintain their independence whereas in other specialties and, for otolaryngologists in certain regions, acquisition by major health systems has been the best solution. In this panel, we will present three different approaches to the maintenance of practice independence through growth and aggregation. One approach included aggregation of multiple smaller practices in a regional geography with later development of clinical integration. A second approach includes organic growth including development of a talent pipeline through the development of a community-based residency program. A third approach was a merger of two dominant local practices, followed by organic growth, further acquisitions, and then development of a private equity backed platform. We will review the mechanisms used by each of the practices to integrate physicians, increase revenue, develop professional service agreements with health systems, negotiate with payers, and reduce human resources expenses, and cost of goods. We will share our histories including our successes and our challenges and describe our plans for future growth and the tools we plan to employ to maintain our independence.

OUTCOME OBJECTIVE 1: Analyze top-line practice value based on mixed reimbursement rates to determine mechanisms for acquisition or integration of new physicians or practices.

OUTCOME OBJECTIVE 2: Evaluate different potential options for integration and/or aggregation of physician practices in your unique regional geography.

OUTCOME OBJECTIVE 3: Demonstrate an understanding of the metrics used to determine your practice's enterprise value including an understanding of the calculations used to determine EBIDTA and the levers available to maximize your practice's EBIDTA.

BACKGROUND STATEMENT: Independent otolaryngologists provide care in many regions outside or adjacent to the catchment of major medical centers. Developing and maintaining a strong, independent private practice otolaryngology community will ensure future trainees have a place to practice and care for patients.