In this special collaborative episode, guest host Dr. Bradley Block talks with Dr William Blythe and Dr. Drew Locandro about the pros and cons of private equity, including a discussion of the key things to think about when considering selling your practice.

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SHOW NOTES

In this episode of BackTable ENT, Dr. Bradley Block from ENT and Allergy interviews Dr. Drew Locandro (Northwest ENT and Allergy Center) and Dr. Bill Blythe (East Alabama Ear, Nose & Throat) about the benefits and pitfalls of opening their private practices to private equity companies.

Private equity can provide many benefits to community practitioners. Outside investment can contribute more money to marketing and hiring new supportive positions. Additionally, it also levels the playing field for older and younger doctors in the practice in the context of objective management. Finally, private equity firms can take care of administrative duties, such as billing and accounting, thus increasing the free time available to physicians.

On the other hand, retaining complete ownership of a medical practice can provide physicians with more satisfaction and decrease rates of burnout. Dr. Blythe notes that a physician can still retain total ownership of his practice but still outsource basic administrative duties, such as general accounting.

Finally, the doctors discuss the concept of a “second bite” deal. Oftentimes, the original smaller private equity firm will sell the medical practice to a larger private equity firm for a profit. Risks of the “second bite” include undervaluation of the practice as well as loss of physician control. However, Dr. Locandro notes that the second sale may also be financially beneficial for the physician stakeholders as well.