The question, “What is our anesthesia group worth?” is common among group leaders. But a better focus is, “How can we make our anesthesia group more valuable?” Even if selling isn’t on the immediate horizon, enhancing your group’s value creates opportunities, whether for future acquisitions or improving operational effectiveness. Expert anesthesia practice consultants like Enhance Healthcare Consulting can help you identify opportunities to strengthen your group, increase profitability, and position your practice for long-term success.
How Anesthesia Practices Are Valued
Most acquisitions of anesthesia groups base their valuation on reconstructed earnings. Unlike businesses with tangible assets like inventory or equipment, anesthesia groups often distribute all annual revenue to physician owners, leaving little recorded technical earnings. Consultants can assess your group’s operations, reconstruct financials, and calculate “normalized” profitability. Managing your group to maximize profitability ensures your group is attractive to potential buyers while optimizing financial returns to group partners.
What if You’re not Selling Your Practice
If selling isn’t your immediate goal, these strategies can significantly enhance your group’s returns, value and operational performance:
1. Strengthen Relationships with Partner Facilities
- Proactively solidify partnerships with the facilities you serve.
- Deliver exceptional service to current partners while aggressively pursuing new service contracts.
- Meet with facility leadership on a regular basis to discuss issues and present value-added data
- Strong relationships and expanded footprints create sustainable value
2. Develop Internal Revenue Streams
- If your group operates an effective internal business structure, consider turning it into a standalone entity that generates revenue.
- Expand operations like billing, practice management, or staffing services to serve external groups.
- A Management Services Organization (MSO)-style model allows you to offer your administrative expertise as a marketable service while continuing to serve your own practice.
3. Explore Mergers & Acquisitions (M&A)
- Instead of viewing M&A as a passive target, consider acting as an acquirer.
- Evaluate opportunities to acquire smaller local groups or merge with others to create a stronger, more competitive entity.
- Creative acquisition structures, including hybrid models, can maximize long-term value while maintaining flexibility.
4. Leverage Non-Traditional Models
- Explore partnerships with non-competitor organizations to create hybrid ventures or alliances.
- Unconventional arrangements can offer growth opportunities while diversifying your revenue streams.
- Joint ventures or limited-scope partnerships can reduce risk and expand your group’s footprint.
Steps to Maximize Your Practice’s Value
To ensure your practice is operating at its highest potential, consider working with specialized consultants who understand the nuances of anesthesia practices. Steps to take include:
- Refine Your Governance Model: Ensure your group’s governance structure supports quick, effective decision-making.
- Evaluate Compensation Plans: Align compensation strategies with group goals to incentivize optimal performance.
- Improve Financial Health: Assess your group’s revenue streams, expense allocations, and technical earnings to uncover hidden value.
- Secure Capital for Expansion: Position your group for strategic growth through targeted investments in new contracts, facilities, or services.
Why Work with Anesthesia Practice Consultants?
Specialized anesthesia consultants bring industry expertise, data-driven insights, and strategic guidance to help practices thrive. By focusing on operational efficiency, financial performance, and relationship management, they position groups for success regardless of market trends.
At Enhance Healthcare Consulting, we partner with anesthesia practices to unlock growth opportunities, improve financial outcomes, and navigate complex market dynamics. Whether you’re planning for a potential sale, pursuing M&A opportunities, or strengthening your group’s internal operations, we can help you create a roadmap for success.
Contact us online today or call (954) 242-1296 to learn how we can enhance the value of your practice.