By Julie Davis

Recently, I heard a saying that really resonated with the entrepreneur in me and that should resonate with you, too: “What’s worse than putting all of your eggs in one basket? Putting all of your eggs in somebody else’s basket!” With physician practices continuing to be one of the most complex businesses to operate, even plastic surgeons are turning to hospital systems, managed service organizations, large medical groups, and private equity firms to relieve them of the burdens of business ownership. Because private equity firms know this, and because they view plastic surgery as a cash business, PE firms have begun targeting surgeons in attempt to purchase their practices and have particular affinity for plastic surgery practices that also own Ambulatory Surgery Centers. So, if you haven’t received a call from a PE firm yet, make sure you’re ready when you do!

First and foremost, don’t be fooled by the smooth talk and the appeal of big initial payouts. You know the old saying, “If it sounds too good to be true, it probably is.” Private equity firms are in the business of making money. The most important part of success for these companies is to create “the medical equivalent of a big-box retail chain—a business model in which an efficient practiced perfected in one location can be replicated” in another location.1 By that definition alone, it is hard to think that physician autonomy won’t be impacted, among other things, and very few physicians I know want to lose their autonomy.

That being said, not all private equity deals are bad and might even be the right choice for some physicians. Regardless of whether you have considered giving up on private practice or whether you would never consider selling your practice prior to retirement, there are a few proven tips that every physician practice should do, no matter what.

1) Focus on Selling Your Practice So You Never Have To

If at any point in time, you become inclined to leave your practice (ie, retirement, disability, career change, relocation), what will your practice be worth? Do you know? Many physicians plan for these common events through investing, insurance, and buy-sell agreements, without ever thinking about the value to be received upon such an event. Think of your practice as a product rather than a service for just a moment. Would you rather sell a Maserati or a Toyota?

More importantly, reverse the scenario and ask yourself, which would you rather buy (assuming cost was of no concern)? Why? Is it because of the status symbol of the Maserati, the perceived value, the bells and whistles, the luxuriousness, resale value, or maybe all of the above? You can bet that your patients, and your potential patients, also want to buy that Maserati. By focusing on business strategies to create a top-of-the-line plastic surgery practice, you ensure your practice’s financial health and longevity.

Should the day come when you decide to sell your practice, the higher value will matter big time! Therefore, when making decisions about your practice, you should always consider how the decision will affect the value of the business. If it won’t increase the value in some way, you may want to reconsider.

2) Never Stop Growing

The world of cosmetic and plastic surgery changes so fast that it’s hard to keep up. Device and product manufacturers are constantly selling the “latest and greatest” thing. Striking a healthy balance between not overspending on new technologies and avoiding practice stagnation is tricky for sure. That said, practice stagnation will absolutely equate to revenue stagnation, which is simply not sustainable over the long term. Therefore, you absolutely must keep growing.

But don’t worry. Growing doesn’t necessarily mean you have to turn your practice into a group of 50 physicians or add lots of employees. In fact, many of the larger groups fail miserably at the very things that are needed for long-term, successful practice growth. Doing just a few key things, however, can ensure that your practice will keep growing well into the future.

  • Create a Killer Brand – Most physicians don’t know how their business will be valued should a sale event occur. Therefore, most never consider what can be done to improve the value of their practice. Without giving you a lesson in business valuation, there is an easy way to think about this. The most expensive practice for sale is the one that can run without YOU! This is accomplished a few ways. First, brand your practice so well that even if you were no longer the physician treating, the patients will still want to come to your office. That means, your brand is readily recognized for excellence regardless of whether you are the doctor rendering services. When you have a killer brand, you create life-long, loyal patients who refer friends and family, resulting in a sustainable and growing revenue stream.

Has your brand reached killer status? Ask yourself the following: Do patients view you, your extenders, and your staff as experts in their work? Are you targeting the market that you want to serve? Do you have a clear vision and mission statement, and do you have a current business plan that is aligned with these goals? Are you “social” (actively and consistently using social media)? Does your practice demonstrate professionalism consistently (in emails, blogs, in person, etc)? Are you top of mind in your area of expertise and in your community? Are you well regarded within the medical community that you serve? Is your practice truly patient-centered (not just something you say)? Do you offer up-to-date technology with regard to patient care? Are you a thought leader among your peers? If you answered no to any of these, don’t delay. Work on it ASAP.

Also, please don’t forget that you are in the service industry! That killer brand you worked so hard to create can be affected negatively and for a very long time by poor customer service. Make sure your entire team delivers out-of-this-world customer service during every patient encounter. Simply put, plastic surgery patients are consumers (of healthcare). Consumers favor businesses with the best customer service and often will even pay more for it. Bad customer service will absolutely cause lost revenues and lost opportunities.

Your practice is no different. Most importantly, never assume your patients are treated well by everyone on your team. Mystery shop your practice regularly! Provide training and development for your staff. Continuously focus on employee engagement, and always lead by example. If you don’t treat your patients with compassion and respect, neither will your staff.

3) Be a Doctor, Not a Manager

Very few physicians received training in business management, business law, employment law, finance, human resources, risk management, investing, or any of the things required to manage a medical practice well. Moreover, the business of medicine is incredibly complex today and is far more complicated than other small- to medium-sized businesses. While many physicians recognize that investing in a highly skilled leadership team is crucial, doing so may nevertheless be cost-prohibitive. There is good news, however. You can achieve the same level of leadership without having your own C-suite on the payroll.

First, start by hiring a practice manager who is highly skilled at operations. This person is your day-to-day business manager who will make sure your practice runs smoothly, effectively, and efficiently. This person is your “boots on the ground” and is the key to making sure you can focus on treating patients rather than worrying with the day-to-day decisions and tasks. The day-to-day stuff is not the best use of your time and does not generate income, so why would you even want to do it? Oversee for sure, but give up the tasks and minor decision-making to someone with a proven resume and track record.

Second, seek out trusted strategic partnerships that will deliver a holistic approach to assisting with the complex business needs. That means, your advisors need to give advice based upon the whole business, not just the part they represent. One way to attain this holistic business advice is to hire a boutique consulting firm that can offer you a wide range of experts all “under one roof” and for an affordable price. Because these experts work intimately together on the same team, every recommendation considers the whole business rather than the silo that each expert represents. Without this holistic approach, physicians end up with numerous advisors (such as practice consultants, risk managers, marketing firms, investment advisors, benefits managers, various insurance carriers, tax advisors, and financial advisors) who often have competing interests and therefore may be causing more harm than good.

Ask yourself this simple question: “Do all of my professional service providers (such as those mentioned above) consult with each other before making recommendations to me?” My bet is, your answer is “no” and that you are missing out on opportunities to save money, create alternative revenue, reduce taxes, and maximize investments, all of which would improve the value of your practice.

Remembering these three simple tips will help you create a foundation for a financially healthy and highly valued practice that is sustainable over time.

Julie Anne Davis, JD, MHA, CMPE, CASC, CPHRM, is a published book author and consultant who specializes in plastic surgery and cosmetic practices. She is also the owner of Pura Vida Body & Mind Spa Inc, located in Fleming Island, Fla.


1. Krause P. Why PE firms are buying orthopedic and ophthalmology practices. August 3, 2017. Available at: