How to Buy a Medical Practice
By Michael Jerkins, MD, M. Ed., President and Co-founder of Panacea Financial
Acquiring a medical practice can give you a running start to ownership, but there is plenty
to do before you take over. These nine steps can help you prepare for the purchase and the
transition that follows.
1. ASSEMBLE A TEAM OF ADVISORS
A healthcare banker, attorney, accountant and insurance broker will help you evaluate the
practice and structure the deal.
2. PREPARE YOUR PERSONAL FINANCES
Your CPA can help you work out how much income you’ll need, what assets and liabilities
you have, and any credit issues to fix.
3. FIND YOUR DESIRED PRACTICE
Tour practices in your area and review patient demographics, financials and staffing. Then
submit a letter of intent and complete due diligence.
4. ESTABLISH THE PRACTICE’S LEGAL STRUCTURE
Your CPA and attorney can help you choose a structure that protects you, obtain tax IDs
and set up business banking.
5. GET A LEASE OR MORTGAGE
If the seller leases, review the terms and ask for an extension if fewer than five years
remain. If they own the building, discuss a mortgage with your lender.
6. OBTAIN INSURANCE
Review liability, property, workers’ compensation, disability, overhead and malpractice
coverage with a broker.
7. GET CREDENTIALED WITH HEALTH INSURANCE COMPANIES
Decide which insurers to enroll with, complete provider applications and negotiate fees. A
consultant can help.
8. SET UP BUSINESS OPERATION SERVICES
In the month before you take over, set up accounts, vendor payments, deposits and credit
card processing.
9. FINALIZE THE TRANSITION
Close the purchase agreement, meet the staff, and review policies, equipment and
suppliers. Time working with the seller can ease the handoff.
The right team makes a complex purchase easier. Panacea Financial offers healthcare
lending expertise, flexible financing for acquisitions and real estate, and a dedicated
banker throughout.
Panacea Financial can help AMS members save thousands of dollars. Learn more at
panaceafinancial.com/ams.
Panacea Financial is a division of Primis Bank. Member FDIC.
Michael is the President and Co-founder of Panacea Financial and is also a practicing physician in Little Rock, AR. After earning his BBA in Economics, he deferred his medical school acceptance to teach middle school science in the Phoenix, AZ area while also earning his Masters in Education from Arizona State University. He then completed medical school at the University of Tennessee Health Science Center before finishing his residency at University of Cincinnati Medical Center and Cincinnati Children’s Hospital. With a faculty position and board certifications in both Internal Medicine and Pediatrics, Michael is able to treat patients of all ages and teach medical trainees in both inpatient and outpatient settings.