Should Your Large Dermatology Practice Join an MSO?
“Should I sell my dermatologist office now, or should I wait until I’m ready to retire?”
This question pops up in the minds of countless medical practitioners within the field of dermatology.
If you own a large practice and you’re looking to have a viable exit strategy and take some or all of your chips off the table, you should seriously consider transitioning into a medical support organization (MSO).
What Are MSOs?
MSOs are entities owned by non-healthcare provider investors, groups of physicians, hospitals, or even health plans.
Although MSOs come in different structures, these are generally designed to manage non-medical, or administrative, work involved in running a medical practice.
What Are the Advantages of Joining an MSO?
You’ll Spend 100% of Your Time on Dermatology!
Did you know that dermatologists are the most satisfied doctors, according to Medscape’s 2019 Physician Compensation Report? In fact, 92% of respondents confirm that they would choose the same specialty again!
Unfortunately, managing a practice takes a lot of time and energy. On top of the usual day-to-day activities, you’ll have to handle HR issues, payroll, coding compliance, and revenue cycle management. If you want to spend 100% of your time doing the job you love without having to worry about the administrative and operational demands associated with your practice, joining an MSO makes sense.
Easier Exit from Practice
It’s not a good idea to wait until a change in circumstance compels you to create an exit strategy. If the endgame is in your mind before you’re ready to retire, you’ll have a clearer vision for yourself and your practice. Putting an exit plan in place is easier if you decide to join an MSO.
Additionally, MSOs offer a premium based on your EBITDA or net cash flow. Besides allowing you to provide treatment for your patients while receiving salary, benefits, and bonuses, you’ll be paid a great deal of money upfront and a large sum upon exit.
Why Should You Transition Into an MSO Now?
Tax Changes
Whether you like it or not, tax changes are looming large on the horizon. In fact, they’re expected to go up to about 50% compared to where they are as of this moment.
To put some context around that, if you sell a million of EBITDA at six times today compared to selling it six times next year, you’re going to have to increase your EBITDA by 30%. Otherwise, you won’t be able to realize the same take-home after-tax gain next year as you would this year. Needless to say, taxes will obviously impact how much money you’re going to get at the end of the day.
MSOs are Ready to Buy Now
After having such a rough time last year due to COVID-19, private equity groups are looking to get back on track in 2021.
They’ve never been more eager to add medical practices to make up for the lost time.
Since the demand from these buyers exceeds the supply for medical practices, their offers are higher than ever.
“I’m Ready to Sell My Dermatologist Office Now! Who Can Help Me?”
If you want to maximize your opportunities for success while minimizing your chances for mistakes, it’s best to enlist the help of an experienced team of finance and transaction experts who have your best interests at heart. Do yourself a favor by connecting with America’s leading M&A Advisory and full-service Investment Bank in dentistry and aesthetics – Viper Partners.
At Viper Equity Partners, we represent dental, Plastic Surgery, and Dermatology practice owners from contracting to the closing table. We’re known for our exclusive relationships with private equity-funded Medical Support Organizations (MSOs), Dental Support Organizations (DSOs), and our team of skilled M&A professionals that are unlike any other in the healthcare marketplace.
You can count on us to guide you through every step of the process, from the first phone call to the closing table. Our goal is to get you the best deals and the biggest offers while keeping your interests at the forefront.
Contact us today to schedule your free consultation!