20 Jun Practice Consolidations: Advantages and Disadvantages

A Practice Consolidation occurs when two doctors combine their practices to form a single, jointly-owned practice. In other words, Practice A and Practice B combine (consolidate) to become Practice C that is equally owned by Doctor A and Doctor B.

There are numerous advantages…

• In virtually every practice consolidation each doctor’s monthly income will increase instantly and significantly due to overhead reduction.
• Often one of the doctors provides procedures that the other doctor refers out, so practice production increases by keeping these procedures (and income) in house.
• Additional doctors, hygienists and staff allow the practice to easily facilitate additional growth by expanding office hours and days.
• Sharing practice management and administrative duties frees up time for more personal production and/or more personal time.
• You are often able to assimilate a much better staff by selecting the best employees from both practices.
• With more than one doctor/owner it is no longer necessary to close the practice when you want to take a vacation.
• A Practice Consolidation eliminates a competitor… the other doctor who becomes your “partner”.
• Finding a buyer interested in acquiring your 50% ownership interest when you are ready to retire is relatively easy.
• The practice Operating Agreement makes it easy to bring on additional “partners” when and if needed.

While there are numerous advantages, we can only come up with one disadvantage…

• Both doctors are virtually certain to end up in higher income tax brackets!

Contact PARAGON today to schedule your complimentary consultation to learn more about Practice Consolidations… no obligation, just a very worthwhile education!