What Do Physician Practice Owners Think of Private Equity?
On this episode of the podcast, TMT Capital Partners' Tom Turmell shared common questions and concerns about PE he hears from owners of physician practices.
Tom Turmell, founder and managing director of TMT Capital Partners, spoke with Middle Market Growth about how health care entrepreneurs are looking to grow their businesses, and the common questions he hears about private equity, which continues to show strong interest in acquiring physician practices.
In addition to his role at TMT, Turmell delivers and teaches a class to physician entrepreneurs at Northwestern University’s Kellogg School of Management, where he serves as director on the executive education team and as an academic director. During the interview with MMG, he described what his Physician CEO class covers, and the questions he hears from his students about selling to a private equity buyer.
Common concerns include loss of control, both in terms of the patient experience and in making key business decisions, as well as questions over future compensation for the doctors selling the practice and junior physicians alike.
Some physicians recall a spate of failed physician practice investments by PE firms over a decade ago, but Turmell says the private equity industry has learned from those past mistakes. Choosing the right investment partner remains critical, and he suggests considerations for physicians to keep in mind as they evaluate potential investors.
During the conversation, Turmell referenced this article published in MMG in May, focused on physician practice M&A.
That article was featured in a health care-themed edition of the magazine. The full issue is available here.
“There are a lot of tools that private equity can bring to the table. I think there’s a lot more thought today around how we incentivize these doctors to succeed post-acquisition, and how we take care of that next round of physicians, those junior physicians, who don’t own equity or a substantial piece of equity in the initial transaction.”
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