Ensuring the profitability of acquired physician practices

Healthcare organizations are aggressively acquiring physician group practices to create primary care networks and broaden their managed care market penetration. However, few are realizing a positive return on investment after acquisition. The odds that acquired practices will be profitable can be improved if healthcare organizations plan carefully by establishing separate acquiring entities, setting clear goals for the practices, forming skilled management teams with strong physician leadership to manage the acquired practices, and carefully structuring their physician incentive compensation plans.