Making acquired physician practices profitable

Many healthcare organizations that acquire physician practices do not realize a return on their investments. Instead, acquisitions often create excess capacity, drive up costs, and reduce an organization's ability to attract managed care contracts. Healthcare systems that acquire physician practices can help ensure that the acquisitions will be profitable by recognizing the benefits and eliminating the barriers to integration, developing a shared strategic vision, developing a progressive governance policy, implementing sound financial management, and achieving critical mass over which to spread fixed costs.