Due diligence is important when looking to purchase a healthcare group. Whether looking at an entire facility or an individual private practice, it is important to ask the following questions before moving forward with a deal.
#1: What are the financials?
Get the group to provide information on its historical financial performance as well as its projected growth. Review the historical results to determine whether or not the provided forecasted growth is realistic. Pay close attention to trends in revenue in similar practice areas and operating expenses as well as the group’s working capital and expenditure requirements.
#2: Does the group have good infrastructure, or is additional investment needed?
In today’s marketplace, this is particularly true for an organization’s technological infrastructure. The IT segment is a critical part of the group and should be thoroughly evaluated during negotiations. In addition to the infrastructure and software needed to support tech, make sure the group complies with the portability of Protected Health Information. A violation can result in fines ranging from $100 to $50,000 per record.
#3: How is the culture of the organization?
It is a good idea to review the group’s mission statement and make sure it is in line with your overall goals. Any concerns over the mission statement could signal a difference in culture that may require additional consideration. A review of internal audits can help to provide additional information to guide this conversation.
These are just a few of the many questions to ask during negotiations to purchase a healthcare facility. The nuances of the questions will vary depending on the type of organization you are looking to purchase. You can mitigate the risk of surprises with thorough due diligence before finalizing the transaction.