The ASC Transaction Philosophy That Puts Physicians First

Jim Freund, managing partner at Physician Transaction Advisors, has spent decades in the ASC space, long before investment bankers began eyeing the sector. Mr. Freund joined Becker’s ASC Review for an interview to answer two key questions on how his team’s experience shapes their approach to transactions:

Question #1: You’ve mentioned your clients see your organization as “ASC and healthcare professionals,” rather than a purely finance-degreed team. How does that philosophy shape the way you approach deals compared to traditional investment bankers?

Question #2: Can you characterize the challenges physician owners of healthcare practices and ASCs face, and why some aren’t able to realize the best outcome when considering a strategic partnership?

Read the interview now on Becker’s ASC Review:

https://www.beckersasc.com/asc-transactions-and-valuation-issues/the-asc-transaction-philosophy-that-puts-physicians-first/

Please note: The interview on Becker’s ASC Review was edited for length. Below you can find a full unedited version which includes additional context and expanded answers from Jim Freund.

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Question: You’ve mentioned your clients see your organization as “ASC and healthcare professionals,” rather than a purely finance-degreed team. How does that philosophy shape the way you approach deals compared to traditional investment bankers?

Jim Freund: Every member of our senior team started their careers in outpatient healthcare and in the ASC space more than 30 years ago. We have worked exclusively with the owners and executives of practices and surgery centers for decades. What led us into this space was seeing that the physicians we had come to know were not achieving the results they expected when selling an interest in their centers. We wanted to help them.

Our team has run practices and surgery centers, syndicated and developed facilities, and provided the technology and services that run the centers. We came from working side by side with physicians, administrators, and staff to help them build successful surgery centers and practices. We leverage this experience, along with the expertise and knowledge that we have gained from managing more than 300 successful transactions, to assist our clients.

This has helped shape our culture and our approach to client engagements. Our view of most investment bankers and brokers is that they are largely finance-degreed individuals who see an opportunity in healthcare. We truly understand our client’s business, why physicians created their ASCs and practices in the first place, why they chose an entrepreneurial path, how crucial clinical autonomy is to them, the challenges and opportunities they face, and what goes into a strategic partnership that is right for their organization.

We focus on helping physicians evaluate and understand their options so they can make the most informed decisions. Our risk-free, transparent process ensures that our clients can find the right partner at the right price with the right terms. Oftentimes, we are engaged after owners have already interviewed and negotiated with prospective buyers. In every instance, we have been able to add significant value to the process, both from a financial and non-financial perspective.

Q: Can you characterize the challenges physician owners of healthcare practices and ASCs face, and why some aren’t able to realize the best outcome when considering a strategic partnership?

JF: The first thing we do is talk about the goals of our client, their challenges, and what they see as their opportunities moving forward. With that, we strive to structure an approach that will result in a win-win partnership, which is truly the only way to create a successful long-term relationship.

We understand that for many owners of practices and ASCs, remaining fully independent is more challenging than ever – market consolidation, reimbursement challenges, regulatory challenges, recruitment, retaining staff, adding services, and the capital needed to grow are just some of the issues that we hear about every day.

For physicians who want to retain their clinical autonomy but have a partner who can help them address their current challenges and, at the same time, support their growth, there are certainly options.

Unfortunately, many groups fail to position their organizations for a successful partnership transaction. Some wait until their members are approaching the end of their career, some are challenged financially or have seen their profits erode, others have lost key partners, or patients, or are not able to retain or recruit staff, have seen their cost structure rise, and a myriad of other issues that can negatively impact any ASC or practice.

Whether the time to sell and partner is right or not, we want to be a resource, helping them plan and strategize for their future. The recipe for failure is not planning effectively with partners. There are dozens of prospective partners and partnership models to consider, and the only way to know for sure what is best for your group is to weigh all your options and evaluate those without any obligation to transact unless you find the right one.