financial advisory case study.

The Challenge
The sole owner of a multi-physician group practice desired to sell his ownership stake to a third party but was advised by Advantage after a due diligence valuation that the practice - in its current state - was not worth the desired sale price. The overhead was approximately 90%, the collection of patient and insurance accounts were neither timely or efficient, there were no financial controls in place.

The Solution
In order for the owner to receive the desired value, Advantage recommended - and subsequently implemented - the following initiatives to improve the equity in the business:

• Recruited and trained practice administrator and business office manager and restructured the responsibilities and duties of both positions
• Implemented business process protocols to accelerate cash flow
• Redefined job descriptions for the entire staff and implemented a performance based appraisal system
• Placed a moratorium on all non-revenue spending for the practice
• Implemented a labor productivity management system
• Established a community ambulatory surgery center (ASC)

The Results

• Reduced days in accounts receivable from 150+ days to 45 days or less
• Created a high performance management team that ensured staff accountability
• Lowered the practice overhead to 55%
• Increased new patient volumes 25%
• Increased surgical volume by 50%
• Increased shareholder equity in practice and ASC by $3,350,000 - as documented by net proceeds of sale to a third party entity