Understanding this topic is really helpful for me personally and I appreciate the responses.

They have staffed most of the Emergency Depts in Richmond for decades. Well run group, very reasonable charges, have avoided all of the "surprise billing" controversy, good hospital citizenship by the partners (committees membership, donating to foundations, etc). They were told there was a mandatory health system wide safety meeting that all members of the group were required to attend (physician partners, physician employees, and PAs). They show up to the meeting at 8am, and the CEO of the health system with other senior leadership and says "Yeah, this isn't a safety meeting. This is a meeting to let you know that your contract is terminated in 90 days, and _______ will be taking over the contract."

And then a partition in the room opens, and there is a food spread, and executives from the new company are standing there saying "Hi, we've heard great things about you and would love for you to stay on with us".

The health system (Bon Secours/Mercy) had received a nice financial incentive to switch, and suddenly a 40 year old physician practice ceased to exist.

from a business end

But having sat through at least 2 of these presentations, the standard deal is this:

PE firm forms valuation of your practice based on EBITDA. They offer you a multiple of EBITDA in a lump sum and then a reduced salary with incentives for some period of time after (usually about 5 years). The enticement for the physician is that this lump sum is realized as a capital gain and therefore not subject to marginal tax rates like regular income.

The other enticement is that they will consolidate with multiple other practices to increase your valuation for a second sell to a larger PE firm, at which point you will realize another windfall.

There is really not a "Secret sauce" to making you leaner - they were fairly candid that most of the time they just increase your throughput. There are some efficiencies realized, but not a ton.

It's attractive if you are at the end of your career and looking for a nice parachute.

for privately ownned "democratic" groups, it is usually a few senior partners with a controlling interest looking to get out of patient cate or greatly reduce their clinical workload that orchestrate the sale

Alternatively, the PE-backed group approaches the hospital and offers a lot of money to put the Emergency Department contract up for bid but essentially the deal is already closed before the RFP is put out. Often, the current group is not even told that the contract is up for bid

The second situation has happened twice in our area, a few years ago Peninsula Emergency Physicians found out that their contract had been put up for bid, and won, by EMCare (Now Envision). Poof...just like that a 40 year old business ceased to exist, and the partners/owners could become employees of EMCare or go work elsewhere. Then, last fall, Richmond Emergency Physicians, the private group that staffs many of the hospitals in the Richmond area, was told they are being replaced by Vituity, with no option to rebid the contract. I told that story elsewhere in the thread