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 to share why his team’s experience shapes their approach to transactions, and how they prioritize win-win partnerships over quick deals.
Editor’s note: This interview was edited lightly for clarity and length.
Question: You’ve mentioned your clients see your organization as “ASC and healthcare folks,” rather than purely finance. How does that philosophy shape the way you approach deals compared to traditional investment bankers?
Jim Freund: We all started in the surgery center space and in outpatient healthcare between 30 and 40 years ago. Every member of our senior team has worked exclusively with owners, practices and surgery centers for decades. What got us into this was seeing that physicians were not able to capitalize on everything they put into building their practices and surgery centers. We wanted to help them.
Everyone on our team has run practices, run surgery centers, developed and syndicated facilities, provided the soft services and technology that run the centers. We came from actually being side by side with physicians, with the goal of not just helping them sell their surgery centers, but creating a win-win relationship with partners to make for a successful transaction and partnership. Both sides have to come out of this as winners. Physicians have to feel good, enjoy what they’re doing, and want to continue building on what they started. Partners have to add real value and help the organization become more successful.
We see a lot of investment bankers who have finance degrees and are very smart, but many are chasing the money. We focus on helping physicians evaluate and understand their options so they can make decisions accordingly. We negotiate best pricing and terms, share our knowledge, and create a transparent, risk-free process for clients. At the end of the day, we don’t want physicians to feel any obligation to transact unless they find the right partner at the right price and terms. There shouldn’t be a cost or obligation unless they move forward. That’s always been our MO.
Q: Can you characterize what happens to healthcare when physicians aren’t able to capitalize with their transactions in that way?
JF: The toughest thing we see is remaining independent and the challenges that come with it — market consolidation, reimbursement challenges, regulatory challenges, recruitment, retaining staff and the capital needed to grow. It’s not the case for all groups. We’ve walked away from some where it didn’t make sense. But for many, it’s a lifeline to future success.
We’ve seen physicians wait too long, with no succession plan, many nearing retirement. It doesn’t have to happen that way. We talk to them about timing, what they need to look at, and the right partnership makeup. There are many options besides private equity. There are at least half a dozen partnership models available. Whether the timing 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.
