Buying a Medical Practice in Ontario?

Important Questions and Issues to Consider:

  • What are you prepared to spend in order to step into a “full” medical practice immediately?
  • Are you prepared to add your name to an existing office lease agreement, or sign a new one?
  • What is the current structure of the current expense reimbursement at the medical office you are looking to join?
  • Is the practice a solo office, or a group office?
  • How familiar are you with the “ins and outs” of the business, and administrative aspects of managing a FHO practice and roster?
  • What is the size of the group? Where are the location(s)?
  • What partnership and group governance agreements are currently in place?

Benefits to Purchasing a FHO Practice:

It is the ideal time to purchase an established FHO practice; however, it’s important to consider the substantial time, commitment and costs involved. Although there is an initial upfront cost, the long-term benefits far outweigh the short-term investment, such as:

  • Guaranteed, steady income from day one, as opposed to starting from scratch and building a practice with unpredictable income.
  • Improved work/life balance.
  • Optimized operational performance and practice stability.

Young female doctorWhile the FHO model is the most popular payment model within family medicine, it can also be the most complicated. It is critical to your practice’s success, if you decide to use the FHO payment model, to ensure you are familiar with the “ins and outs” of practicing and optimizing a FHO practice from day one. Contact Cirrus to learn more about running a FHO practice.

Considerations in the Medical Office Lease:

As a physician looking to acquire a medical practice, it is also important to take proactive measures to ensure you are protected from potentially dangerous language in the medical office lease. Be sure to dig deep, and ask the selling physician about their lease obligations. One key question to ask is whether the office lease will be assigned to you, or, will you have to sign a new lease?

Evaluate important lease terms such as economics, critical dates, and any details and risks hidden throughout. Some significant lease terms include:

  • Term of Lease: How long is your lease term, and do you have “options to renew”?
  • Assignment Requirements: Are there any provisions in the lease that will affect your ability to sell or transfer the practice down the line?
  • Personal Financial Obligations: Who is guaranteeing the lease? Will the lease be listed under your name? Will you be responsible for rental obligations in the event a future tenant defaults on rent?
  • Protection & Security: If something unexpected should occur, do you have a death and disability clause in place to protect you and your family/estate if you’re unable to work?
  • Practice Location: Does your lease allow your landlord the right to relocate you? If so, who pays for the relocation costs, you or them?
  • Practice Expenses: How are expenses distributed in the lease (if in a group dynamic), and what will you be responsible for paying on a monthly basis?

It is recommended to have the lease professionally reviewed before moving forward with your new practice venture. This will help ensure you are protected, while also providing the flexibility to continue to run and grow your clinic. The best way to do this is by seeking help from a healthcare leasing expert such as Cirrus Consulting Group for a professional, and thorough review of the details of your office lease.

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Allow Cirrus Consulting Group to help facilitate the purchase of your FHO practice.
Contact us for a complimentary consultation, or call 1.800.459.3413.