Independent vs. Private Equity Journeys for Urology

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The right tech today can set you up for success whichever way you turn

In the practice of urology, independence is under threat. Pressured by increasing government regulation, powerful hospital systems and other market forces, many urologists are selling their practices to hospitals, others are holding out, and some are partnering with private equity firms to help them survive and thrive. 

Private Practice. The American Urological Association found the number of urologists in private practice decreased from 63% to 52% between 2015 and 2021, and that 45% are now employed by hospitals and academic medical centers.1 

Staff member view data analytics on a screen.Acquisitions. The total number of healthcare buyouts nearly doubled during the COVID-19 pandemic. Bloomberg Law reported 1,588 acquisitions announced or closed in 2019, with physicians’ practices second only to long-term care facilities.2 In 2021, however, that number had exploded to nearly 3,000 — a record — and the top five subsectors were life sciences (524 deals), healthcare IT (422), physician practices (393), medical devices (374) and cannabis (283).3

Readiness. If you value independence — choosing either to remain in private practice or to pursue a private equity partnership — then making the right technology moves right now may set you up for greater success going forward. 

By 2021, the AUA’s annual census found that urologists working in large groups of 10 providers or more had grown to 37%. 

Urology practices scale up to survive 

In the early 20th century, urologic services were delivered primarily through local practices comprised of a few physicians each. In the 1990s, regional practices emerged, driven by pressures on compensation and a desire for greater negotiating power. Practices also sought new revenue sources, such as ambulatory surgical centers and imaging, laboratory, research, radiation and pharmacy services.2 

Large number of staff members form a group.By 2021, the AUA’s annual census found that urologists working in large groups of 10 providers or more had grown to 37%.1 Today, national urology platforms are forming, perhaps motivated by: 

Regulatory affairs. New burdens such as the MIPS program, value-based care, alternative payment models, EHR rules, and others require time and resources to manage, weighing on an independent physician’s core mission of treating patients.2 

Economies of scale. National networks can share best practices and administrative functions such as revenue cycle management and information technology.2 

Subspecialization. As the volume of clinical information expands, larger practices may allow individual urologists to specialize more.2 

Urology practices leverage technology to thrive 

The right EHR system may be able to help urologists retain their independence while potentially easing the burdens related to management demands, information challenges, legal requirements and regulatory hurdles. 

The right software may also help keep your practice competitive with engagement tools to help attract patients and modern technology to help retain employees. Perhaps best of all, it may help you recover the time you need to do the thing that matters most — treat patients. 

When evaluating EHR software, ask these important questions: 

ModMed Urology software appears on a computer, an iPad, smartphones, and an Apple Watch. Management. Do you have to buy, maintain, and replace server hardware and software, or is the system cloud based? Do you have to be in the office, or can you access the system wherever you have internet? Do you need a computer to see your schedule, charts, messages, etc., or can you get them via iPad, smartphone and Apple Watch? How easy is it to implement, and is the support based in the United States? 

Information. Does the software learn your common diagnoses and treatment plans and present those first — like a good medical assistant? Do urinalysis results from common analyzers flow seamlessly into charts to reduce data entry? Does the system capture structured data, not just text, that you can analyze for both patients and practice? Does it help you monitor diseases longitudinally and link treatments to outcomes? 

Legal. Do you need to print, scan and file consent forms, or is that process electronic? Can patients sign forms with a finger on an iPad, and are they saved directly to charts? 

Regulatory. Does the EHR system work with value-based care — MACRA and MIPS — and collect MIPS data automatically while you document? Does it benchmark your E/M code utilization against CMS data and tell you how it compares with peers

Patient care. Does the software have built-in urology content and protocols, including suggested notes and codes? Does it show patient history on a single screen and help you spot trends? Can exams be documented with a few taps on an iPad while facing patients, before you both leave the room? Does it help you create notes, requests, prescriptions and educational materials? 

The attention of private equity may now be turning to urology, where 52% of US urologists were still in private practice as of 2021.

Private equity can unlock new opportunities 

For urologists, private equity partnerships may be able to preserve clinical control while enabling asset appreciation and providing liquidity when it’s time to exit. Part of the attraction is that proceeds may be taxed as capital gains rather than ordinary income. A complete financial equation could include upfront capital, the value of investing proceeds, and rollover equity in a subsequent transaction.2 

Private equity funds are often structured as limited partnerships with the firm as general partner and the physician investors as limited partners. General partners sometimes identify practices that have growth potential, invest in them, and work to increase their value. Beyond infusing capital, general partners sometimes serve as advisors to streamline operations, develop leadership, and identify avenues for growth.2 

Illustration of a check Interest in healthcare likely emerges from its resilience through economic cycles, its prospects for growth as the population ages, and its potential for higher value. According to Bain & Company, $151 billion was invested in healthcare worldwide by private equity funds during 2021 — up 91% from the $79 billion invested in 2019. The average value also rose dramatically, mainly due to five megadeals.3 

The attention of private equity may now be turning toward urology, where 52% of US urologists were still in private practice as of 2021, according to the annual AUA census.1

Any potential investment from private equity is likely to involve due diligence by the potential investor. The practice owner should do the same. Here are some good places to start:2 

Alumni. Ask to speak with other practices in the portfolio for insights.
Value. Ask about commitment, support, and overall contribution.
Professional. Check with associations for checklists and forums.
Experts. Consult with outside counsel and financial advisors.
Help. Consider an investment bank to help manage negotiations. 

Practices leverage technology to prepare for equity 

By integrating clinical and business systems, automating processes to reduce labor, facilitating payments and reimbursements, and enhancing data transparency, the right practice management, revenue cycle management, payment and other productivity tools can help your practice prepare for a future private equity partnership while enhancing current operations. When evaluating software, ask these important questions: 

Woman at home schedules herself via browser. Management. How does the software streamline check-in, checkout, scheduling and document management? Does it generate real-time estimates for out-of-pocket charges? Does it track quotes and conversions? Does it build patient loyalty with engagement tools like self-scheduling, telehealth and surveys? 

Payments. How does the system handle patient payments? Does it provide options like patient portal payments, office kiosk payments, text to pay, payment plans, “cards on file”* and autopay? Do payments sync automatically to patient accounts? 

Revenue Cycle Management. How does the software communicate patient balances and help you file reimbursement claims and handle denials? Does it keep up with payers’ myriad billing regulations? Can you get outside billing help if needed? 

Analytics. Does the system help you measure business health with comprehensive reports and analytical tools? Does it bring clinical, financial and operational data together for real insights? Does it track outbound referrals to identify services worth bringing in house? Does it find patients lost to follow-up? 

Whether you choose to remain independent or pursue a private equity partnership, a modern cloud-based solution such as ModMed® Urology — with EHR, Practice Management, Analytics and other productivity tools integrated all in one — can set you up for success.

See how ModMed Urology can help you succeed, whichever path you choose


1. “Table 4-3. Number of Practicing Urologists per Practice (By Practice Setting),” The State of the Urology Workforce and Practice in the United States 2021, American Urological Association (2022 April 22) pg 40.

2. Gary M. Kirsh and Deepak A. Kapoor, “Private Equity and Urology: An Emerging Model for Independent Practice,” Urologic Clinics of North America (2021 May) Vol. 48, Issue 2, pp 233–44. 

3. Nirad Jain, Kara Murphy, et al., “Global Healthcare Private Equity and M&A Report 2022,” Bain & Company report (2022) pg 1. 

* Card numbers are never stored by ModMed Pay. 

This blog is intended for informational purposes only and does not constitute legal or medical advice. Please consult with your legal counsel and other qualified advisors to ensure compliance with applicable laws, regulations and standards. 

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