Selling a medical practice is one of the most consequential financial decisions a physician will ever make, and many start the process far later than they should. In this episode, Medical Economics Managing Editor Todd Shryock speaks with Kevin Baker, director of business development at Emergency Care Partners, about how practice owners can prepare for a sale or succession years before they actually need to.

Baker breaks down the most common mistakes sellers make, the factors that drive a practice's valuation, the financial and legal documents to have in order before approaching a buyer and how selling to a hospital system, a private equity-backed strategic partner or a junior partner each changes the outcome. He also digs into the parts of a transaction physicians tend to underestimate: the tax implications of deal structure, the emotional weight of handing off a practice that represents their life's work and how to protect staff and clinical quality through the transition.

Music Credits:
Jazz Warm Lo-Fi by Nadezhda Pilitskaia - stock.adobe.com
A Textbook Example by Skip Peck - stock.adobe.com

Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 – 0:23 | Sponsor message Copic medical liability insurance.

0:23 – 0:46 | Cold open Baker sets up the episode's central message: good decisions are rarely made under pressure, and failing to prepare is preparing to fail.

0:46 – 1:39 | Introduction Austin Littrell introduces the episode and guest, previewing how physicians can prepare to sell their practice and plan for succession long before they actually need to.

1:39 – 3:49 | The biggest mistakes sellers make Todd Shryock opens the conversation, and Baker points to four recurring errors: not lining up experienced advisors early, waiting too long to prepare, keeping financials that satisfy the IRS but not a buyer and fixating on the headline price instead of deal structure.

3:49 – 6:08 | How far in advance to start Baker argues the best transactions are intentional and begin years ahead, framed around one question: what would need to be true for the practice to thrive if you stepped away in three to five years?

6:08 – 8:04 | What drives valuation Value comes down to financial performance, risk profile and growth potential. Baker explains how EBITDA anchors the starting point and which risks can drag a number down, from hospital subsidy reliance and locums dependence to ED contract renewals and payer mix.

8:04 – 10:21 | Getting your documents in order Before approaching a buyer, Baker says practices should understand the tax implications of their legal entity structure, clean up the cap table, document partner buyout arrangements and begin assembling a data room of vendor contracts and payer agreements.

10:21 – 13:22 | Hospital, strategic buyer or your partners Baker compares the three paths: partner buyouts that pay out slowly and modestly, hospital deals that often open with teaser compensation before dropping to productivity-based pay and strategic acquirers who can pay more by realizing synergies and offering equity.

13:22 – 16:14 | Staff, patients and the identity transition Baker addresses the emotional side physicians tend to underestimate, urging sellers to define what success means beyond the closing table and to be wary of any buyer who doesn't put clinical quality and staff first.

16:14 – 17:05 | P2 Management Minute Keith Reynolds shares practice management tips and invites listeners to submit their own workflow ideas.

17:05 – 19:24 | How open to be with your staff Discretion matters early in the process. Baker suggests routing buyer requests through a third-party CPA or advisor where possible, and having a candid one-on-one with a key operations or finance leader when documents and data are needed.

19:24 – 22:40 | Tax implications and deal structure With a "consult your tax advisor" disclaimer, Baker walks through the value of taking equity in the acquiring company, the difference between ordinary income and long-term capital gains treatment and the net present value advantage of receiving several years of earnings up front.

22:40 – 24:19 | Staying on part time after a sale For physicians who want to keep practicing, Baker's advice is to communicate it upfront, make sure there are enough physicians on the schedule to absorb the hours and understand how moving from full time to part time affects benefits.

24:19 – 25:22 | Final advice and close Baker's closing message: start the conversations now, since signing an NDA opens the door to information without committing you to a deal. Todd Shryock thanks Baker.

25:22 – End | Outro Austin Littrell thanks the guest and wraps the episode.

S1 Ep160: How to sell your practice, with Kevin Baker of Emergency Care Partners

Off the Chart: A Business of Medicine Podcast

S1 Ep160: How to sell your practice, with Kevin Baker of Emergency Care Partners