Medical Practice Purchase Guide
Business Acquisition Guide - Australia
This guide outlines the key considerations for purchasing a medical practice in Australia, including regulatory requirements, patient records management, and practitioner arrangements.
Purchasing a medical practice requires careful navigation of healthcare regulations, patient privacy obligations, and professional registration requirements. Unlike other businesses, medical practices involve the transfer of sensitive patient relationships and records.
Key regulatory bodies include the Australian Health Practitioner Regulation Agency (AHPRA), Medicare Australia, and applicable state health departments.
Key Points
- • Medicare provider numbers are personal to individual practitioners
- • Practice accreditation may need to be transferred or renewed
- • Patient records require careful handling under Privacy Act
- • Goodwill protection through vendor restraints is essential
Goodwill Protection
- Vendor restraint of trade clause
- Non-compete radius and duration (typically 5km, 3-5 years)
- Non-solicitation of patients clause
- Transition support period from selling practitioners
- Patient introduction arrangements
- Goodwill protection mechanisms in contract
Patient Communication
- Patient notification letter strategy
- Timing of ownership change announcement
- Practice name retention or change
- Website and online presence transition
- Phone number and contact retention
- Recall system and ongoing care plans
Valuation Considerations
- Active patient base size and demographics
- Patient retention rates historically
- Average consultations per patient per year
- Chronic disease management patients (CDM revenue)
- Goodwill multiple applied (typically 0.5-1.5x revenue)
- Location desirability and competition
Goodwill Retention
Consider structuring part of the purchase price as an earn-out based on patient retention over 12-24 months post-settlement. This aligns vendor incentives with successful transition.
Pre-Settlement Checklist
- Lease assignment executed
- Provider number applications lodged for new practitioners
- Practice accreditation notification submitted
- Medicare practice registration updated
- Staff transition arrangements confirmed
- Insurance policies in place (professional indemnity, public liability)
- Practice management software licenses transferred
- Patient notification letters prepared
Settlement Day
- Final walkthrough and equipment verification
- Handover of keys, codes, and access cards
- Patient records handover and access verification
- Drug register handover (Schedule 8)
- Staff introductions and handover meetings
- IT system access and password handover
- Supplier and contractor notifications
Post-Settlement
- Send patient notification letters
- Update AHPRA principal place of practice
- Complete Medicare provider location updates
- Notify accreditation body of ownership change
- Update business registrations (ABN, business name)
- Transfer utility and service accounts
- Update online directories and HotDoc/HealthEngine
- Implement transition support from selling practitioner