Navigating Healthcare Transactions

Interview with Jim Freund

By Tatum Rauch

Managing Partner and Founder of Physician Transaction Advisors

SAPIENT: “What is the story behind you entering the healthcare transaction space and founding Physicians Transaction Advisors”

JIM FREUND: “We started the first software company in the surgery center space nearly 40 years ago. It was initially designed to support a medical office buildings that housed an ASC, and we expanded it into the largest technology management firm in the field. Along the way, I developed strong relationships with many physicians who built their own ASCs. As these physicians sought ways to monetize their investments, they often found the outcomes disappointing when selling stakes in their businesses. I later joined my former partner at ASCs Inc. with the mission of helping physician-owners fully evaluate their strategic partnership options and negotiate the best possible pricing and terms. It has been incredibly rewarding to assist physicians in realizing the value of what they’ve built over their careers and ensuring they reap the benefits of their hard work.”

SAPIENT: “Where do you think most physicians go wrong when they are contemplating a sale?”

JIM FREUND: “Over the years, the most common mistakes physicians make are, first, waiting too long to seek a strategic partner, and second, failing to align on long-term goals with their partners. Too often, we reconnect with physicians years after our initial conversations, only to find they are nearing retirement without a plan to transition leadership to younger doctors and no clear path for the future success of the organization. Setting clear goals is essential for every group. They need to understand what it will take to remain successful, how they will collaborate to achieve those goals, and whether engaging a strategic partner could provide valuable support. The sooner physicians begin this process, the more options they have—whether or not they choose to pursue a transaction right away, they should have a clear roadmap for growth and sustainability.”

SAPIENT: “How has the market changed since you became involved in the transaction space?”

JIM FREUND: “When I started, the primary activity in the space involved ASC owners seeking liquidity events and surgery center consolidators expanding their networks. Aside from the short-lived trend of rolling up practices over a decade ago, the focus was narrow. However, we’ve since seen a seismic shift toward outpatient healthcare, driving a significant surge in investments from healthcare systems, corporations, private equity, and other investors looking to build physician networks. Specialty platforms, which initially emerged in fields like dermatology and ophthalmology, now span nearly every specialty—including GI, orthopedics, and urology—along with their ancillary services. This shift toward outpatient care has also been a major catalyst for new developments, with hospitals and physicians expanding their surgical networks to meet this growing demand. The migration of cases to the outpatient space is transforming the landscape, creating opportunities for physicians to retain clinical autonomy while accessing the resources they need to succeed in the long run.”

SAPIENT: “What advice would you give to a doctor or surgery center positioning itself for a liquidity event?”

JIM FREUND: “Make sure all partners are aligned on your goals and objectives. For more senior partners, this might involve preparing for a significant capital event, while younger physicians may be focused on finding a strategic partner that allows them to maintain autonomy and support future growth. Getting your house in order means carefully reviewing every aspect of your business. This involves understanding and showcasing your performance across business, clinical, and operational areas and clearly demonstrating what makes your organization an attractive partner. It can also be beneficial to present your practice on a go-forward or pro forma basis, highlighting future potential. Buyers want to see not only current success but also long-term opportunities for growth and sustainability.”

SAPIENT: “How has private equity influenced the healthcare transaction space?”

JIM FREUND: “Private equity should be viewed as a vehicle for funding the development of healthcare platforms. When a private equity group can bring together strong, independent practices and form a high-performing leadership team, it creates an opportunity for physicians to retain their clinical autonomy while benefiting from enhanced patient care, lower delivery costs, and improved operational efficiency. In this way, private equity can offer independent physicians a compelling partnership alternative—one that helps them better compete in a challenging environment while maintaining the values that matter most to them.”

SAPIENT: “In your opinion, which areas within the for- profit medical sector present the greatest potential for growth?”

JIM FREUND: “Any area of healthcare that focuses on outpatient care, along with new technologies that enhance patient outcomes, is poised for significant growth beyond the walls of hospitals. Delivering high-quality care in more convenient, cost-effective settings is essential to meaningfully reducing healthcare costs, and this will remain a key focus moving forward. We’ve already seen this shift in specialties like ophthalmology, GI, orthopedics, urology, ENT, pain management, and more recently, cardiology. As this trend continues, we can expect an even greater push toward surgery centers and outpatient facilities, transforming how care is delivered across the healthcare system.”

SAPIENT: “Have you noticed a difference in the value of surgery centers that have management company partners?”

JIM FREUND: “Over the past 25 years, we have been involved in more than 300 transactions, most of them with surgery centers. Just as with private equity platforms, some partners are exceptional, some are good, others are marginal, and a few simply don’t perform well. The success of a surgery center often hinges on finding the right partner whose strengths align with the center’s needs. This is why we always emphasize the importance of running a thorough process that allows physicians to fully understand the value a potential partner can bring. A good partner may assist with transitioning the center, physician recruitment, cost reduction, efficiency improvements, contracting, or any number of factors critical to creating a successful center and partnership. The most successful outcomes come from physicians who take the time to carefully evaluate their options, finding the best partner at the right price and on the right terms to help them achieve long-term success.”