One of the more interesting developments in the ever-shifting dynamics of the health care marketplace is the increasing interest on the part of private investors in developing financial relationships with or even purchasing equity interests in physician practices. For generations, medical practices were mostly small and mostly owned by the physician shareholders who treated their patients at the practices. As the health care marketplace has gravitated to new payment methods and different models of delivering care, there have been more consolidations of physicians into larger medical practices. Depending upon the medical specialty, these large medical practices can be very profitable, hence the interest of private investors in establishing a financial relationship with a practice.

While ownership by nonphysicians of interests in medical practices is legal in a few states, it is still strictly prohibited in New York. Nonphysician investors can invest in business entities that support the nonmedical aspects of a practice, but a medical practice located in New York must at all times be under the ownership and control of physicians licensed to practice medicine in New York.

Corporate Practice

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