Getzler Henrich (“GH”) was retained by a large East Coast multi-specialty physician practice group with annual revenues exceeding $1.7 billion. With over 900 physicians in nearly 30 locations covering more than 50 specialties, the company provides healthcare services to over 20% of the population in their market. As declining operating performance placed the company in a long-term covenant default, the senior lenders introduced GH to the company to evaluate the current business strategy. To further complicate matters, external factors required that the engagement be completed on an extremely tight schedule, with less than five weeks from start to finish.
Our in-depth review included analysis of the company’s budget and projections, the organization’s cost structure, key operating assumptions and performance drivers, segmented revenue components and profitability by payer contract and business unit, and expense by discrete reporting category. Our professionals interviewed management and key decision makers, evaluated company performance initiatives and dashboards, and identified risks associated with meeting profitability objectives. Embedded within this evaluation process was the development of a highly-granular financial model designed to perform scenario analyses and sensitivity analyses to better understand and illustrate the challenges facing the business. Throughout the process, GH’s team worked closely with management to reduce cost and eliminate duplicative work, delivering high quality work at minimal additional cost to the client. During the engagement, it became clear that a broad balance sheet restructuring would be required to alleviate the company’s mounting pressures, as well as significant operational changes. GH’s team was able to outline a global restructuring plan which leveraged unutilized assets to generate cash, reduce debt, and fund future operations without a significant detrimental effect to the operating budget.
GH’s findings were compiled in a comprehensive report to management and lenders, providing a review of the current business plan, an assessment of turnaround feasibility, as well as strategic and operational recommendations for management, and a roadmap to a global restructuring and refinancing for creditors. Following the report presentation, the company was able to achieve its goal of securing the required agreements from lenders within the limited work period.