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Asset Values: What Not to Overlook in a Medical Practice Valuation
Darcy Devine • April 29, 2016
I came across this picture of a typewriter on Facebook the other day. It had the following caption:
Does anyone else have this in their law firm or place of business? This is ridiculous. And my parents won't let me donate it or throw it away.
#oldschool
I laughed because these old typewriters are in a lot of the medical practices I value. I also laughed because I would never dream of leaving a typewriter like this out of a fixed asset appraisal.
To the multi-million dollar health system buying a medical practice, this typewriter isn't a crucial asset. However to Dr. Bob or Dr. Susan who started the practice 25 or 30 years ago, it is a symbol of hard work. Including it in the fixed asset list, and giving it a proper appraisal, shows in a small way that the buyer appreciates the sweat equity that built the practice. Not to mention - these things still get used quite a bit.
I was pleased to read through the comments on the Facebook post and see that someone else had already schooled the poster with this:
That's not just a typewriter. That's an IBM Selectric. That machine is how work got done - every office in America had them or wanted them. Fantastic machine. Probably worth $200, depending on condition. A good secretary could do 75 words per minute on it. You won't need it often, but when you do, nothing else will do.
Exactly!
See our asset appraisal page at www.buckheadfmv.com
We ranked the 30 largest healthcare services and information technology deals of 2018, according to our database, by valuation multiple. The lowest reported price to EBITDA multiples (10x or lower, sorted alphabetically) are listed below.
We ranked the 30 largest healthcare services and information technology deals of 2018, according to our database, by valuation multiple.
We ranked the 30 largest healthcare services and information technology deals of 2018, according to our database, by valuation multiple. The highest reported price to EBITDA multiples (15x or higher, sorted alphabetically) were as follows:
Healthcare services organizations rely on a variety of intangible assets to create business value, including patient and customer relationships, medical records, trade names, assembled workforce, licenses and certifications, non-compete clauses, proprietary technology, software, and others.
For those of you who’ve been involved in a transaction where the only asset transferred is a certificate of need, you’ve probably found that market data is scarce for CON-only deals.
CON Laws, Scope of Practice Restrictions, and Provider Non-Compete Clauses Targeted in New Trump Adm
On Monday, December 3, 2018, the Department of Health and Human Services (HHS) – in collaboration with the Departments of the Treasury and Labor, the Federal Trade Commission, and several offices within the White House – released a report detailing recommendations for improving choice and competition in the healthcare industry.
One of the questions we get asked a lot is how valuations have changed over time.
One of the many benefits of tracking healthcare transactions closely and maintaining a very large database of deals where we can get reliable price to EBITDA and revenue multiples is that it provides insight into profit margins for segments where other financial benchmarking information is sparse.
The most important component of a valuation of an accountable care organization (or other multi-provider network that relies on risk-based shared savings models) is the revenue forecast, which involves “probability-adjusting” future shared savings payments in some manner.
CMS' offers a helpful online tool that shows provider market saturation levels at the national-, state-, and county-levels for the following health services:
