To determine the appropriate multiple of EBITDA in a healthcare transaction, parties must consider the size of the organization being acquired.
Veralon’s Rich Chasinoff and Karin Chernoff Kaplan explain how practice lease arrangements between hospitals and physicians are a way to achieve alignment without a change in ownership.
Nearly every health care business transaction must be based on some measure of fair market value (FMV). Although the attorney’s role in the preparation of a valuation to support a transaction is limited, most attorneys recognize the need to critically evaluate the opinions they and their clients obtain from valuation experts. Attorneys assist in setting expectations, and helping clients understand why their “back of the envelope” valuation may be unrealistic. This article answers questions that lawyers and their clients commonly ask during the business valuation process.
Karin Chernoff Kaplan writes that successful design of and transition to a new compensation model requires careful selection of the physician participants and subsequent training for those who will be involved.
Health systems continue to employ increasing numbers of physicians. By maintaining a stable pool of physicians, they hope to be able to respond to cost-of-care and quality initiatives under new payment models. We are often asked, “What is the ideal length of the employment term?” If there is a competitive environment for recruiting physicians […]
In the past decade, emergency departments (EDs) became the front door to health care for a sizable number of Americans. The trend is well known. A recent report by the RAND Corporation points to research findings indicating that utilization of hospital EDs grew almost double the rate of U.S. population growth between 2001 and […]
In evaluating the fair market value (FMV) of healthcare entities, we often are asked why we do not adjust the revenue stream of the business being evaluated to reflect the payment rates of the potential buyer. The answer is based on the Stark and Anti-Kickback statutes, and in the difference between FMV and strategic […]
Many hospitals, physician groups, and consultants use published physician compensation surveys as one way to set compensation levels and limits and ensure that compensation is within fair market value. Although the data in these published surveys can be valuable, these data also, unfortunately, are easy to misapply, resulting in compensation that does not meet fair […]
The transformation to a value-based healthcare system is underway, as is the spread of programs that pay physicians for improving the quality of care. Whether called value-based payment, paying for quality, or pay-for-performance, such programs are becoming a more significant aspect of compensation for employed physicians and in co-management agreements—but they are not always used […]
Providers and valuators often are tasked with determining the fair market value (FMV) of employee compensation arrangements. Although each arrangement has unique issues, most valuation processes start by looking at quantitative measures. Creating a buttoned-up analysis supported by published benchmarks is relatively simple. However, qualitative factors also influence compensation FMV. The Quantitative Standard Using […]