Hot Topics in Healthcare Valuation


Published on

This presentation discusses hot topics in Healthcare Valuation.

Learn more at

Published in: Health & Medicine
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Hot Topics in Healthcare Valuation

  1. 1. Hot Topics in Healthcare Valuation PRESENTED BY: Dave Thompson, Managing Director Kevin Walker, Managing Director
  2. 2. • National scale and resources with local presence – 5,200 associates – 19 major markets – 140 offices in 36 states • 72 MMP offices About CBIZ
  3. 3. • CBIZ is one of the nation’s largest… – Accounting providers, as ranked by Accounting Today – Benefit Specialists, as ranked by Business Insurance – Brokers of business insurance, as ranked by Business Insurance – Valuation companies About CBIZ
  4. 4. CBIZ Healthcare Valuation Depth of Services • Allocation of purchase price studies • Annual cyclical insurance appraisals • Breach of contract • Certificate of need • Compensation modeling • Fair market value rent analysis • Fair market value under Stark Law • Insurance valuation for risk management purposes • Joint venture/leasing arrangements • Litigation support/dispute resolution • Management service agreements • Mergers, acquisitions & joint ventures • Physician compensation – Call, medical director, stipends, clinical services • Property records & reconciliation • Purchase price analysis • Real estate valuation – (hospitals, MOBs, ASCs, etc) • Reimbursement analysis • Shareholder disputes • Shareholder litigation – Fraud; breach of fiduciary duty in the agreement to buy/sell
  5. 5. • Business Valuation and Fair Market Value Analysis • Litigation support • Hospital Physician Alignment Strategies • Physician Joint Ventures and Employment Models • Compliance, Billing and Coding Reviews and Education • Due Diligence Reviews – Physician and Specialty Hospital Transactions • Medical Staff Development • Attestation on Projections for Joint Venture Offerings CBIZ Healthcare Division Services
  6. 6. About Our Professionals – Dave Thompson • Development of physician compensation formulas, incentive plans, contractual agreements and conflict resolution • Valuation of physician practices • Valuation of clinical co management agreements • Valuation of joint venture entities such as imaging centers, surgery centers etc. Dave Thompson is a Managing Director of the Healthcare Division of CBIZ MHM. He provides consulting services to physician practices, hospitals and other healthcare providers as they develop strategies for changes taking place in this volatile healthcare marketplace.
  7. 7. About Our Professionals – Kevin Walker • Development of physician compensation formulas, incentive plans, contractual agreements and conflict resolution • Valuation of physician practices • Valuation of clinical co management agreements • Valuation of joint venture entities such as imaging centers, surgery centers etc. Kevin Walker has over 25 years of experience in healthcare finance and consulting. He spent six years with a major public accounting firm auditing healthcare entities, twelve years working in operations, administration, accounting and finance roles for large physician practices and now focuses much of his time on valuation of medical practices, the evaluation and development of physician compensation and incentive plans, and consultation to health systems who are integrated or look to integrate with and/or employ physicians. Kevin also consults with physicians regarding practice mergers, health system integration and transition planning.
  8. 8. General Overview – Business Valuation & Compensation Valuation • Rev Ruling 59-60 • General Market Value • Stark • Anti Kickback • IRS – Tax Exempt Status Fair Market Value “Not been determined by any manner that takes into account volume or value of anticipated or actual referrals”
  9. 9. General Overview – Business Valuation & Compensation Valuation • Not explicitly defined • An arrangement is generally considered commercially reasonable if it is a sensible, prudent business arrangement from the perspective of the parties involved, even in the absence of potential referrals. Commercial Reasonableness
  10. 10. General Overview – Business Valuation & Compensation Valuation • Understand what we are valuing • Consider – Income – sum of present value of expected future benefits – Market – comparison to what is actually being paid in the market place – Asset (cost) approach – value of underlying assets or resources High Level Requirements:
  11. 11. • Market Approach – Results in practice incurring a loss when applied using income approach – How is difference reconciled? – How does attorney know which value can be relied on? • The Seller (physician practice) – Recognizes hospital will realize substantial upside when converts to ancillary profits to provider based billing and wants that considered in the valuation Common Issues – Appraisers & Attorneys
  12. 12. • Can value be assigned to intangible assets if the discounted cash flow method results in a value of zero? – Workforce – Charts • Can future ancillary business be considered in the cash flows when considering the Discounted Cash Flow method of determining FMV? Common Issues – Appraisers & Attorneys
  13. 13. • Can Business Valuation be determined on an income approach and the Compensation be determined using the Market Approach? • Impact of Stacking on a FMV analysis • Understanding the proper use of Market Data – Should you use local, regional or national data? Common Issues – Appraisers & Attorneys
  14. 14. FMV & Commercial Reasonableness • Considers that all business transactions must aid organizations in accomplishing their strategic, operational and/or financial objectives • Considers the aggregate terms of the overall arrangements and asks the question: “Does this deal make sense”? Commercial Reasonableness
  15. 15. • Commercial reasonableness assesses the overall management, including qualitative considerations such as strategy and operations • Fair market value primarily assesses the financial aspects of the arrangements (range of dollars only) Summary
  16. 16. • Management • Outside Valuator • Attorney Responsibility of the Parties
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.