Ophthalmologic Surgery Center for Sale

Selling ophthalmology practice and surgery center in Florida display annual gross revenue of ~$780,000. Solo ophthalmology practice mainly serving adult and elderly patients. High percentage are followed for glaucoma-related conditions. Services provided include office consultations, Cataract, Glaucoma, SLT, and Oculoplastics. The ambulatory surgery center included in the practice is licensed by the State of Florida, and accredited by AAAHC and Medicare.Payor mix is mostly Medicare (80%) with smaller proportion of PPO (18%) and Cash (2%). Approximately ≈ 4,000 patient visits over the last 12 months. Referring sources include other Physicians, Patients, Directories, HMO & PPO Panels. Current number of providers includes 1 Ophthalmologist, 2 nurses, 2 Front Office staff, 1 part-time Ophthalmic Tech, and 1 part-time scrub tech. Extended transition assistance available to new physician buyer. Ophthalmology practice appraisal is also available.

Book Review: Guide to Healthcare Valuation (2010 Edition)

I am currently reading the Guide to Healthcare Valuation (2010 Edition), published by Business Valuation Resources (BVR) and the American Health Lawyer’s Association (AHLA). This is a great resource written by Dietrich and a number of other experienced authors. They cover a wide array of healthcare valuation topics and industry subsectors; it’s hard to find this collective wisdom all in one place. The book is thick…921 pages inclusive of appendices. A valuation book of this size typically means you’re in for a monster technical read, but this book is refreshingly different. There are plenty of practical insights and applications offered by multiple authors over diverse chapters. I was impressed by the 2009 edition of this book, which I would also recommend, and the 2010 edition clearly builds on the first issue in a major way. As I get through more of the book I’ll update this blog with reviews about specific topics and chapters. I’m especially looking forward to the chapters devoted to ambulatory surgery, dialysis, home health, and imaging. Stay tuned.

Using a medical practice appraisal

New article about the use of a medical practice appraisal
I've written a Q&A article about the application of a medical practice appraisal when involved in the purchase or sale of a medical practice. A clear approach and expectation when going through the valuation process can be of great assistance when negotiating a deal. You can find the article on our website.

What to consider when selecting a valuation professional for a medical practice appraisal.

Obtaining a professional opinion of the value of your medical practice can be helpful in a number of capacities. One major catalyst when it comes to obtaining a practice appraisal is a transaction or anticipated transition in the practice. This may involve buying or selling a practice, divorce, estate planning, medical practice financing, merger, consolidation, or other business combination. Various considerations come into play when seeking a qualified appraiser to value the practice. An appraiser should take into account the multiple valuation approaches per industry standards and accepted guidelines, in addition to providing a competent application of these principles given the subject practice. Medical practice appraisers should use a number accepted methodologies suggested by the IRS, The Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice, and standards of appraisal for medical practice valuation. Equally important is the value judgment when it comes to gauging the risk factors and growth rates applicable to the subject practice, the medical specialty, and industry as a whole. A good medical practice appraiser will use correct assumptions of growth in the specific specialty and region, and will know how practice value is affected by supply and demand side factors, reimbursements, and structural changes to health systems. The valuation of medical practices can be confusing and fraught with conflicting information, especially when it comes to using appraised value for selling and buying practices. The key to selecting a good practice appraiser is working with one who understands these dynamics yet can provide a valuation at arms-length. The appraiser should be keenly familiar with the medical practice focus, as general business appraisal principals can be grossly inaccurate when they aren’t nuanced for the specific nature of the practice environment. Obtaining a practice valuation opinion is the first step in understanding what the practice may be worth and can be very helpful in structuring deals for outright sales, buy-ins, buy-outs, mergers, and consolidations. Having an informed basis makes it easier to justify value and price points to ultimately achieve the given transition objective.

Medical practice appraisal, valuation, sales, financing, and practice evaluation.

The problem with "Rules of Thumb" in Valuation and Asking Price Determination of Healthcare Professional Practices

The business valuation of healthcare professional practices is a widely discussed and contentiously debated topic among business appraisers, healthcare business consultants, accountants, brokers, lenders, buyers, sellers, and various other involved parties. This is attributable to a combination of competing interests and general confusion when it comes to valuation and asking price determination. This phenomenon is not uncommon in a field where seemingly innumerable variables exist in wholly different practice settings which can render even the best approach to valuation ineffective. With the inherent difficulty in accurately assessing the value of a healthcare practice and determining an appropriate price point which reflects market reality, the use of a "rule of thumb" as a substitute for due diligence can be severely problematic. Using an easily applied method in the absence of comprehensive data and analysis comes from the desire to simplify and compartmentalize complex ideas into bite-sized pieces. Rules of thumb are commonly seen as generalized ratios of earnings, price, overhead, financials data, or other key practice statistics. While potentially accurate over a large swath of aggregate data, the low volume nature of comparable healthcare practice transactions makes these rules of questionable effectiveness. In the hands of unknowlegable parties, they can be highly inaccurate and especially problematic when misapplied across different health fields (Valuing an optometry practice with a ratio used for medical practices is a common such example). No ratios or rules can encompass the intricacies of multiple healthcare disciplines, specialties, market factors, geographic locations, valuation purposes, size/scope of potential buyer pools, economies of scale, or purchase price allocation. With the difficulty in accurately and rapidly determining practice value, it is understandable that buyers and sellers of practices can become frustrated and overwhelmed in the process. This can be resolved by hiring a professional who is aware of current trends and can assess a practice for the party's given purpose. This is the most crucial aspect to obtaining an accurate and relevant valuation that can be actually utilized to achieve a specific objective (business move, retirement, lifestyle change, divorce, etc....). Appraising a practice "in theory" without considering the moderating effets of true market dynamics is a waste of time.