This article focuses on the qualitative factors that affect valuation in ambulatory surgery centers (ASCs). Seven specific qualitative factors are discussed in detail.

After years or decades building your healthcare company/practice, it's increasingly likely that you will find yourself thinking about the prospects of selling your company. You should understand the key "value drivers" of your company.

For most owners of a healthcare business, their company or practice is their most valuable asset. Yet, most of these owners do not know the value of their company nor the key value drivers that attract buyers. This article discusses four of the key reasons why obtaining an appraisal (i.e. valuation) of their healthcare company is important.

A true story of the recent sale of a behavioral healthcare company from the initial valuation through creating value and closing the transaction.

Ever wondered why two seemingly similar companies sell at significantly different multiples? What are buyers considering in ostensibly comparable companies that cause sale price differences? Let's discuss five key secrets of market multiples.

Intriguingly, given the volatile healthcare industry, owners of a healthcare business/practice rarely seek to understand the value of their company unless they consider it a necessity, such as settling a shareholder/partner dispute, getting a divorce, or obtaining a bank loan. The problem with this way of thinking is that most owners of a healthcare business miss the opportunity to better understand the value of their company, how to strategically increase its value over time, and how to integrate a company/practice value with their personal financial planning.

Here are several key reasons why getting a valuation of your healthcare company might be the most important thing you do this year.

The measure of value for any healthcare company is obviously about results, financial and otherwise. It also refers to the clarity of presentation of value and, as Berman, Knight, and Case write in Financial Intelligence, “the art of using limited data to come as close as possible to an accurate description of how well a company is performing.” When “accurate” becomes “cloudy,” it usually translates into questions and doubt, whether for a funding source, buyer or a potential investor.

Here are some reasons why the quality of your financials is so important.

As we indicated in our recent article, “What’s The Value Of Your Independent Pharmacy (Part 1)?,” the market for independent pharmacies continues a very dynamic run. Private equity, strategic consolidators, and other investors are looking to add scale and locations, whether special needs/long-term care (LTC), retail, home infusion, compounding, nuclear, or hospice pharmacy.

Numerous factors have contributed to the strength of the “perfect storm” in the pharmacy marketplace and include...

Today, there are over 22,000 independent pharmacies out of a total of over 61,000 pharmacies nationwide. In addition, independent pharmacies drive over $73 billion of industry revenue with all signs pointing to continued growth. Customer demand is driven by our aging population, new forms of insurance reimbursement, increased awareness of health issues, advances in medical treatments, and longer lifespans. In the latter case, more and more people are seeking the very products and services that independent pharmacies provide.

Most owners of Durable Medical Equipment (DME) companies regularly attempt to estimate the value of their company. Unfortunately, their estimates can significantly differ from the marketplace “reality,” depending on a number of factors. “All healthcare related companies sell for 2 times annual revenue”, or “My DME should be worth the sum of all of the monies I invested into the company,” or “I wouldn’t consider selling my DME for less than 10 times annual profits” are common refrains among owners who may be in for a rude awakening when they attempt to sell their company.

The Substance Use Disorder (SUD) marketplace is dynamic and continues to be impacted by many factors. The valuation of SUD programs is also subject to change, ranging from in-network vs. out-of-network reimbursement and in-house labs to the increasing focus on outpatient services and longer-term social support. We can expect more flux that will affect how SUD companies are valued.

Healthcare business owners rarely seek a valuation for their company unless they consider it a necessity. They will get a valuation because they must settle a shareholder/partner dispute, it’s required to resolve a divorce, or it’s essential to obtain a loan or line of credit (LOC). The problem with this way of thinking is that most healthcare business owners miss the opportunity to better understand the value of their company, how to strategically increase value over time, and how to integrate a valuation with longer-term personal planning.

Here are several key reasons why securing a valuation of your healthcare company might be the most important thing you do this year.