Have you Considered Selling or Merging Your Practice?
Frequently Asked Questions
1. Why can’t my current CPA do this for me?
Most local CPAs are just not familiar enough with medical practices or the particular techniques that they require to perform a reasonable valuation. We are constantly training and staying up to date on the many laws and regulations that affect medical practices. These include Stark laws, anti-kickback provisions, and the corporate practice of medicine laws that many states follow. Also, many local CPA firms miss the fact that some practices have great intangible value aside from goodwill. Missing those intangibles can potentially cost you a great deal of money.
2. How long does the valuation take?
The bulk of the time is spent gathering the required information to prepare the valuation. Once we have obtained all the requested information from the practice, the valuation usually takes 15-20 business days.
3. No one pays for goodwill, so what is the purpose of the valuation?
This is a very common misconception. While some acquirers are reluctant to pay for “goodwill,” many in fact are willing to do so. In addition, there are many intangibles in a practice aside from goodwill including going concern value, value for staff in place, medical records, websites and others.
4. Why is merger and acquisition activity picking up now?
Hospitals are in the midst of acquiring other facilities in an effort to create consolidated health system networks in their local markets in order to capture market share. In order to deliver the breadth and depth of healthcare services necessary to be most competitive, they must secure their supply of primary care and specialty service providers. Many health systems, therefore, are choosing to acquire and employ physicians to lock in that supply of providers. At the same time, private practices are facing declining reimbursements and rising operating expenses. Many see consolidation as a good way to achieve operating economies of scale, and improve their bargaining power to negotiate more favorable managed care contracts.
5. Why is DoctorsManagement best qualified to represent my interests in evaluating a potential partner or purchase offer?
DoctorsManagement has more than 56 years of serving as business advisor to thousands of physicians and hospitals across the nation. With its team a seasoned business consultants, JDs, MBAs, CPAs, and Certified Valuation Analysts, DM can help establish a value of your practice, negotiate favorable terms of the transaction, protect your staff, evaluate the “cultural” compatibility and financial stability of the potential partner, and assist you every step of the way through the transition of ownership. Practice Management consulting is our primary business, and you can truly “leave the business of medicine to us” with confidence!
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