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Physician Practice Valuation: What You Need to Know
By: Nick Hernandez, MBA, FACHE
The methodologies for conducting physician practice valuations of different practices may vary but the basic principles reviewed here are the same.
Have you ever wondered what your practice looks like to physicians looking to join or to potential acquirers? If you had to look at a number of physician practices and determine which practice has the best prospects for the future, would you pick it? Although the methodologies for conducting physician practice valuations of different-sized practices vary, the principles are the same.
When outsiders evaluate your practice for acquisition, one key element they consider is potential synergies between the practices. The value proposition may be greater when practices combine because of one or more of the following considerations:
- increased market strength
- cost advantages
- complementary services
- increased service offerings
- extended geographic range
Characteristics of an attractive practice
The value proposition depends on whether you are an investor, acquirer, or employee. Some characteristics of an attractive practice include
