Here are 10 stories on ASC transaction and valuation, featuring expert opinions, trends and practical guidance.
1. 9 Points on Transactions and Valuations of ASCs With Kevin McDonough of VMG Health — Ever since the emergence of the first ASCs almost 30 years ago, the ASC market has changed and matured at a rapid pace. Compounding the maturing market are changes emerging as a result of heightened uncertainty stemming from healthcare reform and an unstable economy. In this story, Kevin McDonough, senior manager at the Dallas office of VMG Health, makes nine points on trends in transactions and valuations of ambulatory surgery centers.
2. How Does a Physician Buying ASC Shares Determine Fair Market Value for the ASC Shares: Q&A With Scott Becker — Scott Becker, JD, CPA, explains how a physician wanting to purchase ASC shares can determine fair market value. In this story, he outlines three core methods of valuing an ASC, which are the income or discounted cash flow approach, market approach and replacement or cost approach.
3. Best Time to Bring in a Hospital Partner for Your ASC: Q&A With Jon Vick of ASCs Inc. — Jon Vick, president of ASCs Inc., which advises surgery center owners on strategic partnering and joint ventures, explains the best time for an ASC to bring in a hospital partner. He explains ASCs looking to partner with hospitals must already be operating at a highly profitable level. The prospective hospital must also be willing to work cooperatively with the ASC on a number of issues as well as demonstrate how the partnership will be fruitful for the ASC.
4. 3 Current Trends Impacting ASC Transactions — Currently, the ASC industry is in a tremendously dynamic climate. The economic downturn, healthcare reform and decreased reimbursements from Medicare are forcing ASCs to change the way they've traditionally approached and made business decisions, including transactions. ASCOA CEO Luke M. Lambert discusses three current trends impacting surgery center transactions.
5. 3 Factors That Can Increase the Value of ASCs to a Potential Corporate or Hospital Partner — Valuation is everything when it comes to ASCs looking to partner with a corporate entity or hospital, as it ultimately determines the ASCs level of attractiveness for acquisition. Jason L. Ruchaber, CFA, ASA, principal with HealthCare Appraisers, discusses three important factors an ASC should consider in order to increase its value when preparing for or considering a sale to a corporate or hospital partner.
6. Future of ASCs in Five Years: 10 Predictions on the Most Common Ownership Model — As of 2006, the most common ownership structure of an ASC was 100 percent physician-owned (61 percent of ASCs), followed by hospital/physician-owned (16 percent of ASCs) and corporation/physician-owned (11 percent of ASCs), according to data provided by VMG Health's 2009 Multi-Specialty ASC Intellimarker. With the healthcare reform law, payor issues, the decline in available physicians for recruitment and other challenges impacting the financial stability of ASCs, what will be the most common ASC ownership structure in five years — physician-owned, ASC, joint-venture ASC or HOPD? Here are 10 predictions.
7. 1 + 1 + 1 = 4: Making the Numbers Add Up for ASC Acquisitions — ASCs sometimes face the challenge of meeting projected outcomes, whether those outcomes are related to case volume, profitability or successful physician recruitment. Chris Bishop, partner and senior vice president of Blue Chip Surgical Center Partners, says the three keys to effective ASC turnarounds revolve around existing owner commitment to success, carefully selecting new owners with a proven track record of success and working with a strong management partner.
8. 3 Most Important ASC Specialties Resisting the Trend of Movement to Employment by Hospitals: A Quick Look at Orthopedics, Ophthalmology and Gastroenterology — The three most important specialties to ASCs are orthopedics, ophthalmology and gastroenterology, based on case volume and revenue statistics. Many of these specialties can still excel in group practice due in part to significant control over the generation of their own business. The specialties do however face both short- and long-term reimbursement challenges. Economic challenges are pushing many other specialties toward the security of hospital employment. This generally dissuades physicians from investing in and using ASCs. In this story, various industry leaders and professionals chime in on why these three specialties are resisting the trend of hospital employment.
9. How do ASCs Determine and Distribute Facility Profits Among Owners: Q&A With Scott Becker — Scott Becker, JD, CPA, discusses how ASCs traditionally distribute facility profits and in such a way that would not incur legal repercussions for their facilities.
10. 6 Common Complaints Physicians Have When Acquired by Hospitals — Even though physician group practices are acquired by hospitals for various reasons, mainly pertaining to increased financial stability and access to resources, these acquisitions may sometimes come with some sticky situations. Robert C. Bohlmann, principal of MGMA Health Care Consulting Group, advises hospitals on integrating group practices. Here he lists six common complaints physicians have when their practices are acquired by a hospital.
1. 9 Points on Transactions and Valuations of ASCs With Kevin McDonough of VMG Health — Ever since the emergence of the first ASCs almost 30 years ago, the ASC market has changed and matured at a rapid pace. Compounding the maturing market are changes emerging as a result of heightened uncertainty stemming from healthcare reform and an unstable economy. In this story, Kevin McDonough, senior manager at the Dallas office of VMG Health, makes nine points on trends in transactions and valuations of ambulatory surgery centers.
2. How Does a Physician Buying ASC Shares Determine Fair Market Value for the ASC Shares: Q&A With Scott Becker — Scott Becker, JD, CPA, explains how a physician wanting to purchase ASC shares can determine fair market value. In this story, he outlines three core methods of valuing an ASC, which are the income or discounted cash flow approach, market approach and replacement or cost approach.
3. Best Time to Bring in a Hospital Partner for Your ASC: Q&A With Jon Vick of ASCs Inc. — Jon Vick, president of ASCs Inc., which advises surgery center owners on strategic partnering and joint ventures, explains the best time for an ASC to bring in a hospital partner. He explains ASCs looking to partner with hospitals must already be operating at a highly profitable level. The prospective hospital must also be willing to work cooperatively with the ASC on a number of issues as well as demonstrate how the partnership will be fruitful for the ASC.
4. 3 Current Trends Impacting ASC Transactions — Currently, the ASC industry is in a tremendously dynamic climate. The economic downturn, healthcare reform and decreased reimbursements from Medicare are forcing ASCs to change the way they've traditionally approached and made business decisions, including transactions. ASCOA CEO Luke M. Lambert discusses three current trends impacting surgery center transactions.
5. 3 Factors That Can Increase the Value of ASCs to a Potential Corporate or Hospital Partner — Valuation is everything when it comes to ASCs looking to partner with a corporate entity or hospital, as it ultimately determines the ASCs level of attractiveness for acquisition. Jason L. Ruchaber, CFA, ASA, principal with HealthCare Appraisers, discusses three important factors an ASC should consider in order to increase its value when preparing for or considering a sale to a corporate or hospital partner.
6. Future of ASCs in Five Years: 10 Predictions on the Most Common Ownership Model — As of 2006, the most common ownership structure of an ASC was 100 percent physician-owned (61 percent of ASCs), followed by hospital/physician-owned (16 percent of ASCs) and corporation/physician-owned (11 percent of ASCs), according to data provided by VMG Health's 2009 Multi-Specialty ASC Intellimarker. With the healthcare reform law, payor issues, the decline in available physicians for recruitment and other challenges impacting the financial stability of ASCs, what will be the most common ASC ownership structure in five years — physician-owned, ASC, joint-venture ASC or HOPD? Here are 10 predictions.
7. 1 + 1 + 1 = 4: Making the Numbers Add Up for ASC Acquisitions — ASCs sometimes face the challenge of meeting projected outcomes, whether those outcomes are related to case volume, profitability or successful physician recruitment. Chris Bishop, partner and senior vice president of Blue Chip Surgical Center Partners, says the three keys to effective ASC turnarounds revolve around existing owner commitment to success, carefully selecting new owners with a proven track record of success and working with a strong management partner.
8. 3 Most Important ASC Specialties Resisting the Trend of Movement to Employment by Hospitals: A Quick Look at Orthopedics, Ophthalmology and Gastroenterology — The three most important specialties to ASCs are orthopedics, ophthalmology and gastroenterology, based on case volume and revenue statistics. Many of these specialties can still excel in group practice due in part to significant control over the generation of their own business. The specialties do however face both short- and long-term reimbursement challenges. Economic challenges are pushing many other specialties toward the security of hospital employment. This generally dissuades physicians from investing in and using ASCs. In this story, various industry leaders and professionals chime in on why these three specialties are resisting the trend of hospital employment.
9. How do ASCs Determine and Distribute Facility Profits Among Owners: Q&A With Scott Becker — Scott Becker, JD, CPA, discusses how ASCs traditionally distribute facility profits and in such a way that would not incur legal repercussions for their facilities.
10. 6 Common Complaints Physicians Have When Acquired by Hospitals — Even though physician group practices are acquired by hospitals for various reasons, mainly pertaining to increased financial stability and access to resources, these acquisitions may sometimes come with some sticky situations. Robert C. Bohlmann, principal of MGMA Health Care Consulting Group, advises hospitals on integrating group practices. Here he lists six common complaints physicians have when their practices are acquired by a hospital.