Providers pull the plug on merger deals with little value

Last year, a whopping three out of four healthcare organizations considered a merger or acquisition, but not all of the deals went through. A top reason for pulling the plug, according to an infographic from staffing firm CompHealth, published by MedCity News, was lack of agreement on valuation, affecting 39 percent of would-be deals.

Determining the value of a physician practice today is a little trickier than it used to be, noted Susanne Madden, founder and CEO of consulting firm The Verden Group, in a recent column for Physicians Practice. While valuations typically account for a practice's costs, revenues and items such as equipment and furniture, "assets" such as the patients and charts the practice has worked hard to build up, have little weight in a sale, as buyers have little guarantee that patients will remain loyal.

Rather, when looking to maximize your value when preparing for a sale, the place to make your practice shine is in your operations. Thus, to lower costs and maximize revenues, take a hard look at where you can reduce payroll expenses and material costs, Madden advised, and make sure your coding and collections are optimized.

Keep in mind, it's the job of valuation firms to reveal the weak spots in your business functions, according to an article from PhysBizTech. To avoid having a transaction go awry, according to consultant author Suzette Jaskie, president of MedAxiom Consulting, be sure to tighten up your accounting controls, dust off your compliance plan and increase oversight of your policies and procedures before the valuation process begins.

To learn more:
- read the article from Physicians Practice
- see the article from PhysBizTech
- check out the infographic from CompHealth