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Results for “Practice Valuation and Purchase”

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At least 19 recordsLinked to original sources
PubMed1990

Practice valuation: an analytical approach.

Purchasing a dental practice is difficult. To help make this decision process more manageable, practitioners, practice management consultants, and practice appraisers often use standard valuation methodologies. Although useful, many of these models are simplistic, arbitrary, and dependent on criteria that are often susceptible to substantial subjectivity. Therefore, practice valuation results are often disputed. The capitalization of income method removes much of the subjectivity often associated with practice valuation and provides a more reliable assessment of the value of a practice.

Accounting↗
PubMed1997

Valuing dental practice.

Because new dentists are finding that initiating dental practices has become more problematic, the issues of practice purchase and valuation have become more salient. The purchase of a practice, although expensive, decreases the amount of time required before the dentist can experience a profit. This article discusses issues related to valuing, reviews some of the strategies related to the purchase of a practice, and recommends an objective approach to establishing fair market value.

Capital Expenditures↗
PubMed1999

Trend analysis of dental practice rent and mortgage expenses: 1989-1995.

BACKGROUND: The authors analyzed trends for rent and mortgage, as reported by independent active private practitioners, for the period of 1989-1995. Rent and mortgage were analyzed overall and by different characteristics. METHODS: In the ADA's annual "Survey of Dental Practice," dentists reported gross billings and net incomes, as well as itemized practice expenses. The authors tabulated survey responses over time to develop trends and compare rent and mortgage expenses for each year. If trends over time were not exhibited, the authors combined multiple years of data to develop more reliable statistics. RESULTS: Approximately three-fourths of independent active private practitioners reported rent but no mortgage expenses. The percentages of practitioners who reported rent or mortgage was stable over time. The percentage reporting rent only as an expense increased with the number of dentists in the practice, the age of the reporting dentist and the number of office locations. In contrast, the opposite was true for dentists reporting mortgage only as an expense. CONCLUSIONS: The authors found that office rental is more common than is office ownership and that mortgages as a percentage of gross billings and in dollar amounts were similar to rents. They also found that because the cost of office space as a percentage of gross billings decreased as the number of dentists in the practice increased, limited economies of scale may be present in the cost of dental office space. PRACTICE IMPLICATIONS: There is not a large financial advantage to ownership, so renting is likely to remain an important way to acquire office space. As only limited economies of scale exist in office space expenses, many group practices may choose to rent office space.

Capital Expenditures↗
PubMed1999

Retirement savings of dentists in private practice.

BACKGROUND: Retirement planning is an issue that concerns all working people. In this article, the authors present their analysis of the results of a 1995 American Dental Association survey that asked dentists questions about their plans to finance their retirement. METHODS: The ADA's Survey Center conducts a periodic "Survey of Current Issues in Dentistry," which gauges dentists' opinions about a variety of topics of interest to dentistry. The authors analyzed the results of the 1995 survey in which retirement savings was one of the topics. RESULTS: The majority of responding owner/dentists whose primary occupation was private practice (40.7 percent) indicated that they were relying only "a little" on the sales of their practices to finance their retirements. Overall, dentists whose primary occupation was private practice reported saving an average of 10.5 percent of their income specifically for retirement. The average total amount of money dentists invested in various retirement plans increased with age and was highest for the 55 to 59 and the 60 to 64 years of age cohorts. The only exception was the 401(k) plan, in which the peak occurred in the 65 years of age and older cohort. CONCLUSIONS: Fifteen years ago most dentists retired between the ages of 60 and 69 years. Recent trends show that dentists are retiring at younger ages. This means that while in practice, dentists must save enough to support themselves for 20 or more years of retirement. PRACTICE IMPLICATIONS: The transition from private practice to retirement can be difficult. Therefore, planning for the future is important. Dentists can benefit from making appropriate decisions based on age, investment goals, risk tolerance, monetary constraints and time until retirement.

Adult↗
PubMed2000

Observations on achieving total practice success.

A doctor or group practice that understands the design of what the practice wants to be and develops a strategy to accomplish that end will invariably achieve a high level of performance. Performance areas in contemporary practice administration cover a wide area including growth, transition, and succession. Due to the wide and demanding areas in practice administration, it is important to address any practice planning effort in a comprehensive manner rather than a piecemeal approach. The foregoing will materially assist any practitioner to achieve the level of success they seek.

Humans↗
PubMedDate not supplied

From primary care physician employment to private practice: easing the transition.

In most cases, the practice acquisition and employment strategy of the 1990s has backfired, with acquired physician practices losing in the range of $50,000 to $100,000 or more per physician annually. There are two alternatives for addressing the operating deficits incurred from practice ownership and physician employment: (1) restructuring through the implementation of network-wide and practice-specific initiatives to improve financial performance; or (2) wholesale (i.e., all practices) or selective practice divestiture, depending on the individual practice financial performance and "fit" with the physician network strategic priorities. Unraveling a decade's worth of physician-health system relationships that are grounded by the notion of acquisition and employment is going to be a complex process for both parties. But given the magnitude of financial losses on acquired practices and the inability of health care providers to sustain future losses, there simply are not options beyond restructuring or divesting these relationships.

Career Mobility↗
PubMedDate not supplied

To purchase or lease?

Explore the source record for details and available documents.

Dental Equipment↗
PubMed2000

Legal considerations in group practices and physician management.

Physicians are restructuring their practices in response to competition, managed care, and federal and state laws and regulations restricting their practice of medicine. Many physicians have formed group practices with the hope of selling this practice in the future. For physicians to profit from ancillary services, the group practice must meet federal and state requirements. If physicians choose to sell the group practice to a physician practice management company, careful review and negotiation of the purchase agreements are necessary to prevent complications if the arrangement is unsuccessful.

Group Practice↗
PubMed1999

Providing capital for physician group practices: new opportunities for hospitals.

As physician group practices grow and consolidate, they have an increasing interest in developing close capital partnerships to ensure access to capital. Yet as many healthcare organizations have sought to divest poorly performing acquired physician practices, physicians have seen their pool of potential capital partners shrink. Under these conditions, hospitals have a new opportunity to present themselves to physician group practices as attractive capital partners. To understand the nature of this opportunity, one needs to know why group practices seek capital, how groups approach their investment strategies, and what criteria they use to compare prospective capital partners. To build stronger relationships with physicians, hospitals should focus on turning around their poorly performing acquired physician practices and pursue strategies such as collaborating with physician practice management companies and developing new models for partnering with physicians (e.g., special purchase agreements and more advanced management services organizations).

Capital Financing↗
PubMed1999

Buy vs. bye.

At first, the retreat of practice management companies looked like a great opening for hospitals. What better way to acquire prime medical groups from motivated sellers? Trouble is, you still need a motivated buyer. That's why some observers contend hospitals will purchase only a fraction of medical groups being divested by MedPartners and other retrenching firms.

Decision Making, Organizational↗
PubMed2000

HCFA issues guidance and answers questions related to the provider-based status of facilities.

Over the last few years, the Health Care Financing Administration ("HCFA") has become increasingly concerned with hospital systems billing for services provided at related and affiliated sites as "provider-based" rather than independent facilities. By billing as provider-based, a hospital is entitled to charge HCFA in a slightly different manner that typically leads to higher reimbursement. In Program Memorandum to Intermediaries A-99-24, issued in May 1999, HCFA stated that, with the growth of integrated delivery systems, it has received numerous requests from entities requesting provider-based status. These requests, if approved, increase the portion of the facility's general and administrative costs supported by the Medicare program with no commensurate benefit to Medicare and its beneficiaries. Therefore, it is critical that HCFA designate as provider-based only those entities that are unquestionably qualified. On September 20, 2000, HCFA's administrator released a letter summarizing this concern over provider-based entities. The letter stated that the Department of Health and Human Services Office of Inspector General ("IG") has concluded that many hospital purchases of physician practices appear to have been designed not to ensure services are provided to participants in the most appropriate setting but, rather, simply to obtain higher Medicare payments. The IG strongly recommended that, if such arrangements continue, HCFA take steps to curtail them. The outcome of this recommendation is the proposed provider-based regulations ("Proposed Regulations") issued by HCFA on April 7, 2000.

Centers for Medicare and Medicaid Services, U.S.↗