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Healthcare Appraisers General Overview Founded in 2000 Two offices (in Florida and Colorado) Hundreds of clients across the country; thousands of completed.

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Presentation on theme: "Healthcare Appraisers General Overview Founded in 2000 Two offices (in Florida and Colorado) Hundreds of clients across the country; thousands of completed."— Presentation transcript:

1 Healthcare Appraisers General Overview Founded in 2000 Two offices (in Florida and Colorado) Hundreds of clients across the country; thousands of completed projects “Founded” in providing FMV analysis for the hospital sector (e.g., HCA’s CIA) Currently, clients include the entire healthcare constituency HAI’s staff includes a heavy emphasis on valuation and financial credentials (e.g., ASA, AVA, CFA, CPA) and healthcare and health law experience We actively develop and contribute to the healthcare valuation body of knowledge (through articles, surveys, presentations)

2 HAI’s Professional Staff Principals: Daryl P. Johnson, MAcc, AVA Todd J. Mello, ASA, AVA, MBA Fred M. Lara, CFA, AVA Scott M. Safriet, MBA, AVA Professional Staff: Curtis H. Bernstein, CPA/ABV, CVA, MBA Albert D. Hutzler, J.D., MBA Paul E. Risner, J.D. Karen Bairstow, MBA Ann S. Brandt, Ph.D. Jim D. Carr, MBA Richard E. Chasinoff, MBA, MHA Christopher W. David, CPA/ABV, ASA, MBA Andrea Ferrari, J.D., MHA Melissa R. Keehn, MPA. Barbara Landy, MBA, MHA, FACHE Adam S. Polsky, MBA Terika L. Haynes, MHA Kyle M. Tormoehlen, MBA

3 Valuation Approach Our projects are tailored to client-specific engagements. Engagements may address (i) selected compensation arrangements or (ii) systematic programs for establishing FMV. We do not publish or provide “canned” FMV guidance. We apply traditional valuation methodologies, modified as required to comply with applicable healthcare regulations. Our approaches insure that conclusions are not based upon “tainted” market values and that other common healthcare valuation pitfalls are avoided.

4 The Healthcare Valuation Risk Continuum  No formal valuation process  Payment rates are based upon: Market surveys Physician “demands”  Use of independent, credentialed appraiser  Strict compliance with the FMV definition  Formal documentation process  Use of accepted valuation approaches  Applicable market data is free from bias  Logical, defensible, reproducible conclusions More Risk Less Risk

5 Implications of the FMV Standard FMV involves a hypothetical scenario FMV is distinctly different from investment value (which considers synergies among the parties) FMV is not established through… Earnest negotiations An amount that is requested Opportunity cost Reliance upon “tainted” market values

6 Relevant Arrangements Payments to physicians for personally performed services Thought Leader / Medical Director / Promotional Presentations / Educational Programs Physician participation in clinical studies (e.g., principal investigator, etc.) Licensure / royalty payments Payments involving intellectual property

7 Our Mantra An evaluation methodology that analyzes each parameter in an objective, consistent and repeatable way. Adherence to accepted valuation theory, as modified to comport with healthcare regulations. A FMV outcome that can be supported via independent market data. A comprehensive written work product that documents the valuation approach(es) and the FMV findings. A reliable and comprehensive valuation approach should provide:

8 Example: Determining The FMV of Thought Leader Compensation Determine extent of the services (i.e., how many hours). The nature of the specialty. Credentials/qualifications of the thought leader. The specific services contemplated by the arrangement.

9 A Cost Approach: The Thought Leader Compensation Algorithm Utilizes survey benchmark compensation data, by medical specialty, as the starting point. Considers multi-year data. Compensation data is adjusted for taxes/benefits. Makes a series of adjustments to the benchmark data based on: The extent of thought leader time required. Specific requirements of the position. The skills/experience of the specific thought leader.

10 Considers Specific Duties and Responsibilities Number of hours associated with each duty and/or responsibility. The specific duties & responsibilities of the position. The complexity of each duty and/or responsibility. Level of leadership required. Specific objectives and deliverables. Potential impact of thought leader/consultant on organizational and/or product success.

11 Considers Thought Leader Qualifications Educational credentials and specialized training. Professional certifications. Leadership experience. Academic appointments. Research experience and funding history. Invited presentations. Publication history. Other professional leadership activities / recognition in the healthcare community.

12 How We “Score” the Thought Leader Algorithm Establish relative weightings for the pertinent factors. Identify interdependencies among the factors (e.g., extent of time requirement vs. qualifications of thought leader). Consider potential redundancy of qualifications.

13 The Market Approach Places reliance upon “non-tainted” data. Considers physician compensation arrangements that are free from referral bias. “Crosswalks” the arrangement to non- healthcare settings.

14 Our Approach To Non-Tainted Market Data Fees paid to physicians who are not in a position to refer: Expert witness fees Physician consultants Fees paid to comparably qualified non- physicians: Consultants Attorneys

15 15 75 NW 1st Avenue, Suite 201 Delray Beach, FL Happy Canyon Road, Suite 240 Castle Rock, CO Daryl Johnson Ann Brandt


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