10 myths of healthcare business valuation
Robeson, J.D.; Kaplan, K.C.
Healthcare Financial Management Journal of the Healthcare Financial Management Association 62(10): 82
2008
ISSN/ISBN: 0735-0732 PMID: 18839669 Document Number: 616891
*Acceptance of common myths regarding business valuations can undermine a hospital's efforts to successfully negotiate deals with physicians. *Hospitals need to clearly understand the nature of fair market value (FMV), the use of multiples, the "guideline company technique," whether the FMV can be based on acute care revenue stream, the physician compensation model used in the valuation, and the applicability of the physician's historical production level. *Other matters that warrant careful consideration include whether to tax effect, whether to pay for goodwill, and whether obsolescence can be accounted for in the valuation.