In a recent BNA's Health Law Reporter article, Albert "Chip" Hutzler, a partner at Health Care Appraisers Inc, discusses when DIY appraisals are sufficient and how to best perform one.
Mr. Hutzler notes 17 best practices when performing a DIY assessment:
- Use a consistent valuation method
- Use multiple valuation approaches
- Use multiple objective surveys
- Avoid cherry picking survey data
- Beware of productivity ratios in the survey data
- Beware of anecdotal data
- Beware of strategic value
- Avoid valuations based on "opportunity cost" calculations
- Beware of stacking multiple compensation elements on top of each other
- Beware of double payments
- Beware of circular databases
- In physician practice acquisitions, be sure to consider post-transaction compensation
- Beware of placing value on intangible assets
- Avoid rewarding internal valuators based on deal success or related profits
- Consider valuation frameworks
- Be sure to separately consider and document commercial reasonableness
- Have a consistent policy for when to refresh DIY valuations
To read the article in full, click here.