If you are involved in or looking to become involved in running a healthcare business, such as an ambulatory surgery center, endoscopy center or urgent care/freestanding ER center, at some point you are going to need a healthcare valuator. They are a necessary source of assistance, particularly when you engage in healthcare mergers and acquisitions (M&A). Hiring a healthcare appraiser serves as an investment into your future.
Uncertain about what a healthcare valuator is and what one can do for you? It depends on your goals. The healthcare industry contains a series of complex rules and regulations all businesses must adhere to. Physician owners and administrators may not be fully aware of those that impact valuations of their business, services and equipment because they do not routinely arise in the course of their work. As a result, it’s imperative to assemble a team to best place you in the position you need to be to reach your desired outcome. One of the team members needs to be a healthcare valuations professional.
What is a Healthcare Valuator?
Put simply, an evaluator determines the value of an item, be it a healthcare business, real estate, equipment or service. There are several different types of appraisers, each of whom may focus on a different element. They might also have multiple specialties.
When looking for the appraisal of a business, that business may include real estate and equipment. Therefore, it can become difficult to determine which type of appraiser should be hired. It’s even possible to require more than one type of appraiser to completely assess everything.
What a Healthcare Valuator Knows
A healthcare evaluator works exclusively in the healthcare industry. There are appraisers who perform the types of valuation you need without focusing on healthcare in particular; however, that means they are not as familiar with constantly changing rules and regulations that might impact that their work. In addition, they are not as familiar with the way that businesses in the healthcare market are treated as someone who works in the market.
Transactions are only one element where valuations are needed. The intricacies of the healthcare market also impacts services that might need valuations, such as joint ventures, compensation, etc. Even a successful appraiser who has worked outside of the healthcare industry may have difficulties understanding the way the healthcare market differs.
Hiring a healthcare evaluator results in the knowledge that you have a credible source who understands the intricacies of the healthcare industry as pertains to valuations. That person also has greater knowledge of current trends within the market. Rather than potentially miss something that impacts the valuation of your practice, equipment, or services, it would be better to eliminate that uncertainty by hiring someone specializing in healthcare valuations.
Buyer and Seller Representation
Both buyers and sellers need to know the value of what’s being sold, be it the business, real estate, equipment, or services. This means that either side may be involved in hiring a healthcare evaluator.
As mentioned earlier, healthcare transactions are heavily regulated. All those involved in healthcare M&A need someone on their team who understands those rules and how they may impact the valuation process. A healthcare evaluator is well-versed in the ever-changing legislation that impacts their profession and will be able to provide a more credible and effective valuation based on that knowledge.
While healthcare M&A is often thought about with respect to buying and selling part or all of a healthcare business, but there are other parts of healthcare transactions to consider that involve valuations. These include partnerships, strategic alliances, joint ventures, employment agreements, real estate leases and raising capital among others. These situations may also require valuations to take place.
In addition, there are more diverse reasons someone might want a healthcare appraisal. They cover all forms of transactions from creation to selling to dissolution. They also may be involved in more general business practices such as tax planning or partnership disputes.
An Independent Team Player
There is a big difference between hiring a healthcare appraiser and all the other members of your team: independence. In order to have a credible assessment, the valuator’s opinion about the value must be completely independent.
All healthcare valuators who hold a professional designation are attached to an association with an ethics code that requires them to be independent. This means that they are not considered their client’s employee, advocate or agent. Independence means that the valuation given is based on the individual valuator’s professional expertise.
When you hire a healthcare valuations professional, you ensure that you have engaged a professional who is well-versed in the intricacies of the healthcare market that impact their valuation and who will provide an independent, expert opinion that others will consider credible. Therefore, a healthcare valuator is your best option.