An Overview of the Physician Compensation Surveys Beginning in late May each year, numerous industry normative benchmark physician production and compensation surveys begin publishing the most recent year’s reports. When consulting benchmarking survey data for assessing physician compensation arrangements for FMV, it is important to understand and critically evaluate the quality of the data. This article pr ...

Use in Private-Business Valuation (Part IV) In this fourth article, the authors show how to apply the IPCPL theory using public market cost of capital. Read Part I, Part II, and Part III Application of IPCPL Theory When Bob Dohmeyer, Pete Butler, and Rod Burkert published their article on the IPCPL in 2013, they developed a discount rate from the Deal Stats database. In 2015, we published an article in whic ...

Use in Private-Business Valuation (Part II) This article in this continuing series explains the Implied Private Company Pricing Line (IPCPL), theory, evidence, and application of the IPCPL. How to Understand IPCPL Theory In the first article in this series (published in two parts 02/01/24 and 02/08/24), it was shown that the Implied Private Company Pricing Line (IPCPL) theory explains and predicts the relat ...

Use in Private-Business Valuation (Part II of II) This two-part article in this continuing series explains the implied private company pricing line (IPCPL). Read Part I here. IPCPL explains and predicts how buyers and sellers of capital assets in private markets set risk-adjusted discount rates under conditions of non-zero transaction cost differentials between public and private markets; and, accordingly, ...

Use in Private-Business Valuation (Part I of II) This two-part article in this continuing series explains the implied private company pricing line (IPCPL). IPCPL explains and predicts how buyers and sellers of capital assets in private markets set risk-adjusted discount rates under conditions of non-zero transaction cost differentials between public and private markets; and, accordingly, IPCPL explains and ...

How to Avoid Them! A 409A valuation refers to a method of determining the value of a company's common stock. In other words, the 409A valuation is a method of calculating fair market value (FMV) according to the regulations under the Internal Revenue Code (IRC). This valuation can be carried out using various types of valuation methodologies, however, it is important to avoid pitfalls in 409A valuation when ...

for SBA Lending Programs Despite the pandemic, the number of small businesses started continues to increase. This article discusses the various Small Business Administration (SBA) programs and the value of serving these lenders. “Success is a full-time job.” Grant Cardone Any entrepreneur or a small business owner would agree that running a successful small business is a full-time job. To run it well requir ...

This article briefly discusses the current trends in the practice management industry, as these trends may directly and indirectly affect both the management company and the healthcare entity. This overview of the services provided by practice management groups, is followed by a discussion of the competitive, reimbursement, regulatory, and technological environments in which practice management groups opera ...

Does the IRS or Anyone Care? (Part II of II) Part one of this article presented the “current method” and “option pricing method” (OPM) for allocating value to common stock for 409a valuations, and how these two methods differ in pricing of common stock. Part two examines the implied changes made by OPM and how it affects stakeholders. The article begins with a brief review of the key impacts on the valuatio ...

Does the IRS or Anyone Care? (Part I of II) In part one of this two-part article, the author presents the two methods for allocating value to common stock for 409a valuations, and then show how they affect the pricing of common stock. By way of background, to meet FMV, the standard of value requires measuring value under the representation of a hypothetical willing buyer and a hypothetical willing seller, b ...

Clinical Services (Part I of IV) In the March/April 2017 issue of The Value Examiner, the authors gave a detailed description of how clinical services for physicians can be calculated. QuickRead is pleased to present an overview of this series, which will be presented in four parts. Please look for the more detailed analysis in The Value Examiner. ...

Deal Structuring and Workforce in Place Considerations Under IRC and Stark Law What complications arise when two separate transactions are used to structure an asset sale of a physician practice? The key to compliance is to hit a reasonable middle ground under somewhat competing frameworks, and carefully drafting, documenting, and reporting accordingly. Valuators play a key role not only in establishing and ...

Why it Shouldn’t be A Dirty Word in the Valuation of Physician Practices The topic of goodwill in a physician practice acquisition continues to be hotly debated. There are very different viewpoints from reputable appraisers on how to value physician practices and whether hospitals can pay for goodwill in an acquisition. I often hear healthcare professionals involved in acquisitions say, “Hospitals can’t pay ...

Valuators Take Note Fair market value is key to compliance with both the Stark Law and the Anti-Kickback Statue. Solid, well-reasoned valuations can be essential in establishing compliant arrangements, and these must consider practice losses as applicable. In this article, Lynn Gordon, Esq., states that it is “prudent to have a valuation in place that supports compensation as fair market value,” especially ...

The Art of Licensing Your Trademark What is the value of a name? A trademark? In this article, the authors discuss the traditional valuation approaches and their limitations deriving the fair market value of the trade name. ...

Accuracy is everything This article provides an overview of the significance of regression analysis in business valuations, with a particular emphasis when applying the Market Approach. The theory is presented as to why regression analysis is superior to ratio analysis. ...

New private company cost of capital model delivers consistent and observable results The Implied Private Company Pricing Line (IPCPL) Cost of Capital Model seeks to eliminate pitfalls for unsystematic risk, liquidity, small stock premium, PTE taxes, and cash/leverage by utilizing real transaction, market-clearing prices between buyers and sellers of comparable small private businesses. ...

Why There is No Such Thing as a Minority Premium Robert Buchanan of PCE Valuations writes about the application of discounts to fractional interests and argues that some appraisers are mistaken when they assert that certain levels of discounts amount to a “minority premium” for certain non-controlling interests. Here’s the logic behind his thinking. Be sure to read Mr. Buchanan's whole argument at HERE. Her ...