Becker's ASC Review

Executive Briefing: 20 ASC Physician & Management Company Ownership: 32 Statistics By Laura Dyrda Executive Briefing: ASC Valuation Preparation HealthCare Appraisers, a nationally recognized valuation and consulting firm, provides services exclusively to the healthcare in- dustry, including: business valuation (e.g., ASCs, hospitals, physician practices, dialysis centers, home health, diagnostic/treatment facilities, and intangible assets); fixed asset appraisals for furnishings, machinery and equipment; fair market value opinions for compensation and service agreements (e.g., employment, ED call coverage, medical directorships, collection guarantees, equip- ment lease/use arrangements, and service/co-management arrangements); consulting and advisory services (including valuation for financial reporting); and litigation support. www.HealthCareAppraisers.com | info@hcfmv.com | (561) 330-3488 DELRAY BEACH | DENVER | DALLAS | CHICAGO | PHILADELPHIA Not all things are created equally. We are not your average Healthcare Valuation Firm. With over 12 years in the business and thousands of fair market value opinions rendered, HealthCare Appraisers has assembled a diverse, highly experienced team to help you navigate through a myriad of valuation needs and dilemmas. HealthCare Appraisers - Redeening Healthcare Valuation Since 2000 8. Copies of important contractual agreements including real estate lease, loans/notes, and primary service agree- ments (e.g. management and billing agreements) 9. Detailed staffing roster to include names, positions, start dates, FTE status and rates of pay 10. Detailed five-year projection which should ideally in- clude case volume by specialty, reimbursement by case, revenue, expenses and capital expenditures. To the extent that you are unable to complete this, the val- uator can create the model with significant input from the center. Valuation is a forward looking exercise. In other words, while the valuator will seek to review historical data, the valuator is doing so in attempt to predict the future cash flows of the center. These cash flows will be coupled with an assessment of risk which embodies the valuator's expectations as to the likelihood that the projected cash flows will actually be achieved. While the valuation process may seem foreign and, at times, daunting, most ASCs benefit from the process as much as learning the answer to the question "What's it really worth?" In other words, having a valuation expert study the financial and operational details of the center and relay his or her observa- tions can provide valuable insight to ASC owners and opera- tors. Depending upon the level of sophistication of the ASC's systems and management, trends and issues are identified and often explained and data may be examined in new and helpful ways which may cause positive changes at the ASC on a go-forward basis. n H ere are 32 statistics from the HealthCare Appraisers 2015 ASC Valuation Survey about ideal sur- gery center ownership. For Single Specialty ASCs Minority interest 1. 2.0-2.9x: 13 percent 2. 3.0-3.4x: 25 percent 3. 3.5-3.9x: 0 percent 4. 4.0-4.9x: 50 percent 5. 5.0-5.9x: 6 percent 6. 6.0-6.9x: 6 percent Controlling interest 1. 4.0-4.9x: 6 percent 2. 5.0-5.9x: 29 percent 3. 6.0-6.9x: 41 percent 4. 7.0-7.9x: 24 percent Preferred number of active physician owners Single specialty members • One to five physicians: 10 percent • Six to 10 physicians: 60 percent • 11 to 15 physicians: 30 percent Multispecialty members • 11 to 15 physicians: 61 percent • 16 to 20 physicians: 28 percent • 21-plus physicians: 11 percent Management company preferred ownership • Less than 10 percent: 10 percent • 11 percent to 29 percent: 35 percent • 30 percent to 50 percent: 25 percent • 51 percent to 75 percent: 25 percent • More than 75 percent: 5 percent n Multispecialty ASCs Minority interest 1. 2.0-2.9x: 7 percent 2. 3.0-3.4x: 0 percent 3. 3.5-3.9x: 20 percent 4. 4.0-4.9x: 33 percent 5. 5.0-5.9x: 27 percent 6. 6.0-6.9x: 7 percent 7. 7.0-7.9x: 7 percent Controlling interest 1. 5.0-5.9x: 6 percent 2. 6.0-6.9x: 17 percent 3. 7.0-7.9x: 67 percent 4. 8.0-higher: 11 percent

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