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As discussed in the first and second installments of this three-part Health Capital Topics series on private equity (PE), investments from PE Firms experienced record growth in the healthcare industry in 2016, and have realized greater returns on investment compared to other industries. Nevertheless, concerns remain as to the similarity of this trend in PE investment to that of physician practice management companies (PPMCs) in the 1990s, which ultimately failed and left corporations such as Phycor and MedPartners with huge losses and stock prices that plummeted to under $2 per share (once above $30 per share). During this period, PPMCs attempted to create value in the healthcare industry by supplying physicians with management services as well as an alternative means to access capital. However, this model eventually failed because it did not yield a return on the acquisitions that exceeded the PPMC's weighted average cost.
As discussed in the first and second installments of this three-part Health Capital Topics series on
private equity (PE), investments from PE Firms experienced record growth in the healthcare industry in 2016, and have realized greater returns on investment compared to other industries. Nevertheless, concerns remain as to the similarity of this trend in PE investment to that of physician practice management companies (PPMCs) in the 1990s, which ultimately failed and left corporations such as Phycor and MedPartners with huge losses and stock prices that plummeted to under $2 per share (once above $30 per share). During this period, PPMCs attempted to create value in the healthcare industry by supplying physicians with management services as well as an alternative means to access capital. However, this model eventually failed because it did not yield a return on the acquisitions that exceeded the PPMC's weighted average cost.   (Read more...) 
Trademarks and trade names are symbols that represent an intangible quality of the good or service provided under the trademark/trade name. They are both components of the brand of a business entity. Trademarks and trade names hold economic value, in that they have the capacity to bring recognition and "brand loyalty" to the subject enterprise through the perception of quality assurance in the goods and/or services provided by the branded organization.  (Read more...) 
On December 6, 2017, the Centers for Medicare and Medicaid Services (CMS) announced that fiscal year (FY) 2016 national health spending was $3.3 trillion ($10,348 per capita), a 4.3 percent increase ($354 per capita) from 2015, a slower pace than the 5.8 percent growth realized in FY 2015. This slowed spending growth was experienced by all major third party payors (e.g., Medicare, Medicaid, and commercial insurers), as well as by several health goods and service categories (e.g., hospital care, physician and clinical services, and retail prescription). 
The first part of this six-part series set forth an overview of the due diligence imperative for valuation professionals, in the context of the Four Pillars of Healthcare Value, i.e.,  Reimbursement, Regulatory, Technology, and Competition. The second, third and fourth installments reviewed the due diligence process related to the reimbursement, regulatory and competitive environments, respectively. This fifth installment will review the due diligence process as relates to technology in the healthcare industry.  (Read more...)
ANNOUNCING
 
Advanced Distance Education to Launch in 2018

The Institute for Healthcare Valuation (IHV) & Consultants' Training Institute (CTI) are pleased to announce premier healthcare valuation training through a distance education program, the Certificate of Educational Achievement (CEA) for Advanced Education in Healthcare Valuation. The program will launch in 2018 and will bridge the interdisciplinary nature of healthcare valuation to include: the Four Pillars of Healthcare (regulatory, reimbursement, competition, and technology); the market forces shaping the U.S. healthcare industry; and the valuation of healthcare enterprises, assets, and services. Legal professionals and healthcare providers, as well as those wishing to expand their scope of activities in healthcare valuation engagements and those seeking to enhance their current healthcare valuation service lines, will gain comprehensive knowledge through completing the expansive program. The program has been developed and is being presented by industry thought leader Health Capital Consultants, alongside a blockbuster faculty of healthcare subject matter experts from the legal, federal regulatory, and valuation professions.

HCC President, Todd Zigrang, is honored to have co-authored the chapter entitled, "The Threshold of Commercial Reasonableness," in BVR/AHLA's newly published Guide to Valuing Physician Compensation and Healthcare Service Arrangements (2nd Edition).