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Valuation of Compensation for Healthcare Services
Physician Clinical Services 
(Part One of a Four-Part Series) 
Healthcare services may be divided into two general categories, i.e., clinical related and nonclinical related, with nonclinical-related activities further divided into three generalized subcategories: administrative, management, and/or executive. These categories may be defined by the specific tasks, duties, responsibilities, and accountabilities (TDRAs) involved in each. This four-part Health Capital Topics series will provide a brief overview of the classification and valuation of compensation for four (4) common types of services rendered in the healthcare delivery industry: (1) compensation for physician clinical services; (2) compensation for physician executive services; (3) compensation for call coverage services; and, (4) compensation for medical director services. This first installment in the series will provide an overview of the classification and valuation of compensation for physician clinical services.

Healthcare services may be divided into two general categories, i.e., clinical related and nonclinical related, with nonclinical-related activities further divided into three generalized subcategories: administrative, management, and/or executive. These categories may be defined by the specific tasks, duties, responsibilities, and accountabilities (TDRAs) involved in each. This four-part Health Capital Topics series will provide a brief overview of the classification and valuation of compensation for four (4) common types of services rendered in the healthcare delivery industry: (1) compensation for physician clinical services; (2) compensation for physician executive services; (3) compensation for call coverage services; and, (4) compensation for medical director services. This first installment in the series will provide an overview of the classification and valuation of compensation for physician clinical services. (Read more...) 
On July 27, 2016, the Centers for Medicare and Medicaid Services (CMS) publicly released its five-star hospital quality rating system, to much pushback from the healthcare industry. CMS developed its rating system, built from metrics utilized in its Hospital Compare database, in an effort to support consumer decision-making on hospital choice. However, critics of the ratings system, such as the American Hospital Association, suggest that the results may be misleading for consumers, as it may not accurately reflect the quality of care provided by hospitals, and may be negatively biased in rating hospitals that serve underprivileged patients or relatively more complex cases. The difference between the reputations of hospitals and CMS's rating may have industry and consumer implications, such as negative press attention for hospitals and inaccurate information for consumers. This Health Capital Topics article provides a brief overview of the development of CMS's five-star rating system, and explores potential implications for hospitals and consumers affected by the perceived shortcomings of the new system. (Read more...) 
Recent legal actions against Express Scripts, Inc. (ESI) have triggered momentum for potential shifts in the competitive landscape for the Pharmacy Benefit Management (PBM) industry in the United States. Most notably, Anthem's March 2016 lawsuit against ESI alleging non-competitive pricing for PBM services has increased calls for heightened price transparency among PBMs, as well as a movement toward in-house PBMs among health insurers. Despite these trends, the future of independently operated PBMs might not be entirely inauspicious. Since PBMs have the ability to privately negotiate prices with pharmaceutical manufacturers, PBMs can bargain for cheaper, sometimes exclusive, deals that smaller health insurance providers do not have the competitive position to leverage. This second installment of the two-part Health Capital Topics series on the PBM industry will discuss the current state of the litigation regarding ESI, and the potential impact that such litigation may have on ESI and the PBM industry as a whole. (Read more...)
This third installment of the six-part Health Capital Topics series on the application of statistical methods by valuation analysts will provide a brief overview of the coefficient of variation (CVAR) and its utilization in various valuation techniques and methodologies. The CVAR is a convenient measure of dispersion, i.e., the amount of spread in the data, which describes the variance of data relative to its mean. It is calculated as the standard deviation of the subject sample divided by the mean of such sample, and in valuation analysis, may support the defensibility of a particular financial forecast or benchmark comparison, depending on the needs set forth in the engagement and the size of the data set subject to interpretation using this technique. (Read more...)

HCC CEO Bob Cimasi Recognized as a "Pioneer of the Profession" under NACVA's "Industry Titans" Awards
 HCC CEO Robert James Cimasi, MHA, ASA, FRICS, MCBA, CVA, CM&AA, has been named a "Pioneer of the Profession," by the National Association of Certified Valuators and Analysts (NACVA) and Consultants Training Institute (CTI) as part of their Silver Anniversary recognition luncheon of valuation "Industry Titans," held on June 10, 2016, during their 25th Annual Conference in San Diego.  Mr. Cimasi joins valuation profession luminaries, including: Dr. Shannon P. Pratt, Chris Mercer, James R. Hitchner, Roger J. Grabowski, Richard Wise, Jay E. Fishman, Nancy Fannon, Honorable Judge David Laro, Howard Lewis, and Mel H. Abraham, along with fourteen others, in receiving this honor. Congratulations to Bob Cimasi and his fellow "Pioneer of the Profession" honorees from the HCC Team and Topics Staff!