Anyone have two $10s for a $5? Long accepted practices such as valuing return on investment and disregarding anecdotal “data” (as one proponent exclaimed: “Well, it is data!”) are being ignored in favor of quicker, cost-efficient “opinions” of value. We risk training an entire generation of appraisers in methods that fail to conform to finance theory, something akin to voodoo finance. For example, a hypothetical buyer will choose to “buy” rather than “build” an asset or assemblage of assets with no cash return on the investment and no ability to resell the assets? No income, no market, but value due to cost nonetheless? Join BVR/AHLA Guide to Healthcare Industry Finance and Valuation editor and author Mark Dietrich for an in-depth review and critique of physician practice techniques including market data, compensation surveys and non-competes. Ensure your physician practice valuation passes the mark.

• What is “market data” and do transaction terms affect the price of what is being bought and sold? (Hint: You betcha!)
• Terms make the deal and the fair market value: Would you pay the same price for an accounting practice owned by a healthy 45 year old if he/she declined to sign a noncompete; what if the staff had no noncompetes and would not sign one? Would you advise a client to pay the same price for a physician practice owned by an analogous 45 year old where a noncompete was unenforceable under state law?
• When is a statistical median not a statistical median? (Hint: when the population sampled is not random and your target practice did not participate or have a chance to participate in the survey!)
• Do ANY of the Physician Compensation Surveys represent a definitive basis for concluding on Fair Market Value or Reasonable Compensation? (Hint: Not without quantifying LOCAL MARKET compensation rates.)
• Do those Survey compensation rates per work RVU (wRVU) leave enough net revenue in a physician practice to cover the overhead?
• Should I care what insurer contracts with physician providers require with respect to continuity of patient care  - like making a copy of the medical record available FOR FREE? Do I care what the federal and state statutory data security, storage and retrieval obligations, and charge to copy are for patient medical records? Can’t I just use $25 per chart or some other random value because I know they are worth something?
• Do Publicly-traded and Private Equity Firms buy physician practices and continue to pay the doctors 100% of the practice’s earnings, or more than 100%, such that the Firm loses money on the deal? Do hospital buyers ever do that? Are the transaction multiples from Publicly-traded and Private Equity deals relevant to a transaction with wholly different terms? … Anyone got two $10s for a $5?

• Understand the impact of market data and transaction terms
• Learn about concerns and considerations when using Physician Compensation Surveys
• Describe the impact of insurer contracts