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Healthcare Markets, Part Deux

I heard yesterday that my Paper on healthcare markets tentatively titled Healthcare Market Structure And Its Implication For Valuation Of Privately Held Provider Entities: An Empirical Analysis will appear in the Summer Edition of Business Valuation Review - barring unforseen delays. In addition to speaking in part on this topic at the AICPA/ASA BV Conference, I will also present portions of it at the AICPA Healthcare Conference in September and the Tennessee Society of CPAs Healthcare Conference on December 2.

Now that the paper has been accepted for publication - after pre-submission peer review and critique -  I think it is reasonable to state that it has fairly dramatic implications for the use of out-of-market transaction data when using the Guideline Publicly Traded Company method or the Guideline Merged and Acquired Company method.

2008 National Conference Presentations

I will be speaking at the AICPA National Healthcare Industry Conference in September as well as at the AICPA/ASA National Business Valuation Conference in November.

http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/Accounting/IndustryspecificGuidance/HealthCare/PRDOVR~PC-CARE/PC-CARE.jsp

The National Healthcare Industry Conference is in San Diego this year and features a number of sessions devoted to valuation.  I will be particpating in a 4 hour pre-Conference session on FASB valuation issues with, among others, Jim Rigby, ABV, ASA one of the original contributors to FASB on Intangible Asset Impairment.  I will be sharing a session with Carol Carden, CPA/ABV, ASA on current issues in healthcare valuation as well as doing a Current Issues Confronting Physician Practice session with my colleague Reed Tinsley, CPA, CVA and several other experts. This marks my fifth consecutive invitation.

http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/BusinessValuationandLitigationServices/Engagements/PRDOVR~PC-BVAL08/PC-BVAL08.jsp

Don Barbo, CPA/ABV and I will again share a microphone at the joint AICPA/ASA National Business Valuation Conference in Las Vegas in November.  Testifying to the heightened importance of healthcare valuation, Don and I have been granted two back to back sessions to cover a broad spectrum of industry issues, including subsectors, revenue trends and market-specific factors.

This will be the seventh time since 1999 that I have been privileged to speak at this Conference on healthcare valuation.

BVR's Guide to Personal v. Enterprise Goodwill

I am privileged to have several articles included in the newly released Guide to Personal v. Enterprise Goodwill from Business Valuation Resources.  These include my methodology for valuing personal goodwill and noncompete agreements based upon the probability adjusted loss of cashflows attributable to the individual as well as an entirely new piece on the interplay of reasonable compensation and goodwill.

BVR's descrption of the Guide says it best: "BVR"s Guide to Personal v. Enterprise Goodwill is a compilation of thought leadership, including new and original contributions from David Wood, Jay Fishman, Mark Dietrich, Jim Alerding, Shannon Pratt, Kevin Yeanoplos, and many others."

Upcoming Teleseminar

On February 20, I will be moderating a Teleseminar for Business Valuation Resources.  The panel will include last year’s highly-rated participants Carol Carden, CPA/ABV, Don Barbo, CPA/ABV along with J. D. Epstein, a Houston-based healthcare attorney and highly rated speaker.  We’ll be looking at current valuation trends and issues in different subsectors of the industry as well last year’s regulatory changes and likely changes in 2008. Finally, I will be introducing for the first time a brief overview of the results of my research into the historical structure of healthcare markets across the country and how that effects valuation under the market approach.  I hope this research will be published later this year.

http://www.bvresources.com/defaulttextonly.asp?f=february20AudioConference08

Understanding & Valuing the Medical Practice

My course named above was favorably received in Arizona this past September, with the participants giving me a 4.76 for knowledge and 4.41 for presentation on the 5.0 scale.

Report on the Healthcare Economy

Purchasers of my now sold-out book and those who purchase the updated chapter on valuation methods in Adobe .pdf format have received a free copy of my most recent Report on the Healthcare Economy. Many of the statistical studies cited in that Report are released between June and September each year, and as such the new edition is only now available.  It reflects updates from: the Census Bureau's just released report on health insurance, the National Center for Health Statistics reports on Ambulatory Medical Care and Hospital Utilization, MedPAC's 2007 Report to Congress, Physician Utilization and Specialty Distribution, trends in Average Length of Stay, Inpatient Utilization and Cost per Day and Phase 3 of the Stark II regulations, released August 27, 2007. Many of the readers of my book find this helpful in their valuation practice.

Future editions of the Report on the Healthcare Economy will generally be released in November or December after the publication of the final Medicare Physician Fee Schedule Rule by CMS; in February after the publication of the annual National Health Expenditures projections; and again in the Spring.  These are currently available for $20 each; prior editions can also be purchased.

Forthcoming Article

In the next edition of Financial Valuation and Litigation Expert I will have an article summarizing the changes in ASC payments by Medicare, the Medicare Physician Fee Schedule Proposed Rule and most importantly, CMS' hinted changes in the Stark law regulations, which will likely have significant impact on discount rates and/or cashflow forecasts for the affected sectors.

Caracci

I am pleased to report that the article I wrote with Ken Patton of Mercer Capital on the Caracci case will be published in an upcoming edition of the AICPA's CPA Expert.  Ken and I worked hard to maintain the point-counterpoint structure of the article which takes two different perspectives on the appropriateness of the market approach in valuing single market entities by reference to multi-market public companies, as well as the import of MVIC or right-hand side of the balance sheet approaches to valuation versus left-hand or asset side approaches.

AICPA Healthcare Expert Panel

I received notification this week that I have been appointed to the AICPA's Healthcare Expert Panel for the upcoming year. One of this Panel's key tasks is to provide assistance with respect to the Healthcare Industry Audit and Accounting Guide. With the pending expansion of SFAS 141 and 142 to the not for profit sector, valuation issues are likely to be significant for the Healthcare Industry Expert Panel in the coming year.

Seminar Reminder

In the only offering of the year, I will be teaching my all-day course Understanding & Valuing the Medical Practice on September 13, 2007 in Phoenix for the Arizona Society of CPAs.

If you would like to attend but are unable, you can e-mail me about purchasing my course materials along with the current version of the Chapter on valuing medical practices from my book. The book is sold out, but I am working on the third edition and hope to have it available sometime in the Fall of 2008.