Cimasi: “Wal-martization” of healthcare affecting physician practice valuations

Healthcare valuation expert Robert Cimasi (Health Capital Consultants) gave a detailed and lively update on emerging issues in healthcare valuation at the AAML/AICPA conference in Las Vegas last week. Cimasi outlined “Four Pillars of the Healthcare Industry” that are impacting the transactional valuation of healthcare enterprises:

• Reimbursement: e.g. there is a current downshift in reimbursement which has driven physicians to seek additional sources of income in ancillary services.
• Regulatory: e.g. current legislative efforts to restrict physician-owned hospital growth are an attack on niche providers.
• Competition: e.g. hospital acquisitions of physician practices and physician employment by hospitals is rapidly increasing.
• Technology: e.g. increased use of advanced surgical procedures such as minimally invasive surgery and robotics are reducing the value of some physicians’ services.