Avoid standard healthcare benchmarks if you get an imaging center engagement

“Valuing a diagnostic imaging center is very different from valuing any other healthcare enterprise,” Douglas Smith (Barrington Lake Group LLC) told listeners yesterday during the BVR webinar Imaging Centers: Lessons from an Industry Expert.  The diagnostic imaging center industry is “changing like crazy,” says Smith, and the centers’ unique structures require intense analysis.

Listed below are some of the potential landmines and valuation considerations “you want to avoid like the plague:”

  • Reimbursement for the technical component, on a per-unit- of-service basis, can either indicate substantial value, or certain impending financial death for the entity being valued.
  • Historic volume projections will, by definition, be based upon the facts of recent history – BUT – the emerging landscape will have an even bigger impact that historical performance.
  • If a particular geographic area population is flat or declining, does the natural increase in a certain imaging modality per population fit the forecast? One also needs to test the service area declared by the entity.
  • Both consultant and appraiser are often challenged on the forecast revenue per unit of service per modality – especially for entities with heavy CT and MRI content.
  • Are there more specialist physician high users of imaging services coming into the area?

Access the complete training pack and Smith’s expertise on valuing imaging centers here.