A report from today’s ASA Annual meeting in Phoenix confirms that intangibles as a percent of total purchase price are decreasing for medical industry businesses (those in SIC 80, generally). A possible explanation? As acquisitions start to increase again, there's less and less patient stability. Patients are growing increasingly familiar with changing doctors every time an insurance plan is adjusted. So, overall, less and less value is associated with individual practitioners. Other trends include:
- A trend toward higher debt to equity ratios;
- Slower growth; and
- Lower profits (though of course this touches the intangibles impact of physician compensation–and what the practitioners have taken out of the business).