For an owner considering the sale of a healthcare business, one of the first questions is usually: What is my business worth?

It is an important question, but determining value involves much more than applying a multiple to last year’s earnings. Two healthcare businesses with similar revenue and profits can receive very different offers. The difference may reflect the quality and predictability of their earnings, growth prospects, customer or referral concentration, management depth, regulatory risk, or how dependent the business remains on its owner.

When a prospective buyer makes an offer, the discussion often begins with EBITDA and a valuation multiple. A business owner may be told that the company is worth seven or eight times EBITDA. That sounds straightforward. But before deciding whether an offer is attractive, the seller needs to understand two things: what EBITDA figure the buyer is using and what the proposed purchase price will ultimately mean in dollars received and obligations retained.

Hiring a Private Caregiver in New Jersey: Understanding the Legal, Financial and Safety Risks

As more individuals choose to remain in their homes as they age, families are increasingly faced with an important decision: hire a private caregiver directly or obtain personal care services through a registered New Jersey Health Care Service Firm.

The difference involves much more than cost.

The eye care sector has become one of the most active areas in healthcare M&A, driven by an aging demographic, the rise of the medical optometry, and significant private equity interest. For practice owners and buyers alike, this presents substantial opportunity, along with complex legal pitfalls that can derail a transaction.

Buying or selling an optometry or ophthalmology practice is fundamentally different from purchasing a typical small business. These transactions sit at the intersection of corporate law, healthcare regulation, and professional licensure rules. A deal that looks clean on the financials can collapse during diligence when regulatory or structural issues surface.

The Corporate Practice Doctrine

Private equity has become the dominant force reshaping healthcare ownership in the United States. Investors are actively pursuing physician practices, ambulatory surgery centers, behavioral health organizations, home health and hospice agencies, dental and dermatology groups, physical therapy providers, infusion companies, and med spas. Capital is abundant. Attractive targets are not.

The healthcare organizations that command premium valuations share a common trait: they prepared long before entering the market. Purchase price and valuation multiples dominate the conversation, but sophisticated buyers evaluate management depth, financial integrity, compliance infrastructure, and growth trajectory. These factors, more than trailing earnings, determine what a practice’s worth.

What Private Equity Buyers Are Really Buying

Lindabury attorney Stephen A. Timoni of the firm’s Health Care industry team was recently interviewed by Relias Media and offered tips and best practices for providers offering telehealth services.

Some of the topics covered in the article include:

• privacy concerns due to the nontraditional electronic transmission of sensitive information among providers and patients

Stephen Timoni was recently interviewed by Karen Appold of Managed Healthcare Executive regarding significant changes on the horizon which are expected to affect both health insurers and providers alike.  Many are the result of a shift toward value-based care, a move toward decreased care in hospital settings, technological advances, and other forces.

Along these lines, Timoni says that consolidation has been motivated by the evolving and challenging commercial and government reimbursement models which include lower fee-for-service payment rates, value-based payment components, and incentives to move care from inpatient to outpatient settings. “Basic economic theory suggests that consolidation of hospitals and physicians enables these combined providers to charge higher prices to private payers as the result of a lack of competition,” Timoni says. “Likewise, combined insurers are able to charge higher premiums to their subscribers.”

You can read the full article online here.