Dear Imaging Center Insider,
The new year is supposed to offer the promise of new beginnings, a chance for a fresh start and a brighter tomorrow. Imaging center administrators are pretty sure that 2007 will not be such a year.
Heavy cuts to diagnostic imaging reimbursement from both the U.S. Congress and the Centers for Medicare and Medicaid Services mean that managers will be trying to do a lot more with a lot less. An already competitive landscape will almost certainly heat up as practices seek to increase their clinical volume.
However, in times of great challenges, there will also be opportunity. Many groups will seek to leverage their particular areas of expertise with complementary practices, resulting in mergers and acquisitions. To determine whether consolidating forces makes good business sense, a valuation will be conducted.
According to Douglas Smith, president and CEO of healthcare consulting firm The Barrington Lakes Group of Barrington Lakes, IL, and Reed Tinsley, principal of Houston-based Reed Tinsley and Associates, diagnostic imaging centers are unique business entities that generate their own set of valuation factors.
Determining the value of a radiology practice or imaging center cannot be done by a standardized set of metrics, such as value equals x times earnings before interest, taxes, depreciation, and amortization, or as a multiple of one-year earnings. Radiology enterprises are subject to a specific set of factors bound by the participants in the group or center and constrained by the area in which it practices.
To learn more about the factors that influence the determination of value of radiologic specific entities -- and the reasons for having ready access to these data elements -- click here. As an AuntMinnie.com Imaging Center Insider, you have access to the article days before our other members.
If you have a comment or report to share about any aspect of imaging practice, management, administration, regulation, or financing, please contact me at [email protected]. I look forward to hearing from you.
