Insights Into Hospital Transaction Multiples Print E-mail
Written by HEALTHCARE | Value Wire   
Monday, 01 September 2014 10:54

The Affordable Care Act has been the primary driver of transaction activity in healthcare, which is having its effects on price multiples. The ACA's emphasis on lowering reimbursements and at the same time increasing requirements for quality and access to care is pressuring providers to make up for potential lost revenue and also reduce operating costs to free up capital to invest in quality-of-care initiatives. This is causing hospitals to consider acquisitions, joint ventures, and partnerships. All of this activity is having its effects on price multiples.

Speaking during a recent BVR webinar, "Hospital Valuations in the Health Reform Era," Don Barbo (Deloitte Financial Advisory Services LLP) and Robert Mundy (Pershing Yoakley & Associates, P.C.) gave their observations on hospital transaction multiples published in the Health Care Services Acquisition Report, 20th Edition, 2014 (Irving Levin Associates).

The median price to revenue multiple has been declining to a level now of around 0.56 of net revenue. Mundy points out that some of the decline from 2011 could be the result of some smaller or financially distressed hospitals being bought up by more financially stable hospitals. "Healthcare reform pressures affecting smaller rural hospitals could be putting downward pressure on the price to revenue multiple," he says. Barbo agrees: "Yes, some hospitals could now be feeling the 'teeth of health reform' and experiencing a deterioration of performance, so they may be selling now at a lower price."

The median price to EBITDA multiple has been on a roller coaster ride on its way to a current level of 9.2. Barbo observes that one of the reasons for this is that the Levin data use the last one to two years of historic EBITDA, while buyers are using more current information. In some cases, they may be using pro forma information to drive the deal price.
Sarasota Urologist Challenges Regulators Print E-mail
Written by Carol Gentry | Health News Florida   
Tuesday, 26 August 2014 10:58

Sarasota urologist Ronald Wheeler says he's going to continue doing a controversial prostate-cancer treatment, even though an FDA panel recently voted against it and even though the state could punish him for it.

Because the U.S. Food and Drug Administration has not approved the French device that Wheeler uses for high-intensity focused ultrasound, called HIFU, he has been treating his patients in Mexico...

... The FDA panel isn't Wheeler's only current problem. As Health News Florida reported in June, the Florida Board of Medicine is so suspicious of his style of practice that it voted to seek his suspension, calling him "a menace to society."

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Sponsor Showcase Print E-mail
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Monday, 01 September 2014 00:00
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Last Updated on Monday, 01 September 2014 10:57

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