| The Perils of Using Survey Data to Forecast Physician Compensation in Medical Practice Business Valuations
Program Type: Recorded Webinar (Audio, PPT)
Program Level: Basic
Prerequisites: Previous training or experience with the fundamentals of accounting, finance, economics, and business writing. These individuals are often at the staff or entry level in the organizations, although such programs may also benefit a seasoned professional with limited exposure to the area.
Advanced Preparation: None
Delivery Method: Group Internet-Based
CPE Credits: Two (2) Hours
Fields of Study: Accounting
Shipping Weight: 0lbs. 0oz.
Traditional business valuation practice frequently looks to survey data as the primary means for normalizing owner compensation in small businesses and professional practices. In appraising physician practices, many practitioners turn to physician compensation survey data in order to forecast physician compensation for purposes of the Income Approach.
Recent studies, however, have shown that such surveys may not provide reasonable compensation for physicians in a specific local market. Consequently, uninformed use of survey data can lead to distorted valuations of physician practices. As an alternative, practitioners should consider use of the independent investor test as the primary tool for establishing reasonable compensation for physicians.
The webinar will also address the use of negotiated post-transaction compensation terms in applying the Income Approach for valuing physician practices in buy/sell deals. The session content has application to physician practice valuations for healthcare regulatory and tax compliance purposes as well as litigation settings, including divorce and damage calculations.
After attending this webinar, attendees will be able to:
- Identify the key limitations of physician compensation survey
- Analyze and understand the key drivers of physician compensation
- Develop more accurate and applicable forecasts of physician compensation in the local market context
- Recognize the importance and limitations on using negotiated post-transaction compensation in buy/sell deals involving physician practices
- Improve the accuracy and rigor of physician practice valuations
Who Should Attend
Valuation practitioners, CPAs, and attorneys
Timothy Smith, CPA, ABV
Mr. Timothy Smith is the national director of American Appraisal’s healthcare valuation practice. Mr. Smith has over two decades of experience in the healthcare industry, including more than 14 years at Hospital Corporation of America, Inc. (HCA), working on physician practice deals and compensation arrangements. Following his HCA tenure, Mr. Smith has worked in the appraisal profession with a focus on physician compensation arrangements. He is the co-editor of the BVR/AHLA Guide to Healthcare Industry Compensation and Valuation and speaks nationally on topics related to healthcare valuation and physician compensation.