On Friday, in a striking blow to 40 years of administrative law doctrine, the Supreme Court overturned the “Chevron deference”. Previously, this doctrine gave Federal agencies substantial authority to interpret ambiguous laws through rulemaking. While the case being decided by SCOTUS was not a healthcare case (it involved the management of herring fishing), it has the potential to substantially impact the interpretation of healthcare regulatory law as we currently know it.
We have been hearing about a “bid-ask spread” issue in the lower middle market healthcare space for a significant time, and I wanted to discuss this and also mention another pocket of dislocation that I see.
With the first quarter behind us, we want to share some insights after talking with several healthcare investors since the beginning of the year. Here are some commonalities:
Hospitals across the country are facing increasing labor costs, with physician compensation being a major contributor to the upward trend. According to the KaufmanHall Physician Flash Report, labor expense continued to outpace the increase in revenue for services provided in 2023.
For many owners of independent construction firms, selling their business is more than an exit strategy; it is the cornerstone of their retirement plan.
Buying or selling a dental practice is a major decision with lasting impacts. Dentists rarely turn over the keys and walk away from operations – the process is much more of a transition
rather than a transaction.
Buying or selling a dental practice is a major decision with lasting impacts. Dentists rarely turn over the keys and walk away from operations – the process is much more of a transition rather than a transaction.
Dental practice transitions rarely involve the selling dentist “turning over the keys and walking away” from operations. With this in mind, a
dental practice valuation includes the difficult tasks of projecting future operations and discounting those projections to a single and subjective present value.
Statistics indicate baby boomers account for more than 50% of the construction industry. That means half of owners, along with their skills and knowledge, are headed towards retirement. Even more alarming is only half of those owners have a succession plan. If your company faces a disruption or change in ownership it reduces its chance of survival to only a small percentage. Even owners who don’t have an immediate retirement on the horizon need to have a plan.
Less than a year. That’s how long it took a successful construction company to permanently close after the owner unexpectedly passed away. Before his death, the company was thriving. But without a business continuity plan in place, the business didn’t survive a year.
Jarrod Barraza serves as a senior manager in the healthcare valuation service line at HORNE where his practice focuses on business valuation and transaction consulting services in the healthcare industry. Jarrod joined the firm in 2019. Prior to joining HORNE, Jarrod served as a manager in a national healthcare valuation and consulting firm and as an intern at a boutique business valuation and litigation support firm.
Healthcare is going through tremendous transformation and clients need us now more than ever, particularly as it relates to physician/hospital integration. In helping our clients structure physician/hospital arrangements, Rud Bluementritt is in a unique position to point out areas of concern and suggest workable solutions that are sound and compliant with healthcare regulatory rules, so clients can avoid potential severe, far-reaching penalties.
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