Assessing the value in transactions involving multi-provider networks.

When seeking to determine the financial value of a multi-provider network, hospital finance executives should address the following considerations: Revenue projections. Shared savings revenue risk. Distribution of profits. Cost structure. Working capital requirements.

Value-based physician compensation tackling the complexities.

Hospital and health system leaders should address six important questions before shifting to a quality-focused physician compensation plan: Does the shift to a value-based compensation model present opportunities beyond the addition of quality incentives? Should measures be universal or aligned with specific payer initiatives? How much of an incentive is enough? How should quality and cost-effectiveness be measured? How should performance on the measures be assessed? How will total and individual compensation be affected?

Physician practice acquisitions: preparing for the transaction.

Hospitals embarking on acquisitions of physician practices should lay the groundwork for these transactions by: Building a framework for consistency. Preparing for possible exceptions to the framework. Broadly assessing the practice before advancing to the thorough valuation of the practice. Being alert for red flags and potential deal breakers and ready to address them.

Physician business deals: surveying the new landscape.

Strong hospitals and health systems should be on the lookout for opportunities today to acquire physician businesses at depressed fair market values. In some instances, an outright purchase of physicians' interest in a physician-hospital joint venture may be preferable; in others, the hospital may benefit more from simply increasing its interest in the venture. A critical part of the strategy should be taking steps to ensure the physicians remain engaged, including addressing physicians' income goals and need for control.

10 myths of healthcare business valuation.

*Acceptance of common myths regarding business valuations can undermine a hospital's efforts to successfully negotiate deals with physicians. *Hospitals need to clearly understand the nature of fair market value (FMV), the use of multiples, the "guideline company technique," whether the FMV can be based on acute care revenue stream, the physician compensation model used in the valuation, and the applicability of the physician's historical production level. *Other matters that warrant careful consideration include whether to tax effect, whether to pay for goodwill, and whether obsolescence can be accounted for in the valuation.