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Results for “Practice Valuation and Purchase”

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At least 19 recordsLinked to original sources
PubMed1990

Practice valuation: an analytical approach.

Purchasing a dental practice is difficult. To help make this decision process more manageable, practitioners, practice management consultants, and practice appraisers often use standard valuation methodologies. Although useful, many of these models are simplistic, arbitrary, and dependent on criteria that are often susceptible to substantial subjectivity. Therefore, practice valuation results are often disputed. The capitalization of income method removes much of the subjectivity often associated with practice valuation and provides a more reliable assessment of the value of a practice.

Accounting↗
PubMed1997

Valuing dental practice.

Because new dentists are finding that initiating dental practices has become more problematic, the issues of practice purchase and valuation have become more salient. The purchase of a practice, although expensive, decreases the amount of time required before the dentist can experience a profit. This article discusses issues related to valuing, reviews some of the strategies related to the purchase of a practice, and recommends an objective approach to establishing fair market value.

Capital Expenditures↗
PubMed2002

So you want to buy a dental practice.

The decision to buy a dental practice is the most important one in a young dentists professional career and should be made only after a careful examination and review of the seller's practice. Usually the buyer is 35 years or younger, married with children, dental school loans of anywhere from $50,000 to $300,000, and little or no net worth. The practice this dentist purchases will have an impact on the kind of professional he or she is, and will also have a lasting effect on the dentist's quality of life and that of his or her entire family. Areas requiring examination are examined here, along with the need for a due diligence review prior to purchase.

Accounting↗
PubMed2002

Successful physician-hospital integration in rural areas.

OBJECTIVES: During the 1990s hospitals competed to acquire physician practices. Those competitive bidding wars could have pushed the price of practices beyond the value obtained by gaining influence over physicians. This paper examines how hospital location and competition for physician practices affects the profitability of physician-hospital integration in rural areas. MATERIALS AND METHODS: Eight years of data covering 338 rural hospitals are used to test whether the acquisition of physician practices is more successful in more isolated, uncompetitive rural markets than in competitive rural markets. A hospital without a competitor within a 15-mile radius is deemed to operate in an uncompetitive market. Success is measured by shifts in admissions, lengths of stay, and overall profitability following the acquisition of a physician practice. RESULTS: Hospitals in uncompetitive rural markets that acquired practices showed decreased lengths of stay and increased admissions with no reduction in profitability. Hospitals in more competitive rural markets that acquired practices showed a decrease in profitability. CONCLUSIONS: Integration was a more profitable strategy for isolated rural hospitals than for hospitals with nearby competitors. Although further research is needed to determine if these results are due to the affect of competition on the cost of acquiring and operating practices, isolated rural hospitals should be open to the prospect of acquiring physician practices. Hospitals in competitive markets should be cautious about entering bidding wars for physician practices.

Catchment Area, Health↗
PubMed2002

Why do rural primary care physicians sell their practices?

This study evaluates why rural primary care physicians sell their practices. A random sample of rural primary care practices in California, Utah, Ohio, Texas, and Virginia were surveyed to investigate changes in ownership of the practices during the period 1995-1998. These five states were selected because they represent areas with different experiences with physician-hospital integration and varied rates of managed care penetration. A series of logistic regressions were conducted to examine the factors that led independent physicians to sell their practices to either nonlocal buyers, local hospitals, or local physicians. Findings suggest that sales to nonlocal buyers represent the majority of practice ownership changes. The motivations for ceding control to nonlocal buyers center on managed care concerns, recruitment concerns, and administrative burdens. Sellers were also concerned about their level of net income prior to being acquired. However, the preacquisition financial concerns of sellers were not significantly stronger than the financial concerns of practices that remained independent. The environmental conditions that motivate rural physicians to sell their practices are not expected to improve. Therefore, additional sales of rural primary care practices to nonlocal buyers are expected. Further research is necessary to determine whether this shift in control will lead to changes in the quality or accessibility of care.

Analysis of Variance↗
PubMed1999

Trend analysis of dental practice rent and mortgage expenses: 1989-1995.

BACKGROUND: The authors analyzed trends for rent and mortgage, as reported by independent active private practitioners, for the period of 1989-1995. Rent and mortgage were analyzed overall and by different characteristics. METHODS: In the ADA's annual "Survey of Dental Practice," dentists reported gross billings and net incomes, as well as itemized practice expenses. The authors tabulated survey responses over time to develop trends and compare rent and mortgage expenses for each year. If trends over time were not exhibited, the authors combined multiple years of data to develop more reliable statistics. RESULTS: Approximately three-fourths of independent active private practitioners reported rent but no mortgage expenses. The percentages of practitioners who reported rent or mortgage was stable over time. The percentage reporting rent only as an expense increased with the number of dentists in the practice, the age of the reporting dentist and the number of office locations. In contrast, the opposite was true for dentists reporting mortgage only as an expense. CONCLUSIONS: The authors found that office rental is more common than is office ownership and that mortgages as a percentage of gross billings and in dollar amounts were similar to rents. They also found that because the cost of office space as a percentage of gross billings decreased as the number of dentists in the practice increased, limited economies of scale may be present in the cost of dental office space. PRACTICE IMPLICATIONS: There is not a large financial advantage to ownership, so renting is likely to remain an important way to acquire office space. As only limited economies of scale exist in office space expenses, many group practices may choose to rent office space.

Capital Expenditures↗
PubMed1999

Retirement savings of dentists in private practice.

BACKGROUND: Retirement planning is an issue that concerns all working people. In this article, the authors present their analysis of the results of a 1995 American Dental Association survey that asked dentists questions about their plans to finance their retirement. METHODS: The ADA's Survey Center conducts a periodic "Survey of Current Issues in Dentistry," which gauges dentists' opinions about a variety of topics of interest to dentistry. The authors analyzed the results of the 1995 survey in which retirement savings was one of the topics. RESULTS: The majority of responding owner/dentists whose primary occupation was private practice (40.7 percent) indicated that they were relying only "a little" on the sales of their practices to finance their retirements. Overall, dentists whose primary occupation was private practice reported saving an average of 10.5 percent of their income specifically for retirement. The average total amount of money dentists invested in various retirement plans increased with age and was highest for the 55 to 59 and the 60 to 64 years of age cohorts. The only exception was the 401(k) plan, in which the peak occurred in the 65 years of age and older cohort. CONCLUSIONS: Fifteen years ago most dentists retired between the ages of 60 and 69 years. Recent trends show that dentists are retiring at younger ages. This means that while in practice, dentists must save enough to support themselves for 20 or more years of retirement. PRACTICE IMPLICATIONS: The transition from private practice to retirement can be difficult. Therefore, planning for the future is important. Dentists can benefit from making appropriate decisions based on age, investment goals, risk tolerance, monetary constraints and time until retirement.

Adult↗
PubMed2000

Observations on achieving total practice success.

A doctor or group practice that understands the design of what the practice wants to be and develops a strategy to accomplish that end will invariably achieve a high level of performance. Performance areas in contemporary practice administration cover a wide area including growth, transition, and succession. Due to the wide and demanding areas in practice administration, it is important to address any practice planning effort in a comprehensive manner rather than a piecemeal approach. The foregoing will materially assist any practitioner to achieve the level of success they seek.

Humans↗