Best Practices for Using Compensation Survey Data

When using compensation benchmark data from organizations like MGMA (Medical Group Management Association), AMGA (American Medical Group Association), or SullivanCotter, it’s crucial to adhere to best practices and guidelines to ensure accurate interpretation and application. Here are some key considerations:  Use the median: Using the median benchmark is recommended instead of the mean since the […]

Trends in Physician Practice Acquisitions & Valuation Multiples

Throughout the nation, independent physician practices are increasingly being acquired by hospitals, private equity investors, insurance companies, and other larger organizations. According to the American Medical Association, the proportion of physicians working in private practices or those solely owned by physicians declined by 13% between 2012 and 2022 — dropping from 60.1% to 46.7%. Meanwhile, […]

Consequences of Ban on Physician Non-Compete Agreement

What will be the consequences if the ban on non-compete agreements sticks?  Here’s my assessment.  Initially, the ban on non-competes will obviously increase competition for provider positions.  Fundamentally, prices tend to decrease when competition increases in a particular market. An increase in competition in most markets for products or services generally means there are new entrants into […]

Consequences of PE Investment in Medical Practices

It’s no secret that private equity (PE) firms have made a sizable investment in physician practices over the past 10+ years. The practice specialties that have been the focus of PE investments include primary care, dermatology, obstetrics-gynecology, gastroenterology, ophthalmology, oncology, urology, radiology, orthopedics, and cardiology.  During the period of January 2012 and December 2021, dermatology […]

Is FMV More Important Than CR

Frequently, HVG is asked to provide its FMV opinion, but not a commercial reasonableness (CR) opinion. We don’t include one if the client doesn’t specifically ask for a CR opinion. However, HVG has been paying more attention to the CR aspects of an arrangement and is now giving CR more relevance by adding additional support […]

Not All HCPs are KOLs

Are you paying your HCPs an appropriate rate?  According to AdvaMed’s Code of Ethics and PhRMA’s Code on Interactions with Health Care Professionals, life sciences companies should select HCPs who serve as consultants/advisors according to a number of criteria, such as (but not limited to): specialty years of experience location, practice setting clinical research experience […]

Industry Snapshot: Behavioral Health Services

Workforce Challenge: The behavioral health sector is currently grappling with a workforce crisis, intensified by surging demand and competition from telehealth providers. The shortage of clinical providers, exacerbated by an aging workforce, poses a significant challenge. In response, healthcare systems are adopting various strategies, including creating pipelines for specialists through training programs, offering financial incentives […]

FMV of a PSA

A Professional Services Agreement (PSA) is a common arrangement that typically needs a third-party FMV opinion.  At HVG, we’ve seen a couple of different assumptions or postures, if you will, with regard to how to properly estimate the FMV of a PSA.  One assumption/view is what I refer to as productivity agnostic. This is where […]

MSO fees with a Tradename Licensing Fee

It’s not uncommon to see an MSO fee that includes some fee for the use of a popular tradename or trademark. A tradename/trademark is considered intellectual property (IP) and a royalty rate is typically associated with IP.  A tradename/trademark royalty is a fee paid by the licensee to the licensor in exchange for the use of […]

FMV of Digital Healthcare Leads

It’s not uncommon for healthcare service providers (e.g., telemedicine) and healthcare product vendors (e.g., DMEs) to partner or contract with other third-party healthcare portals/websites.  There are a myriad of websites that attract potential patients who are researching symptoms, conditions, providers, medications, tests, and healthcare-related products (e.g., WebMD.com or Healthline.com).  HVG is seeing arrangements where healthcare […]

Ambulatory Surgery Centers: Industry Snapshot

Over the past decade, ambulatory surgical centers (ASCs) have gained traction in the outpatient market. These centers continue to perform more than half of all U.S. outpatient surgical procedures and can expect to see greater volumes as the number of outpatient procedures increases by an estimated 15% by 2028. According to the Fortune Business Insights […]

Are Your Speaker Programs FMV Compliant?

Before estimating an FMV rate for physician speakers or even advisors and consultants, it’s imperative that each particular HCP be properly assessed and ranked into an appropriate tier. PhRMA and AdvaMed have recommended a set of criteria and qualifications for selecting an HCP.  HVG has developed its own proprietary HCP Tiering Algo, which ranks an […]