Healthcare

The specialty pharmacy marketplace in the US has experienced rapid growth in recent years. The number of specialty pharmacies operating in the US has more than doubled since 2015. US expenditures for specialty drugs have also nearly doubled from $83 billion in 2013 to $157 billion in 2017. Combined with spending on orphan drugs, total US expenditures on specialty pharmaceuticals is now nearly equal the amount spent on traditional medications.^[1],[2]

Did your hospital’s outpatient department begin operations, expand its service lines or relocate after November 2, 2015?

Home healthcare enables many patients to receive appropriate medical attention from the comfort of home. Patients utilizing these services also enjoy considerable cost savings in comparison to a hospital setting, proven research of better health, and reduced stress for the patient and family. Home health agencies (HHAs) treat patients who may only require a short-term need for care, as well as patients who may need long-term treatment for illnesses such as diabetes, heart disease, and pulmonary disease.

Today’s urgent care center has become a highly regarded primary care delivery model, sought after by physicians, group practices, hospitals, and management companies because of its unique appeal to providers and patients and its prospects for continued profitability. With busy emergency rooms and longer wait times for primary care clinic appointments, the urgent care center (UCC) gives low-acuity patients a convenient option for affordable primary care. For physician groups, the UCC appeals to the suburban market segment and patients who prefer a no-appointment-necessary format and short wait time for minor injuries or illnesses. For hospitals, the UCC relieves expensive emergency departments and represents a primary care entry point into the system.

Two days into the 2015 Annual Meeting, two important fair market value (FMV) and commercial reasonableness (CR) issues stand out as worthy of emphasis, as they resonate in almost every discussion on hospital/physician deal compliance.

As a healthcare appraiser, one question I have heard many times over the years is “do I need to get a valuation?” Typically, the primary goal of a healthcare appraisal is to demonstrate due diligence around fair market value (FMV), so the question may be better stated as “what constitutes adequate FMV due diligence when contracting with physicians?”. While there is no universal answer to this question, there are some points worth considering that should factor into the decision.