ACOs: More Questions Than Answers

I just came across a new survey by an independent firm to assess healthcare organizations’ (mostly hospitals) understanding and preparation for the development of Accountable Care Organizations (ACO.) The respondents were 200+ CEOs, COOs, CFO, CIO and other “C” types. Very, very smart people. Guess what? They don’t have it figured out either. This particular survey had quite a bit of contradictory data. Although 90% of the respondents said they were in the ACO planning or development … [Read more...]

The “High Five” for a Successful Sale of Your Rehabilitation Business

This is a great time to examine your business in consideration of a potential sale or recapitalization. Acquisition activity in the rehab market has exploded nationally with deals totaling $236,890,000 in 2010, a 973% increase from 2009.  Based on our discussions and survey of industry buyers, this trend will continue through 2011. In our experience, great businesses sell for great prices and structures.  We have examined the dynamics of great companies, and overwhelmingly there are FIVE key … [Read more...]

How to Contract with Hospitals for Physical Therapy Services

In most states, hospital reimbursements are more favorable than those for outpatient therapy and are not under the Medicare Cap. This dynamic makes the time perfect for joining forces with hospitals as an option for growth. Hospital contracting is a growth strategy that could yield high profitability along with the added benefit of spending more time with your referring physicians. Hospitals usually have difficulties developing out-patient therapy clinics because they aren’t familiar with the … [Read more...]

Rehabilitation Practice Growth Strategy #1: Start-up Clinics

As an industry, rehabilitation practices continue to be challenged with shrinking reimbursements, physicians taking rehab in-house and regulatory pressures. Yet many rehabilitation practices continue to grow…why not you? Rehab business growth strategies typically include start-ups, acquisitions or contacts. If you have a great clinical product, have shown the ability to recruit and retain physical therapists and have strong operations, this may be a time to look at adding new clinics to your … [Read more...]

Valuation: How to Maximize Value in Your Rehabilitation Business

In previous posts, I talked about how business valuation simply comes down to an earning stream multiplied by a risk factor which, inversely related, becomes a multiple. The real question is “How do we maximize the value in our rehabilitation business?” If the three risk factors that determine the multiple are: size, earnings stream and referral risk, what we need to do is look at each and develop strategies on how we can reduce risk. Let’s focus on the earning stream. Previously … [Read more...]

Valuation of Rehabilitation Businesses: How Much is My Business Worth?

With the merger & acquisition activity in the rehabilitation industry continuing to heat up, the first step when considering some sort of exit strategy is a proper valuation of your rehabilitation practice. Business valuations are much more of an art than a science. Make sure that whomever values your business has experience in healthcare, more specifically, within the rehabilitation industry market. It would be to your advantage to work with someone who not only has valuation … [Read more...]