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Doody's Review ServiceReviewer: Ruth E. Booher, JD (Medical College of Wisconsin)
Description: This is a handbook for those considering a practice acquisition. It includes multiple appendices and a diskette with sample valuations to provide further guidance.
Purpose: As in other industries, physicians and hospital and clinic administrators are seeking to realize value by increasing practices through acquisitions. The value has been elusive for various reasons and wise buyers are reconsidering how to evaluate target practices. This book is intended to help a buyer evaluate a practice.
Audience: There are generally three audiences for a book on valuation: the seller, the buyer, and the professional appraiser. Generally, the author addresses buyers, namely hospital and clinic administrators.
Features: On some points, the author covers his subject in great detail with confusing results, while at other times he skims over complex but important points, hoping his reader will seek professional help. While he introduces many important concepts, he often fails to take the reader from the concept to its application. His illustrations are difficult to understand and fail to identify sources for the numbers, whether from the financial records of the targeted practice, from a calculation based on such source information, or from general market information. The spreadsheets include too few formulas to make them useful.
Assessment: The book reads like a cocktail party discussion, too much background noise and not enough usable information. Readers may enjoy being told that "it is a 'royal pain' to get good data." After reading this book, however, they probably will not be able to "perform a basic appraisal" or develop a "range of ballpark values" upon which they would want to recommend a purchase price for a physician practice. In my opinion, the book fails to meet its objective.