Top Five Mistakes When Valuing a Health System Department
This Bulletin is brought to you by AHLA’s Business Law and Governance Practice.
- March 25, 2024
- Karen Kole , ECG Management Consultants
- Jake Poklop , ECG Management Consultants
Inflation and high interest rates continued to negatively impact hospital net income in 2023, forcing hospital systems to further assess their business portfolio for cost-saving opportunities. As a result, capabilities and facilities that were acquired by hospitals over the last 10 to 20 years to increase their service offerings—such as long term care, home health, rehabilitation, nursing, hospice, diagnostic laboratories, and physician practices—are now being divested. These transactions typically involve either a full sale or the formation of a joint venture where a portion of the business is sold, both of which generate additional cash for the hospital to invest in other areas.
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