After 20 years of providing valuation services, I’ve concluded that no two pathology services agreements are exactly alike. In one, the hospital is buying a basket of professional services from a pathology group. In another, the hospital is buying a different basket of professional services while also selling something to the group. It’s like a Rubik’s Cube with a zillion different possible combinations. As a result, when valuing pathology services, an appraiser must first figure out who is buying what basket from whom. The second step is to determine what exactly is in those baskets—especially the big basket marked “PART A SERVICES.”
To help keep things clear, I recommend that the valuation deliverable include a detailed summary describing the services being provided under the agreement. The summary should include information about who is providing the services, the time and effort involved, and any sources of reimbursement for the services. Download the infographic for more details.