Buying Physician Practice Medical Records - The Buyer's Decision Process

May 21, 2016

 

It used to be fairly common to discuss the value of a medical practice on a per chart basis. The practice's entire value was divided by the number of patient charts on the shelves - and that's how it was marketed and sold to potential buyers.

 

In today's world, there seems to be a lot of indecision about whether or not a buyer should even pay for medical records. Unless limited by law or other regulations, a buyer should identify and pay for assets (at a fair market value rate) that it wants to own post transaction. Not itemizing and providing consideration for an asset may cause confusion and problems between a buyer and a seller (especially if the seller works for the buyer) after the sale. 

 

Just how valuable a medical record is depends on many different factors. From the buyer's standpoint, the value of a medical record is often related to the time and money he or she saves by having access to it. Many times, the buyer plans to convert the old system to a new system after the deal is done. But that doesn't mean the legacy system isn't valuable.

 

Needless to say, the decision process that a buyer uses to determine when and what it should pay for medical records can be complex, and old rules-of-thumb for medical records valuations are rarely applicable.

 

The infographic below summarizes some of the decisions that buyers have to make and the variables (paper versus electronic; cloud versus server; subscription versus perpetual license) that must be considered when determining the fair market value of medical records.         

 

 

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