Question

Topic: Strategy

Value Creation Measuring Method

Posted by Anonymous on 6/18/2005 at 6:08 AM ET 250 Points
I try to identify the value of intangible assets in healtcare but I do not have great financial resources for expensive software. Is there an easy method to use in small healthcare organizations?
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  • Posted by michael on 6/18/2005 at 10:53 AM Member
    Easy, no. Simple, yes.

    You obviously have a good understanding how to determine the value. You can pretty easily set up a model using an excel spreadsheet. Obviously you want to make the presentation look nicer when you see your client.

    If for some reason you don't have that knowledge, start getting your hands on annual reports for larger healthcare organizations. They're usually available online. Then you can use those as benchmarks. It'll take you some time to see how they relate to revenue or patients or anyother item the CEO looks at.

    As long as you have basic knowledge of accounting principles, you should be able to get the information from their financial statements.

    Again, simple but not easy.

    Hope this helps.

    Michael
  • Posted by mgoodman on 6/19/2005 at 10:30 PM Accepted
    Valuing intangible assets is never easy ... healthcare or anywhere else.

    The only real way is to look at what businesses/practices actually sell for when a willing buyer and seller agree on a price. Then subtract the tangible asset value from the selling price, and what's left are the intangibles (in aggregate).

    If you look at enough of these cases, you'll be able to start looking at ratios ... average value of a patient, etc.

    This is the only way I know of to put hard numbers to soft assets. Everything else is just speculation.
  • Posted by adammjw on 6/20/2005 at 11:16 AM Accepted
    In my view mgoodman is really right.Looking at it from that perspective whatever customer retention rate you are getting over the period of a couple of years it gives you insight of what intangible values you are giving or failing to give to your customers.I'd say that's the best indication what's the value of your intangibles.

    Rgds

    Adam
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