Florida Doctor

FLDR Spring 2017

Issue link: http://issues.floridadoctormag.com/i/822762

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S P R I N G 2 0 1 7 25 salary paid to employees during their training period, which can also vary de- pending on the skills and qualification re- quired by the position, is also considered. e summation of these costs, which are necessary to build a productive workforce, can be included as an intangible asset in the Asset (Cost) Approach. A medical record, though commonly identified as an intangible asset, is perhaps more rightfully defined as a tangible asset. is is due to the fact that medical records do not generally have value beyond the tangible cost to replicate (i.e. copy) the paper and images contained therein. Moreover, medical records cannot be bought or sold in a commercial transac- tion and the privacy and security of the data is heavily regulated through HIPAA. e information contained in the medical record is actually owned by the patient, and the practice has something more akin to custodianship. In the event of a fully implemented and successful electronic medical records system ("EMR"), there may be a case for intangible value. is is due to regulatory directives that require the transition to EMR, and all things equal, a practice that has gone through this process will have already incurred the implementation and training costs associated thereto (i.e., the buyer has cost avoidance). With acquisition activity showing no sign of slowing down, it is important to understand the approaches and consid- erations appraisers utilize when valuing physician practices. Just as a successful practice is predicated on providing excel- lent care for patients, an excellent appraiser should take similar care when determining the value of your business.

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