Home | Insights | Articles

Health Plan Valuation Part 2: Methodologies and Special Considerations

A flurry of health plan transactions took place from 2013 to 2018; 105 plans entered the market and 104 were sold to a larger plan or ceased operations. The rapid pace of health plan acquisition or consolidation, especially for provider-sponsored health plans, is likely to continue.

In an environment of such significant M&A activity, plan owners need to determine an appropriate purchase price when acquiring or divesting a health plan. In this article, we explain how key assumptions affect a valuation, and describe the importance of reaching an achievable financial forecast.

Valuation Methodology

There are three health plan valuation methodologies.

The three methodologies can be used in combination or as a single approach. Each brings nuance to the valuation process, and we will address that further.


Read the Full Article


Related services

AUTHORS

Karen Kole

Principal

You Might Also Like

ARTICLES

Untangling the Provider Contracting Web

ARTICLES

Elizabeth Liebow on Five Things We Must Do to Improve the US Healthcare System

ARTICLES

Why Leadership Is the Missing Link in Patient Safety Reform