Spectrum Health Partners (SHP) transactional experience in the healthcare field adds enormous value in the decision process at those key moments when the correct application of due diligence principles ultimately defines organizational success or failure. Whether SHP provides a turnkey due Spectrum Health Partners (SHP) transactional experience in the healthcare field adds enormous value in the decision process at those key moments when the correct application of due diligence principle ultimately defines organizational success or failure. Whether SHP provides a turn-key due diligence solution to a proposed acquisition or supports an ongoing transaction through advisory services such as deal point negotiation or calculation of final net working capital/settlement, our operational depth and financial understanding bring critical insights few firms will match.
SCOPE OF SERVICES
QUALITY OF EARNINGS: Evaluate the target’s revenue (emphasis on payor contract efficiency). Assess the quality of a target’s earnings (Q of E), to include the identification and quantification of non-recurring, out-of-period, non-cash, or other items that factor into EBITDA (perform Cash to Net Revenue analysis to support Run Rate).
PNWC AND FNWC: Calculate both pre-transaction Preliminary Net Working Capital (PNWC) and Final Net Working Capital (FNWC) through Settlement. Understand and document the targets’ balance sheet to validate assets and ensure that liabilities are stated properly through Settlement
CONTRACT REVIEW: In conjunction with legal representatives, complete a thorough contract review to determine which contracts to assume or not assume by Buyer (Operational/Physician/Payor/Leases).
BUSINESS DRIVERS: Identify significant business drivers/trends that impact the business either positively or negatively in anticipation of these and other drivers/trends continuing in the future.
FINANCIAL STAFF AND SYSTEMS: Evaluate the quality of a target’s financial staff (including Revenue Cycle), financial reporting, internal controls and systems utilized to accumulate financial data.
INFORMATION SYSTEMS: Evaluate system effectiveness to provide ongoing KPI reporting and meet future demands (HITECH monitoring and reporting).
OPERATIONAL REVIEWS: Perform in-depth reviews of key departments including management, staff and Contribution Margin analysis of those departments.
STRATEGIC PLANNING AND BOARD GUIDANCE: Develop a strategic planning process to define the best long-term alternative solution for an organization. Provide Board guidance to ensure the best outcome and reporting mechanisms to assure organization stays on track or quickly identifies changes in direction required to meet market demand.
OPENING BALANCE SHEET (OBS): For completed acquisitions, establish the OBS setup. Establish ongoing reconciliation process and audit schedule.
INTEGRATION: With our experience gained by managing over 180 transactions, we are able to perform operational and financial integration of the acquisition to the Buyer’s organization.
PHYSICIAN GAP ANALYSIS: Determine recruitment needs based on Strategic Plan goals.
HOW TO GET THE DEAL DONE
Number of Successful Hospital Transactions Completed by State
| State | Hospitals | Total Beds | Physician Groups Included |
|---|---|---|---|
| Pennsylvania | 16 | 2,370 | yes |
| Texas | 13 | 2,563 | yes |
| Tennessee | 11 | 1,500 | yes |
| Indiana | 10 | 301 | yes |
| Arkansas | 8 | 273 | yes |
| Alabama | 7 | 1,590 | yes |
| Illinois | 7 | 1,225 | yes |
| California | 4 | 759 | no |
| Ohio | 4 | 891 | yes |
| New Mexico | 3 | 485 | yes |
| Oklahoma | 3 | 518 | yes |
| South Carolina | 3 | 751 | yes |
| West Virginia | 3 | 387 | yes |
| Arizona | 2 | 444 | yes |
| Louisiana | 2 | 247 | no |
| Mississippi | 2 | 552 | yes |
| Washington | 2 | 511 | yes |
| Others | 8 | 1,198 | no |
| Total | 133 | 18,187 | |
| State | Hospitals | Total Beds | Physician Groups Included |
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