When municipal or state governments exercise eminent domain—the power to acquire private property for public use—land and buildings or residential homes often come to mind. Yet this may also involve healthcare facilities such as hospitals, physician practices, surgery centers, or diagnostic facilities. These businesses are highly complex and involve many moving parts. Getting the valuation wrong can lead to disputes that could last years. 

In August 2025, Massachusetts finalized a $66M settlement tied to its eminent domain takeover of St. Elizabeth’s Medical Center’s Brighton Campus. This price is nearly 15 times higher than the state’s originally offered $4.5M last year. The state seized the hospital in September 2024 to ensure continued operations amid Steward Health’s financial collapse, transferring it to Boston Medical Center. 

This dispute over fair value highlights the complexity of healthcare valuation: Unlike other properties, healthcare organizations carry distinct financial, regulatory, and operational considerations that require specialized expertise for accurate valuation. 

Without a proper valuation: 

  • Owners risk receiving compensation that doesn’t reflect the true economic value of their enterprise. 
  • Governments risk overpaying taxpayers’ dollars or facing prolonged litigation. 
  • Both sides risk years of disputes, appeals, litigation costs, and uncertainty. 

Healthcare businesses have unique complexities: 

  • Regulatory Compliance: Stark Law, Anti-Kickback Statute, and other federal and state regulations affect value. 
  • Reimbursement Trends: Medicare, Medicaid, and commercial payers drive future revenue in ways specific to healthcare. 
  • Goodwill: Physicians may have personal goodwill in their medical practices—such as physician-patient relationships and reputation—that may be specifically relevant for eminent domain matters. 
  • Non-Competes & Buy-In/Buy-Out Agreements: Existing contracts may limit or enhance the business’ transferable value. 

Courts and regulators generally rely on fair market value* (FMV): what a willing buyer would pay a willing seller in an arm’s-length transaction. Disputes may arise if owners focus on investment value (what it’s worth to them personally), while the law requires FMV. They may also arise if there is an inconsistent application of valuation standards, which may result in two experts presenting drastically different figures in court. The eminent domain settlement involving St. Elizabeth’s Medical Center illustrates how high the stakes can be, with state officials and stakeholders grappling over competing valuations that directly impact the hospital’s future. 

Eminent domain doesn’t just affect land or real estate—it may also impact livelihoods, stakeholders, practices, hospitals and other healthcare providers, and their delivery of care services. For healthcare businesses, getting the valuation right is essential.  

When valuation disputes arise in eminent domain or other healthcare transactions, having a defensible, well-supported opinion can make all the difference. Partner with VMG Health for independent fair market value analyses and expert testimony to help clients navigate complex healthcare matters with clarity and confidence.

*Disclaimer: VMG Health is not a law firm and does not offer legal advice. The information contained in this article is for general purposes only and should not be used as legal advice or as a substitute for consultation with qualified legal counsel.