Diagnostic Imaging Center Valuation

A diagnostic imaging center is a facility with the equipment to produce various types of radiologic and electromagnetic images. Imaging Centers include hospital outpatient departments that perform inpatient and outpatient imaging services, as well as independent diagnostic testing facilities. Imaging Centers provide services through various modalities each designed for specific diagnostic use. Magnetic resonance imaging (“MRI”), computed tomography (“CT”), positron emission tomography, mammography, ultrasound, and X-ray are common modalities. Imaging Centers may provide a single or multiple modalities.

Imaging Centers are typically valued for the sale to a management company and/or hospital buyer or for contribution to a joint venture. In some instances, a Diagnostic Imaging Center will be valued for individual physician investment.

Diagnostic Imaging Center Value Drivers

Determining the value of an Imaging Center poses unique challenges. The appraiser must understand many industry specific factors when valuing an Imaging Center. Key value drivers for Imaging Centers include, but are not limited to:

  • Reimbursement: Imaging Centers have experienced increasing reimbursement pressure from governmental payors. Understanding historical and expected reimbursement changes is critical to the valuation process.
  • Equipment and Capital Expenditures: A distinctive characteristic of Imaging Centers is the reliance on costly technology to deliver services. The equipment must be maintained, upgraded, and eventually replaced for an Imaging Center to sustain operations and remain competitive in the marketplace. Accurately valuing an Imaging Center requires a comprehensive review of the equipment base and the timing of capital expenditures and/or lease obligations.
  • Professional Services by Radiologists: In Imaging Centers that bill globally, radiologists are compensated for their professional reads of the imaging scans through professional services agreements (“PSA”). The PSAs can take on many structures and the ultimate payment to the radiologists impacts the profitability of the Imaging Center. The PSA arrangement must be understood and in some cases tested to determine if the payment is consistent with fair market value.

There are many unique items to consider in an Imaging Center valuation that necessitate a depth of knowledge and experience. VMG Health’s detailed experience with Imaging Center valuations gives you the confidence you need to complete your transaction. VMG Health has extensive experience in valuing Imaging Centers with over 300 valuations conducted in the last three years.

Relevant Publications

2021 Diagnostic Imaging Rate Changes: Impact & Outlook
COVID-19’s Impact on Imaging Operations and Valuations
Diagnostic Imaging Financial Due Diligence: 5 M&A Considerations
Radiology Groups: What to Consider When Selling Your Practice
Why are Radiology Practices Hot Targets?
Spotlight on Women’s Imaging Centers
Imaging Transaction Trends: Out With Acquisitions, In With Strategic Partnerships
Tomosynthesis: Does it Create Value for Your Imaging Center?
Impact of the Trends in Professional Reimbursement on the Valuation of a Freestanding Imaging Center
Sound Practices in Imaging Valuations: What a Realistic Buyer/Seller Would Do
Overcoming Reimbursement Hurdles for Single-Site and Multi-Platform Imaging Operators
Imaging Reimbursement: What We Knew Then & What We Know Now
Fair Market Value Versus Investment Value in Imaging: Understanding Standards
Imaging Center Valuation: What is Your Facility Worth?