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Surgery Center ROI Questions

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  • Surgery Center ROI Questions

    I have been approached by an in network surgery center to purchase shares costing roughly 180K. I will have to take out a loan regardless. I wanted to see for an average profitable surgery center how many quarters it typically takes to breakeven. I remember someone telling me 10 quarters however if a center had a ROI of 25% that would mean 4 years? Maybe I am thinking about this incorrectly. The center in their first year made 40% but I expect the center to make closer to 25% in the years to follow. Thanks in advance!

  • #2
    After tax cash flows are all I'd look at and then see what return that is. Other threads have addressed the things that are important to look at in this regard. Buy-in, buy-outs, types of cases, ownership structure and future retirements, etc. Breakeven is a feel good number but meaningless compared to other metrics when evaluating an investment. ROI is probably being expressed here as return on equity in a given year. A real ROI is evaluated based on after tax cash flows over time, including buy-in and buy-out.

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    • #3
      Thanks for the info. Sorry this thread was posted twice by accident.

       

      I have reviewed the other threads and learned a fair amount of what to ask etc. I am getting all the data and numbers officially on the center monday so I will have more info then. It is a USPI center fyi.

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