Hospital Appraisals – How to Value the Hospital Assets

Hospital Appraisals

This article describes a general approach to valuation of hospital assets. Values depend on age, condition, specific OEM model numbers, and a host of other factors. This article describes a general approach to valuation, and discusses some asset values, but the specific equipment and model numbers must be individually researched and analyzed.

Types of Healthcare Facilities

Healthcare facilities come in many forms:

  • Hospitals
  • Imaging Centers
  • Cancer Centers
  • Dialysis Centers
  • Cardiology Practices
  • Internal Medicine Practices
  • Family Medicine Offices
  • Dentistry Practices
  • Laboratories
  • Ophthalmology Practices
  • Physical Therapy Centers

The hospital is the most general and comprehensive healthcare facility, providing a wide range of medical services to patients. The hospital will generally have most of the other “types” as departments – cardiology department, imaging, etc. The other entities are specialized practices and centers which serve specific needs in the healthcare delivery model.

Hospital – Equipment

Hospital machinery and equipment is generally organized and classified by department with a wide variety of departments in use at most hospitals. Most of the money spent on equipment in a hospital is not on machines such as x-rays but on disposables and consumables. However, the equipment which is of value, including collateral value, includes the equipment in the following departments:

  • Imaging
  • Emergency medicine
  • Cardiology
  • Operating rooms
  • Intensive care unit
  • Pathology
  • Laboratory
  • Beds, stretchers, FF&E
  • Specialty departments: dermatology, ob gyn, hematology, bariatrics, etc.

Imaging Department

The most expensive and highest value equipment in the hospital is typically in the imaging department:

  • Magnetic Resonance Imaging “MRI”
  • Computerized Tomography “CT Scanner”
  • Ultrasound
  • X-Ray, C-Arm
  • Flouroscopy
  • Echocardiography
  • Positron Emission Tomography “PET Scanner”
  • SPECT Scanner

Much of this equipment has a useful life of 7-10 years in primary service, but most are used longer in practice. Valuation of this equipment by appraisal must consider the three primary approaches to value: the income approach, the cost approach, and the sales comparison approach. The income approach considers reimbursement rates, the fees approved by CMS which are a big portion of the income of imaging centers at hospitals and standalone. Calculations can be done using the average reimbursement rate and average fees multiplied by the utilization rate of, say, the CT scanner being appraised. But the most common and straightforward approach to valuation is the market sales comparison approach. If a Philips Brilliance 64 CT scanner has 20 current market sales listings for $175,000, and 10 recent auction  results for an average auction  price of $120,000, then a reasonable estimate for the current FMV of this scanner is $150,000. Care must be taken to compare like-for-like assets, considering variables like condition, lifetime scans or MAS usage, and age. There are multiple resources which can be used to gather market sales data, including the active website marketplaces and, but it is important to work with knowledgeable brokers to determine reasonable market values.

Beds, Stretchers, FF&E

Beds and stretchers are some of the longest lived assets in the hospital, with useful lives of 15-20 years or more. Examination of current sales listings and auction results often  show FMV values of 50% of original price after 7-10 years for leading OEMs stretchers such as Stryker.

Other hospital FF&E includes a wide range of tables, exam chairs, cabinets, blanket warmers, refrigerators, and accessories. Some Steris blanket warmers have good residual values, 50% or more after 5-7 years, as do many refrigerators. Assorted tables, chairs, and cabinets have lower value, and often sell for $10 – $20 at auction.

Operating Room

OR tables are some of the most valuable assets in the hospital, with prices for new OR tables often exceeding $100,000. Major manufacturers include Berchtold, Skytron, Stryker, and Shampaine. Used OR tables can sell for $50,000 or more after 3-5 years.

Other assets in the OR include anesthesia machines, ventilators, C-arm x-ray machines, patient monitors, microscopes. All of these assets have reasonable residual values, often over 50% of cost after 3-5 years.

Hospitals have a lot of high value equipment, from CT scanners and MRIs in the imaging center, to OR beds, rad rooms, and C-arms in the specialty areas. Hospitals are also equipped with an enormous quantity of FF&E assets, tables, exam chairs, cabinets, and furniture, much of which sells for $5 or $10 at auction. It is important to carefully inventory all assets to get a good idea of collateral value.

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