Capability
Clear support for the economics behind your management fee.
Management agreements can combine staffing, technology, finance, administration and other support in a single fee. Understanding whether that fee is reasonable starts with understanding what the arrangement actually provides.
Cabra Consulting evaluates the economics of management and administrative services arrangements for healthcare organizations, management services organizations and their advisors. The analysis connects the scope of services, operating responsibilities and fee structure with the financial support needed for the decision at hand.
A new agreement, a renewal or a change in the services provided can alter the economics of a management fee. An acquisition or joint venture may also introduce different responsibilities, scale or payment terms.
The work begins with the actual agreement rather than a fee percentage viewed in isolation. Defining what each party provides helps distinguish shared costs, practice-level responsibilities and the management company's economic role.
Cost allocation, responsibilities, scalability and comparability all affect the interpretation of a fee. A structure that supports one set of services may not support a different arrangement with different obligations.
An agreed scope may include an FMV opinion, financial analysis or comparison of fee alternatives, coordinated with the organization's legal and other advisors. The work translates the agreement's economics into clear financial and valuation support for decision-makers.
Start with the facts
Planning a new agreement or reviewing an existing management fee? Contact Cabra Consulting to discuss the arrangement, the decision you need to make and the support required.