For businesses valued from $5M to $100M+
Considering selling your healthcare business?
Healthcare services businesses are underwritten on payor mix, provider retention and compliance history before anything else. Growth matters, but a compliance issue can end a process outright rather than simply repricing it.
- Payor mix
- Reimbursement trend
- Provider retention
- Referral concentration
- Credentialing and licensure
- Billing and coding
- Days in AR
- Patient volume trend
- Adjusted EBITDA add-backs
What healthcare buyers are actually underwriting
Diligence in healthcare is heavier than in almost any other sector we work in, and it starts earlier. Alongside a quality of earnings review, expect a regulatory and billing review, and expect it to be thorough.
Payor mix and reimbursement trend set the ceiling on value, because they determine how durable the revenue is. Provider retention sets the floor: if the clinicians can leave freely at closing, a buyer is purchasing very little, and will structure accordingly.
Compliance history is the one area where a finding does not simply lower the price. Buyers walk away from billing and coding problems they cannot size, which is why they are worth finding yourself, first.
What gets examined closely
- Payor mix across commercial, Medicare, Medicaid and self-pay
- Reimbursement rate history and contract terms with major payors
- Provider retention, employment agreements and enforceability of non-competes
- Referral source concentration and how much rests on a few relationships
- Credentialing, licensure and any survey or audit history
- Billing, coding and collections performance, including days in AR
- Corporate practice of medicine structure where it applies in your state
- Patient volume trend and capacity utilization
Who buys healthcare services businesses
Private equity platforms and their add-ons
Healthcare services platforms remain active but selective, and their diligence is heavier than a trades buyer's. They want provider retention locked down, clean billing, and a compliance record that survives an independent review.
Strategic acquirers
Health systems, larger provider groups and payor-aligned organizations buying capability, geography or referral relationships. A strategic buyer may care more about network fit than about the multiple, which occasionally works strongly in a seller's favor.
Which type of buyer suits you depends less on the multiple than on what you want afterward: a clean exit, a second bite through rollover equity, or a few more years running the business with someone else's balance sheet behind it. That is worth deciding before you go to market rather than during.
- Provider agreements without enforceable non-competesIf the clinicians can walk at closing, the buyer is purchasing very little and will price it that way
- Billing practices that will not survive reviewA coding finding discovered in diligence can end a process rather than simply reprice it
- Referral concentrationRevenue traced to one or two referring physicians is treated as at risk, whatever its history
Where healthcare owners lose value
Almost always in the same three places, listed alongside. None of them are inevitable, and all three are decided well before a letter of intent is signed.
An independent billing and coding review, run quietly a year ahead of a process, is the highest-value preparation available in this sector.
Request a confidential valuation.
An advisor who works in healthcare services will review your business and give you a real range.
- No cost, no obligation, strictly confidential
- Grounded in what buyers in your sector are paying now
- Useful whether you sell next year or in five