Medical practices are prime acquisition targets for health systems, private equity-backed platforms, and individual physicians. Whether you run a primary care practice, specialty clinic, or multi-physician group, understanding practice valuations is essential for succession planning.
How Medical Practices Are Valued
Medical practices are typically valued using a percentage of collections or a multiple of EBITDA/SDE, depending on practice size and structure.
Typical Medical Practice Valuation Multiples
Medical practices typically sell for 40-70% of annual collections or 3.0x to 5.0x EBITDA, depending on:
- Specialty type and reimbursement rates
- Payer mix and revenue cycle efficiency
- Active patient base and referral relationships
- Staff quality and operational systems
- Facility condition and equipment
What Drives Medical Practice Value
Buyers pay premium multiples for medical practices with:
- Strong collections - Efficient revenue cycle with high collection rates
- Diverse payer mix - Balance of commercial, Medicare, and other payers
- Established referral base - Strong relationships with referring physicians
- Quality staff - Experienced clinical and administrative team
- Modern EHR - Up-to-date electronic health records system
Common Value Detractors
These factors can lower your medical practice valuation:
- Heavy physician owner dependency
- Poor payer mix with high Medicaid percentage
- Aging patient demographics
- Outdated systems or pending compliance issues
- Key staff unlikely to stay through transition
What's your medical practice worth?
Get a free estimate using our valuation calculator. Takes about 60 seconds.
Calculate My ValuationPreparing Your Practice for Sale
To maximize your medical practice value:
- Optimize revenue cycle and reduce AR days
- Build relationships between patients and staff (not just you)
- Ensure compliance with healthcare regulations
- Invest in modern EHR and practice management systems
- Consider adding mid-level providers to reduce dependency
Healthcare continues to consolidate rapidly, with health systems and private equity actively acquiring independent practices. Practices with strong fundamentals, modern systems, and growth potential are particularly attractive targets.