Practices value differently than most businesses — payer mix, patient base, and provider coverage all matter. Here's how it really works, and how to get a free, confidential valuation.
Practices don't follow the same rulebook as most small businesses. Smaller, single-provider practices are often valued as a percentage of trailing annual collections, while larger multi-provider groups are typically valued as a multiple of EBITDA.
Where you land depends heavily on payer mix, active patient count, and whether the practice can function without you personally seeing every patient. A dental or medical practice with associate coverage and a stable, growing patient base is a fundamentally more valuable asset than a one-doctor shop that closes when the owner is out.
These figures are industry rules of thumb, not appraisals — your actual valuation could land higher or lower than shown above depending on your specific collections, payer mix, and provider coverage.
If the practice closes whenever you're out, buyers heavily discount for transition and retention risk.
A shrinking or flat patient base signals future revenue risk that buyers price directly into a lower offer.
Aging technology becomes an immediate capital expense buyers subtract from your asking price.
A practice weighted heavily toward lower-reimbursement plans generates less value per patient than one with a stronger mix.
Smaller practices are often valued as a percentage of trailing collections, commonly 60% to 90% depending on specialty and payer mix. Larger practices are typically valued as a multiple of EBITDA, often 3x to 5x.
Yes, significantly. A practice with a strong ratio of insurance and cash-pay patients relative to Medicaid typically commands a higher valuation.
In most sales, the incoming provider or group takes over patient care with a transition period where the selling doctor introduces patients and eases the handoff, which buyers value highly for retention.
Heavy dependence on a single provider, declining new-patient flow, outdated equipment, and an unfavorable payer mix are the most common reasons a practice sells below its potential.
I'll review your collections, payer mix, and patient base to give you a real valuation range — completely confidential, no cost, no obligation.