Healthcare, Education & Personal Services · Buyer guide
Buying a Medical Practice business
Published · Reviewed by The Diligence Standard Team · Updated
a Medical Practice can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Provider production, payer mix, collections, credentialing, referral sources, staffing and compliance determine enterprise value beyond physician compensation.
Risks to test
- Owner-physician dependence
- Credentialing delays
- Payer concentration
- Billing/compliance
- Staff retention
- Referral concentration
Evidence to request and reconcile
- Provider production
- Payer/collections
- AR aging
- Credentialing
- Payroll/licenses
- Compliance/audit records
Decision questions
- What enterprise profit remains after physician market compensation?
- Which payers/referrals dominate?
- How long will credentialing take?
- What AR is collectible?
- Which providers must stay?