If you own a Hospice & Geriatric practice in Ohio, the current market presents a significant opportunity. Ohio’s high hospice utilization rates and growing demand for geriatric care services create a favorable environment for practice owners considering a sale. This guide provides a direct look at the market, key valuation factors, and the steps involved in a successful transition. Navigating this landscape requires careful planning and a clear understanding of your practice’s value.
Market Overview
The market for Hospice and Geriatric care practices in Ohio is strong, driven by favorable demographics and high demand. As an owner, understanding these dynamics is the first step toward a successful sale.
Ohio’s High Utilization Rate
Ohio stands out nationally. In 2022, nearly 53% of Medicare decedents in the state were in hospice care at their time of death. This places Ohio 8th in the country and signals a mature, receptive market for the services you provide. Buyers, particularly larger strategic groups and private equity, recognize this established demand and are actively looking for well-run practices in the state.
National Growth and Investment
The Ohio market does not exist in a vacuum. Nationally, the hospice market is projected to grow steadily, with a compound annual growth rate (CAGR) of 4.61% expected through 2030. This growth attracts investment. We are seeing a notable increase in for-profit hospice buyers entering markets like Ohio, which changes the competitive landscape for independent practice owners.
Key Considerations
A strong market is only one part of the equation. Sophisticated buyers will look deep into your practice’s operations and regulatory standing. Your practice’s value is tied directly to how well you manage these core areas. Being prepared here is not just about passing due diligence. It is about demonstrating a low-risk, high-quality asset.
| Area of Focus | Why It Matters to a Buyer |
|---|---|
| Regulatory Compliance | Buyers need proof of clean licensing with the Ohio Dept. of Health (ODH) and adherence to all state and federal codes. Any issues here are major red flags. |
| Staffing & Expertise | A stable, qualified, and credentialed team is one of your most valuable assets. High turnover is a significant risk factor for a new owner. |
| Referral Sources | Diversified and consistent referral streams from hospitals, physicians, and facilities show a sustainable business model, not one reliant on a few key relationships. |
| Payer Mix | The breakdown of revenue from Medicare, Medicaid, and private insurance directly impacts financial projections and profitability. Buyers analyze this mix closely. |
Properly positioning these aspects of your practice requires a strategic approach long before you go to market.
Market Activity
While the broader healthcare M&A market saw a slower start to 2025, the underlying demand for hospice and geriatric practices remains robust. Buyers have become more selective. They are not just buying practices; they are buying quality and stability. Here is what we see happening in the market right now.
- A Flight to Quality. In a cautious market, buyers focus on acquiring the best assets. Practices with clean compliance records, stable staff, and strong financial performance are not just selling; they are commanding premium attention. Poorly prepared practices are being left behind.
- Focus on Integration. Larger buyers are looking for practices that can be easily integrated into their existing platforms. This means having clean financial records, modern EHR systems, and well-documented operational processes is more important than ever.
- Strategic Partnerships. Not every deal is a 100% sale. We are seeing more interest in flexible deal structures, like minority recapitalizations where you sell a portion of the practice but remain in a leadership role. This can provide a great outcome for owners who are not ready to fully retire.
The window of opportunity is open now for well-positioned practices.
The Sale Process
Selling your practice is a process, not a single event. Understanding the key stages can help you prepare and avoid common pitfalls. The journey typically begins with a confidential Valuation to understand what your practice is worth. This is followed by a Preparation phase, where we work with owners to organize financials and operational documents to present the business in the best possible light. Next, a confidential Marketing process is initiated to identify and engage a curated list of qualified buyers. Once offers are received and a partner is selected, the most intensive stage begins: Due Diligence. This is where the buyer verifies everything. Proper preparation is critical here, as this is where many deals fall apart. The final stage is Closing, where legal documents are signed and the transition is completed.
Valuation
Determining what your Hospice and Geriatric practice is worth is the most critical step in the sale process. While you may hear industry rules of thumb, like valuations around $60,000 per patient, a true valuation is far more nuanced. Sophisticated buyers don’t just buy your reported profits; they buy your future cash flow.
Calculating Your True Earnings
The starting point for any serious valuation is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not the profit you see on your tax return. It is a normalized figure that adds back owner-specific expenses like personal car leases or above-market salaries to show the practice’s true underlying profitability. Getting this number right is the foundation of a strong valuation.
Factors That Determine Your Multiple
Your Adjusted EBITDA is then multiplied by a number (the multiple) to determine the Enterprise Value. That multiple is not fixed. It changes based on risk and opportunity. Buyers will pay a higher multiple for practices that have:
* A diverse staff, reducing reliance on the owner.
* A strong history of growth in patient census.
* A healthy mix of payers that is not overly dependent on one source.
* A strong reputation and documented quality outcomes.
Post-Sale Considerations
The transaction is not the end of the story. Planning for what comes next is crucial for ensuring the sale meets your long-term personal and financial goals. A well-structured deal looks beyond the closing date. You should consider your role after the sale. Will you retire immediately or stay on for a transition period? What happens to your dedicated staff and the legacy you have built in the community? These elements can be protected through negotiation. Furthermore, the financial structure of the deal has lasting implications. Many transactions include an earnout, where a portion of the payment is tied to future performance, or rollover equity, where you retain a minority stake in the new, larger company. This gives you a “second bite at the apple” when the new entity is sold years later. Planning for these post-sale realities is a critical part of a successful transition.
Frequently Asked Questions
What makes Ohio a good market for selling a Hospice & Geriatric practice?
Ohio has one of the highest hospice utilization rates in the country, with nearly 53% of Medicare decedents receiving hospice care in 2022. This mature market, combined with growing demand for geriatric services, attracts strategic buyers and private equity looking for well-run practices.
What key factors do buyers look at when valuing a Hospice & Geriatric practice in Ohio?
Buyers focus on regulatory compliance, staffing stability and credentials, diversified referral sources, and payer mix. Practices that maintain clean licenses, a qualified team, multiple referral streams, and balanced revenue from Medicare, Medicaid, and private insurance command higher valuations.
How is the value of a Hospice & Geriatric practice determined?
Value is primarily based on Adjusted EBITDA, which normalizes earnings by adding back owner-specific expenses. This figure is multiplied by a valuation multiple that reflects the practice’s risk and opportunity profile, considering aspects like staff diversity, patient growth, payer mix, and reputation.
What does the sale process for a Hospice & Geriatric practice typically involve?
The sale process includes several stages: confidential valuation, preparation of financial/operational documents, targeted marketing to qualified buyers, due diligence to verify information, and closing with legal document signing. Proper preparation, especially for due diligence, is critical for success.
What post-sale considerations should practice owners plan for?
Owners should decide their post-sale role, whether to retire immediately or stay for a transition period, and consider staff and legacy protection. Financial deal structures may include earnouts or rollover equity, allowing owners to benefit from future performance or retain minority stakes in the new company.