How to Value a Hospice or Geriatric Practice: A 2025 Guide

Valuing a hospice or geriatric practice requires a different lens. Unlike other medical specialties, your value is tied just as much to your reputation, patient relationships, and regulatory standing as it is to your financials. Buyers look beyond simple revenue figures to understand the quality of your cash flow, the stability of your patient census, and your strategic position in the market.

Whether you are planning an exit, considering a partnership, or simply want to know what your life’s work is worth, understanding your valuation is the first step. This guide explains how sophisticated buyers will evaluate your practice.

The Foundation of Value: Adjusted EBITDA

The starting point for any serious valuation is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric removes owner-specific and one-time expenses to reveal the true profitability of your practice. For a detailed breakdown of the components, you can explore our EBITDA Explained for Physicians page.

Common adjustments for a hospice or geriatric practice include:

• Owner Salary: Adjusting the owner’s compensation to a fair market rate for a non-owner medical director or manager.
• Discretionary Spending: Adding back personal expenses run through the business, such as vehicle leases or family travel.
• One-Time Costs: Normalizing for unusual expenses, like a legal settlement or a major, non-recurring equipment purchase.

Example in Practice:

A geriatric practice reports $600,000 in net income. The owner pays himself $400,000, while the market rate for a medical director is $250,000. They also had a one-time $50,000 software upgrade.

• Reported Income: $600,000
• Add Back Salary Difference: +$150,000
• Add Back One-Time Software Cost: +$50,000
• Adjusted EBITDA: $800,000

Getting this number right is essential, as even small miscalculations can change the final valuation by hundreds of thousands of dollars. For a deeper look at this process, see our EBITDA Normalization Guide.

Determining Your Practice’s Multiple

Once you establish Adjusted EBITDA, the next step is to apply a valuation multiple. This is where industry specifics become very important. A higher-quality practice with lower risk will command a higher multiple.

Typical Valuation Multiples for Hospice & Geriatric Practices (2025)

Adjusted EBITDA	Typical Multiple Range
Under $1M	4.0x – 6.0x
$1M – $3M	5.5x – 7.5x
Over $3M (Platform Level)	7.0x – 10.0x+

These ranges are dynamic and depend on several factors. You can learn more about how different specialties compare on our Valuation Multiples by Medical Specialty page.

Key Factors Influencing Your Multiple

• Patient Census & Payor Mix: A stable or growing patient census with a favorable mix of Medicare, Medicaid, and private insurance is highly attractive.
• Referral Sources: Diversified and loyal referral networks (from hospitals, ALFs, physician groups) reduce risk. Over-reliance on a single source is a major concern for buyers.
• Regulatory Standing: A clean compliance record and, where applicable, a valuable Certificate of Need (CON) can significantly increase your multiple.
• Staff & Clinical Leadership: A strong team that can operate without the owner’s daily involvement makes the practice a more turnkey acquisition.

Beyond the Numbers: Special Value Drivers

Sophisticated buyers and private equity firms are interested in more than just a financial profile; they are buying a strategic asset. Your intangible assets are a large part of that value.

“A practice is more than its revenue; it’s a blend of tangible and intangible assets that must be carefully assessed…our experts analyze financial health, market trends, and asset values to deliver comprehensive valuations.”

These intangibles include:

• Certificate of Need (CON): In states with CON laws, your license to operate is a powerful barrier to entry for competitors and a major value driver.
• Brand Reputation: Your standing in the community and with local healthcare systems is a form of goodwill that directly impacts patient referrals and retention.
• Clinical Protocols: Well-documented, efficient, and effective care protocols demonstrate a mature and well-run organization.

From Enterprise Value to Your Net Proceeds

The valuation multiple applied to your Adjusted EBITDA gives you the Enterprise Value (EV) of your practice. This represents the total value of the business. To find what you will personally receive, you must make a few final calculations.

Enterprise Value – Debt – Transaction Fees = Seller’s Net Proceeds

• Debt: Any outstanding business loans, equipment leases, or lines of credit are typically paid off from the sale proceeds.
• Transaction Fees: These include fees for M&A advisors and legal counsel. You can find more detail on our page about M&A advisor fee structures.
• Working Capital: A target for working capital is usually set, and any surplus or deficit at closing can adjust the final amount.

Secure Your Future

Understanding your practice’s value is the foundation of a strong transition strategy. The process is detailed, and a competitive sale process is key to realizing the full worth of the business you have built. An expert advisor can protect your interests and guide you through every step.

Curious about what your practice might be worth in today’s market? Request a Complimentary Value Estimate →