Navigating the unique market of New York requires a clear strategy. This guide provides insight into the current landscape, from valuation to post-sale planning, helping you prepare for a successful transition.
The market for hospice and geriatric care is expanding rapidly, with national projections showing significant growth. For practice owners in New York City, this presents a unique opportunity. However, navigating a sale requires more than good timing. You must also understand complex state regulations and shifting M&A trends. This guide offers a clear view of the current landscape, helping you understand the key factors that will define your practice’s transition.
Riding the Wave of a Growing Market
The demand for hospice and geriatric care across the U.S. has never been stronger. An aging population and greater acceptance of hospice services have created a robust market. Medicare spending on hospice care reflects this, growing from just over $2 billion in 1998 to nearly $24 billion in recent years. This national trend provides a strong foundation for practice valuations and attracts significant buyer interest. For many owners, this signals a prime opportunity to consider a sale.
The New York Regulatory Factor
While national trends are favorable, the story in New York City has an important twist. State lawmakers have actively worked to limit the expansion of for-profit hospice providers. This creates a unique dynamic for practice owners. It can affect the pool of potential buyers and the types of deal structures available to you. Understanding how this legislation impacts your specific practice is not just an advantage. It is a necessity for a successful sale.
When preparing to sell your practice in New York City, your focus must extend beyond financials. Buyers will perform deep diligence on your operational and regulatory standing. This means having your documentation for New York State Department of Health (DOHMH) requirements in perfect order, especially for employee health and infection control. Furthermore, any prospective buyer will scrutinize your Certificate of Need status and your compliance with both Medicare and New York State Medicaid hospice election rules. These are not just boxes to check. They are foundational elements that can either build or break a deal. A clean compliance record is one of your most valuable assets.
Positioning for a Favorable Market
Understanding current M&A activity is key to timing your exit. While the broader healthcare market has been cooler for the past two years, the outlook for hospice is different. Here is what we are seeing.
- The Market is Shifting. After a period of fewer transactions, signs point toward a resurgence in hospice and geriatric practice acquisitions. We expect activity to increase significantly toward the end of 2025 and into 2026.
- Buyers are Preparing Now. Sophisticated buyers, including private equity and strategic health systems, are building their pipelines. They are identifying strong, well-run practices today for acquisitions they plan to make tomorrow.
- Preparation is Everything. The time to prepare for that market is now. Buyers pay for proven performance, not future potential. Starting the process of organizing financials and compliance documents 12-24 months ahead of a sale allows you to enter the market from a position of strength, not haste.
A successful practice sale is not an event. It is a process. It begins long before your practice is presented to buyers, starting with a deep dive into your operations and financials to understand their true performance. This is where we go beyond the surface to prepare a story that resonates with sophisticated acquirers. We then run a confidential, structured marketing process designed to create competitive tension among a curated list of qualified buyers. This avoids the common mistake of reacting to a single, unsolicited offer. Finally, we provide hands-on support through the rigorous due diligence phase, managing the flow of information to prevent surprises and keep the transaction on track toward a successful closing.
What is Your Practice Truly Worth?
Many practice owners undervalue their business because they look at net income instead of the metric that buyers use: Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is then “adjusted” to add back owner perks and normalize expenses to reflect the practice’s true cash flow. That Adjusted EBITDA figure is then multiplied by a number (the multiple) to determine your practice’s enterprise value. While a solo practice might get a 4x multiple, a multi-provider practice with diverse referral sources could command 7x or more. The multiple is not arbitrary. It is based on specific risk and growth factors.
| Factor | Lower Multiple (Lower Value) | Higher Multiple (Higher Value) |
|---|---|---|
| Provider Base | 100% owner-dependent | Associate-driven with multiple providers |
| Referral Sources | Reliant on 1-2 key sources | Diverse, stable referral network |
| Compliance | Some documentation gaps | Immaculate, audit-ready records |
| Growth | Flat patient census | Documented history of steady growth |
The structure of your deal is just as important as the final price. For many owners, selling does not mean walking away completely. If continued involvement is your goal, a deal can be structured to include an equity rollover, where you retain a stake in the new, larger company. This allows you to benefit from future growth and a potential “second bite of the apple” when the new entity is sold again. For others, a structured earnout can help bridge valuation gaps while ensuring a smooth transition. The right structure protects your financial future, secures your legacy, and provides continuity for your trusted staff and patients. It transforms the sale from a simple transaction into a strategic next step.
Frequently Asked Questions
What are the current market trends for selling a Hospice & Geriatric practice in New York City?
The market for hospice and geriatric care is rapidly expanding with significant growth projections nationally. Despite a cooler broader healthcare M&A market in recent years, the hospice sector in New York City is expected to see increased acquisition activity towards the end of 2025 and into 2026, driven by private equity and strategic health systems preparing their acquisition pipelines.
How do New York state regulations affect the sale of a hospice and geriatric practice?
New York State laws actively limit the expansion of for-profit hospice providers, impacting the pool of potential buyers and deal structures. Sellers must have impeccable compliance with New York Department of Health requirements, including employee health and infection control documentation, Certificate of Need status, and adherence to Medicare and Medicaid hospice election rules to ensure a successful sale.
What financial metric is most important to buyers when valuing a hospice and geriatric practice?
Buyers primarily look at Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) adjusted for owner perks and normalized expenses to reflect true cash flow. This figure is multiplied by a multiple that varies based on factors such as provider base, referral sources, compliance, and growth history to determine the enterprise value.
What preparations should I make before selling my practice to get the best valuation?
Preparation should begin 12-24 months in advance, focusing on organizing financials and compliance documents. Having audit-ready records, diverse referral sources, a growing patient census, and associate-driven providers can significantly increase valuation multiples. Early and thorough preparation positions your practice strongly for competitive buyer bids.
Can I remain involved in my practice after selling it in New York City?
Yes, deal structures can accommodate continued involvement, such as through an equity rollover allowing you to retain a stake in the larger company or a structured earnout. These options enable participation in future growth, secure your financial future, and ensure continuity for your staff and patients, making the sale a strategic transition rather than a simple exit.