Selling your Hospice and Geriatric practice in Oregon presents a unique situation. The demand for hospice care is strong, with nearly half of Medicare decedents in the state utilizing these services. However, the market is also facing major regulatory shifts that will impact who can buy your practice and how a deal is structured. This guide provides a clear overview of the current market, valuation principles, and what you need to know to navigate a successful sale.
Market Overview
The market for hospice and geriatric care in Oregon is robust and growing. A significant portion of the population relies on these services, and this is supported by substantial Medicare investment. This creates a favorable environment for practice owners considering a sale. Buyers, particularly larger, well-funded groups, are actively looking for established practices with strong community ties and a record of quality care.
Three key factors are driving this market:
- Consistent Demand: Nearly half of all Medicare patients in Oregon who pass away do so under hospice care. This shows a stable and predictable need for your services.
- Increased Investment: National Medicare spending on hospice has grown over tenfold since 1998, reaching $23.7 billion. This financial commitment signals a stable and valuable industry.
- For-Profit Growth: The sector is seeing a rise in for-profit ownership, bringing new types of buyers and investment into the market. This can create more opportunities for a practice sale.
Key Considerations
While the market is strong, selling a hospice practice in Oregon requires careful planning around some very specific issues. Your success will depend on how well you prepare for these challenges.
Navigating Oregon’s New Ownership Law
The most significant factor is the new law, SB 951, which takes effect in 2025. It requires that healthcare practices be at least 51% owned by licensed medical professionals in the state. This dramatically changes the landscape for buyers, especially those backed by private equity. You must have a clear strategy for how your practice can be sold in compliance with this rule. It is a complex issue where professional guidance is no longer a luxury. It is a necessity.
Proving Your Practice’s Strength
Beyond the new law, buyers will look closely at the core strengths of your practice. You need to prepare to showcase your strong referral network with local hospitals and facilities, the experience of your clinical team, and your history of regulatory compliance. A solid reputation for quality care is one of your most valuable assets.
Market Activity
Transaction activity in the healthcare space continues, but buyers are becoming more selective. In Oregon’s hospice sector, the focus is shifting. Buyers are not just looking for revenue. They are looking for high-quality, compliant, and well-run operations that can withstand regulatory scrutiny.
Many owners we speak with think about selling in 2-3 years. That is exactly the right time to start preparing. Buyers pay for proven performance, not just potential. The work you do now to professionalize your operations and document your value will directly impact your final sale price. The market rewards preparation.
Here is how buyer priorities are evolving:
| Old Focus | New Focus |
|---|---|
| Revenue Growth Alone | Sustainable, Compliant Operations |
| Basic Financials | Clean, Audited Financials & Adjusted EBITDA |
| Any Buyer | A Buyer Compliant with SB 951 |
| Potential for Quality | Documented Patient Satisfaction |
The Sale Process
Selling your practice is not a single event. It is a multi-stage process that requires careful management from start to finish. While every sale is unique, most follow a similar path.
Here are the 5 main stages you can expect:
- Preparation and Valuation. This is the foundational step. We help you gather your financial and operational documents and determine a realistic market value for your practice based on true profitability, not just reported income.
- Confidential Marketing. We identify and approach a curated list of qualified buyers without publicly listing your practice. This protects your confidentiality and creates a competitive environment.
- Negotiation. We manage offers and negotiate the key terms of the deal, focusing not just on price but also on structure, your role after the sale, and protections for your staff.
- Due Diligence. The buyer will conduct a deep review of your financials, contracts, and compliance records. This is where many deals face challenges. Being thoroughly prepared is the key to a smooth process.
- Closing. The final legal documents are signed, and the transition to new ownership begins according to the plan you helped create.
Valuation
One of the first questions every owner asks is, “What is my practice worth?” The answer is more complex than a simple multiple of your revenue. Sophisticated buyers value your practice based on its true cash flow and future potential.
Finding Your Adjusted EBITDA
The most important metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). We start with your stated net income and then add back expenses that a new owner would not incur. These can include your personal salary above a market rate, personal vehicle leases, or other one-time expenses. This gives a true picture of the practice’s profitability. Many owners are surprised to find their Adjusted EBITDA is much higher than their net income.
Applying the Right Multiple
This Adjusted EBITDA figure is then multiplied by a number (a multiple) to determine the practice’s enterprise value. This multiple is not fixed. It changes based on your specialty, your provider model (are you the only provider or are there associates?), your payer mix, and your growth prospects. A well-positioned practice with multiple providers will command a much higher multiple than a solo practice.
Post-Sale Considerations
The deal is not done when the papers are signed. A successful transition is planned long before the closing date. Focusing on what comes next is critical for protecting your legacy, your staff, and your financial future.
Here are three areas to plan for:
- Your Team’s Future. A key concern for buyers is staff retention and continuity of care. A well-defined transition plan that supports your team is valuable to a buyer and ensures your patients continue to receive excellent care.
- Your Evolving Role. Many owners continue to work in the practice for a period after the sale. The terms of this role, including your compensation and responsibilities, are a key part of the negotiation. It is important to design a role that matches your personal and professional goals.
- Your Financial Outcome. The structure of your sale has major tax implications. How the deal is classified, whether as an asset or entity sale, can significantly change your after-tax proceeds. Planning for tax efficiency from the very beginning can save you a substantial amount of money.
Frequently Asked Questions
What is driving the demand for hospice and geriatric care practices in Oregon?
Nearly half of Medicare decedents in Oregon utilize hospice services, supported by increased national Medicare spending growing over tenfold since 1998 to $23.7 billion, indicating strong and stable demand in this sector.
How does Oregon’s new SB 951 law affect the sale of hospice and geriatric practices?
SB 951, effective 2025, mandates that at least 51% ownership of healthcare practices must be held by licensed medical professionals in Oregon, changing the buyer landscape and necessitating a compliant sale strategy.
What are the key factors buyers consider when purchasing a hospice practice in Oregon?
Buyers look for strong referral networks, experienced clinical teams, a history of regulatory compliance, documented patient satisfaction, clean and audited financials, and operations that comply with SB 951.
How is the valuation of a hospice and geriatric practice determined?
Valuation is based on Adjusted EBITDA, which reflects true cash flow by adding back non-recurring expenses. This figure is multiplied by a sector-specific multiple influenced by provider model, payer mix, and growth prospects.
What should sellers plan for after closing the sale of their hospice or geriatric practice?
Sellers should plan for staff retention and transition, define their post-sale role including compensation, and structure the sale for tax efficiency to maximize their financial outcome and protect their legacy.
