Selling your Ortho & MSK practice is one of the most significant decisions of your career. In Oregon, the process comes with unique market forces and a specific regulatory landscape that you must navigate. This guide provides a clear overview of the current market, key steps for a successful sale, and how strategic planning can protect your financial future and professional legacy. Proper preparation is the foundation of a rewarding exit.
Market Overview
The market for Ortho & MSK practices in Oregon is active, driven by two main forces. On one hand, regional health systems continue to expand their networks by acquiring successful local providers. On the other, private equity interest in healthcare remains high, though it operates differently here. Understanding this environment is the first step.
Key Oregon Market Dynamics
- Strategic Buyers: Both large hospital systems and physician-led groups are actively looking for well-run practices to join their platforms. Each has different goals and offers different partnership structures.
- A Unique Regulatory Hurdle: Oregons Senate Bill (SB) 951 is a critical factor. This law requires that medical practices be at least 51% owned and controlled by Oregon-licensed physicians. This fundamentally changes how non-physician investors, like private equity, can participate in the market, often requiring them to use creative partnership models like Management Services Organizations (MSOs).
Key Considerations
Given Oregon’s unique market, preparing for a sale requires more than just clean financials. It demands a strategic approach from the very beginning. You need to decide whether you are selling the practice assets or the entire business entity, a choice with major tax and liability implications. Assembling your team of advisors earlyan accountant, a lawyer, and an M&A specialist who understands Oregons healthcare landscapeis not just a good idea. It is the best way to ensure you are controlling the process, rather than reacting to it. That’s exactly when you should start this work, often years before a potential sale. Buyers pay for proven success, and preparing now means you sell on your terms, not theirs.
Who is Buying Practices in Oregon?
The pool of potential buyers in Oregon is sophisticated and diverse. Knowing who they are helps you position your practice effectively. The most common buyer profiles we see today include:
- Physician-Owned Supergroups. These are expanding groups led by fellow physicians. They are often looking for strong regional partners to increase their market share and clinical capabilities. These buyers align perfectly with SB 951.
- Regional Health Systems. Hospitals and integrated delivery networks continue to acquire practices to secure their referral bases and expand their orthopedic service lines.
- Private Equity-Backed MSOs. Private equity cannot directly own your practice in Oregon. Instead, they partner with practices through a Management Services Organization (MSO). In this model, you retain ownership of the clinical practice, while the MSO handles the business operationsbilling, HR, marketing, and ITin exchange for a fee. This allows you to focus on medicine while gaining a powerful business partner.
The Sale Process
A successful practice sale is a managed process, not a single event. It begins with deep preparationcreating a confidential summary that highlights your practices unique strengths and growth potential. From there, your advisor confidentially approaches a curated list of qualified buyers to create a competitive environment. This is followed by careful management of negotiations, letters of intent, and a formal due diligence phase. The due diligence process is where many practice sales encounter unexpected challenges. With proper preparation, you can anticipate buyer questions and prevent minor issues from derailing your transaction. A structured process protects your confidentiality and ensures you are negotiating from a position of strength.
How Your Practice is Valued
Your practice’s value is more than just a multiple of revenue. Sophisticated buyers start with a figure called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). We calculate this by taking your net income and adding back owner-specific or one-time expenses to see the true cash flow of the business. That Adjusted EBITDA is then multiplied by a numberthe “multiple”which is determined by several key factors. A higher multiple means a higher valuation.
| Factor That Influences Your Multiple | What Buyers Value Less | What Buyers Value More |
|---|---|---|
| Provider Model | Practice is dependent on the owner | Associate-driven, multi-provider team |
| Growth Profile | Revenue is flat or declining | Consistent year-over-year growth |
| Ancillary Services | Limited physical therapy or imaging | Strong, diversified ancillary revenue |
A comprehensive valuation is the foundation of a successful practice transition. It tells the story of your business in a language that serious buyers understand.
Life After the Sale
Closing the deal is not the end of the story. It is a new beginning that you need to plan for carefully. Will you retire immediately or stay on for a transition period of one to three years? How will you ensure your staff is taken care of and your legacy is protected? These are not afterthoughts. They are critical deal points that are negotiated upfront. Many modern deals also include structures like earnouts, where you receive additional payments for hitting performance targets, or rollover equity, where you retain a minority stake in the new, larger company. This “second bite of the apple” can often be as financially significant as the initial sale. Planning for your transition protects your team, your legacy, and your long-term financial security.
Frequently Asked Questions
What are the main factors driving the market for Ortho & MSK practices in Oregon?
The market in Oregon is driven by two main forces: expansion by regional health systems acquiring local providers and high private equity interest, which operates through unique models due to Oregon’s regulatory environment.
How does Oregon’s Senate Bill 951 affect the sale of Ortho & MSK practices?
SB 951 requires that medical practices be at least 51% owned and controlled by Oregon-licensed physicians. This law restricts direct private equity ownership and often necessitates the use of Management Services Organizations (MSOs) for non-physician investors.
Who are the most common buyers of Ortho & MSK practices in Oregon?
Common buyers include physician-owned supergroups, regional health systems, and private equity-backed MSOs. Each has a different approach and partnership structure aligned with Oregon’s ownership laws.
How is the value of an Ortho & MSK practice determined in Oregon?
Value is based on Adjusted EBITDA multiplied by a multiple influenced by factors like provider model, growth profile, and ancillary services. Practices with multi-provider teams, consistent growth, and diversified ancillary revenue typically command higher valuations.
What should I consider for life after selling my Ortho & MSK practice?
Consider whether to retire or stay on during a transition period, staff welfare, legacy protection, and financial structures like earnouts or rollover equity. Proper planning ensures long-term financial security and protects your professional legacy.