Physician practices
The measure changes with the buyer, and so does the number.
Private physician practices are acquired by hospital systems, by payer backed groups, by private equity platforms, and by other physicians. Those buyers use different measures, and the published record reflects that by offering several conventions at once. What holds across all of them is that a buyer needs production, payer mix, and compliance records that reconcile.
The record
What your record already holds.
- Production and collections by provider and by payer
- Payer contracts, fee schedules, and reimbursement history
- Provider employment agreements, including restrictive covenants
- Credentialing and licensing records for every provider
- Coding and billing audit history
- Premises lease and any equipment finance agreements
- Referral relationships and any arrangements documenting them
The questions
The questions worth answering.
- “How much production depends on the selling physician personally?”
- “What is our payer mix, and which contracts are up for renegotiation?”
- “Do collections reconcile to production and to what was billed?”
- “What do the provider agreements say about restrictive covenants on a sale?”
- “Is our credentialing current for every provider and every payer?”
- “What does our coding audit history show?”
Key-person risk
When someone leaves, the reasoning shouldn’t leave with them.
In a small practice the selling physician is usually the largest producer and the reason many patients attend. A buyer models what production looks like after they reduce hours or leave, and whether the record separates their production from everyone else's clearly enough to support that model.
High-stakes moments
When the record has to answer.
An acquisition by a group or platform
Institutional buyers arrive with a standard diligence pack and compare the practice against others they hold. Inconsistencies between production, billing, and collections are found early.
Regulatory and coding exposure
Billing and coding history attracts direct scrutiny, and referral arrangements carry regulatory weight. Both are examined from records rather than accepted on description.
Provider transitions
When a provider leaves, the questions are what their agreement committed to and which patients were theirs. Both are answerable from the record or not at all.
The published record
What the sources actually say, and what they do not.
Two independent sources now cover smaller practices on owner earnings and they agree. One is an advisory range offered without a sample or method. The other is drawn from practices actually reported sold, expressed as a middle range within which half of recorded sales fell, and it sits inside the advisory range. Worth keeping in view that the advisory source treats EBITDA and a percentage of revenue as the working measures for this sector, so owner earnings is not the only convention a buyer may use.
1x to 3x owner earnings
Sofer Advisors. Applies to smaller practices, stated without a sample or method. 2026.
1.46x to 2.94x owner earnings, the middle half of recorded sales
BizBuySell. Applies to medical practices reported sold on BizBuySell, 2021 through 2025. data through 2025.
Verelume does not average these publishers or choose between them. Where they disagree, the disagreement is the finding.
What diligence concentrates on here
- Production separated by provider, with the seller identified
- Payer mix and contract renewal timing
- Collections reconciled to production and to billing
- Provider agreements and restrictive covenants on a sale
- Credentialing currency for every provider and payer
- Coding and billing audit history
- Referral arrangements and their documentation
What Verelume does not do
Verelume does not provide clinical, coding, regulatory, tax, or legal advice, does not assess compliance, and does not value a practice. It helps your team find and understand what your own records say, with the sources attached, and flags where documents conflict or where a claim has no documentation behind it.
Related use cases
See what your physician practice's record can answer.
Start with a founder-led Diligence Readiness Assessment, Founding price $5,500, with the Verelume platform included. See all three ways to engage.