Healthcare services remains one of the most active M&A sectors, driven by demographic tailwinds, technology adoption, and continued private equity interest. This brief provides an updated view on valuation multiples across key subsectors.
Current Multiples Snapshot
Subsector Deep Dive
Physician Practice Management
The highest multiples continue to go to:
- Specialty practices with recurring patient relationships
- Technology-enabled care delivery
- Multi-location platforms with geographic density
Dermatology, ophthalmology, and dental remain the most competitive subsectors, with some premium assets commanding 15x+ EBITDA.
Home Health & Hospice
Regulatory tailwinds and demographic demand keep this sector attractive:
- Medicare Advantage growth driving volume
- Value-based care models earning premium multiples
- Technology platforms for care coordination in demand
Behavioral Health
Continued destigmatization and payer coverage expansion:
- Outpatient mental health seeing strong activity
- Substance abuse treatment consolidating
- Telehealth-enabled providers commanding premiums
Key Deal Drivers
What separates premium valuations from market-rate deals:
- Payor mix quality — Commercial insurance and Medicare Advantage preferred
- Clinician retention — Low turnover and strong culture
- Revenue cycle efficiency — Clean claims and fast collection
- Compliance track record — No audit findings or billing issues
- Growth trajectory — Same-store growth plus de novo or acquisition capacity
We're seeing continued appetite for platform investments, but the bar for add-ons has gotten higher. Operators need clean compliance histories and strong provider retention.
Outlook
We expect Q1 2025 to be active as:
- Large strategics execute on capital deployment
- PE platforms complete their investment theses
- Regulatory clarity emerges on key policy questions
Key Takeaway
For healthcare services founders, preparation is everything. Quality of earnings, compliance audits, and provider contracting should all be addressed 12+ months before going to market.
Our team specializes in healthcare services transactions. Contact us to discuss your situation.
