Medical Practice Valuation: What Is My Practice Worth?
Private equity prices your practice on adjusted EBITDA after your pay is normalized. Businessappraisal shows you that number, and the range around it, before you take a meeting.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
In short
Most independent physician practices sell for roughly 1.8x to 3.6x seller's discretionary earnings, with a median near 2.6x, which works out to somewhere around 0.6x to 1.2x annual revenue. That is far below the 8x to 12x EBITDA figures that dominate search results, because those describe private equity platform pricing, and a solo practice is not a platform. The catch every seller meets is normalization: the buyer first resets your compensation to the market rate for your clinical work, and the multiple applies only to what is left over. Businessappraisal estimates your range from your own numbers and explains the drivers. It is an educational estimate, not a certified appraisal.
Benchmarks
What medical practices actually sell for
| Practice and buyer | Reported multiple | What is really being priced |
|---|---|---|
| Independent practice sold to an individual | 1.8x to 3.6x SDE, median about 2.6x | An income stream that still depends on you. Financed like any small business, so the loan sets the ceiling. Equivalent to roughly 0.6x to 1.2x revenue. |
| Small practice, on an earnings basis | About 2.6x to 3.6x EBITDA | The same practice expressed as EBITDA rather than SDE. Note how far this sits from the double-digit multiples quoted online. |
| Minority stake in a surgery center | About 3x to 6x EBITDA | A passive investor interest. No control, so the multiple is lower. |
| Single or multi-specialty surgery center | About 5x to 10x EBITDA | A real operating asset with its own margin. This is where ancillary ownership genuinely lifts your value. |
| Regional or national platform | About 11x to 17x EBITDA | Institutional pricing for scale. This is the number the internet quotes at you, and almost no individual practice is this asset. |
Sources: BizBuySell medical practice sold benchmarks (SDE multiple 1.80x to 3.57x, median 2.56x; revenue median 0.83x), Peak Business Valuation transaction data (SDE 1.65x to 2.52x, EBITDA 2.61x to 3.61x), and Scope Research analysis of 86 ambulatory surgery center deals with reported EBITDA multiples. We deliberately do not publish a specialty-by-specialty multiple table. The ones circulating online cite no sample size, no date, and no methodology, and we could not trace a single one to primary transaction data. Ranges are benchmarks, not quotes.
Value drivers
What moves a physician practice valuation
Payer mix
Commercial payers reimburse substantially more than Medicare for the same work. RAND has measured private plans paying hospitals well over twice Medicare rates, and the direction holds in physician offices, so a commercially weighted practice produces more durable margin per visit and buyers price it accordingly.
Specialty and ancillaries
Imaging, in-office labs, dispensing, infusion, and surgery center ownership add margin the buyer keeps. Procedural specialties consistently price above primary care.
Provider concentration
If you generate most of the revenue, the buyer is exposed the day you slow down. A diversified clinician base is worth a materially higher multiple at identical EBITDA.
Post-deal compensation
The single biggest seller shock. Your EBITDA only exists after you agree to a market salary going forward, so the purchase price and your future income are linked.
Referral durability
Institutional referral relationships that survive your exit are valued far above referrals that come from your personal network.
Scale and infrastructure
Practices with real management, clean books, and modern systems are cheaper to integrate, and buyers pay up for that.
The normalization trap, and why the headline multiple is not your multiple
Broker and advisor content in this space leads with platform multiples, because platform multiples generate calls. The number you are actually offered is usually an add-on multiple applied to normalized earnings, and the gap between the two is where sellers get disappointed.
Here is the mechanic. A private equity backed group buys your practice as an add-on at a mid-single-digit multiple of adjusted EBITDA. Once your practice sits inside the platform, that same earnings stream is carried at the platform multiple when the sponsor eventually sells the whole thing. That spread is not a swindle, it is the entire business model of a roll-up, and it is funded by the integration work the platform does. But it does mean the double-digit multiple you read about is the exit multiple for the sponsor, not the entry multiple for you. Of the roughly 1,029 private equity healthcare deals tracked in 2025, about two thirds were add-ons rather than new platforms, which tells you which side of that trade most sellers are on.
Layer normalization on top. Before applying any multiple, the buyer resets your compensation to what the market pays a physician to do your clinical work. If you have been taking home most of the profit, that reset can consume the majority of what you think of as earnings.
None of this means selling is a bad idea. It means you should walk in knowing your adjusted EBITDA and the realistic add-on range for your specialty, so that an offer can be judged instead of guessed at.
Fair market value versus strategic value
If a hospital or health system is the buyer, the rules change. Under federal law governing physician arrangements, a hospital cannot pay you more than fair market value, and it cannot pay you for the value of the referrals you will send it. That legal ceiling is real, and it is why a hospital offer often lands below a private equity offer for the same practice.
The practical consequence: your neighbor selling to the local health system is not a comparable transaction for your private equity deal, and the reverse is equally true. When you benchmark, benchmark against the same buyer type.
Whatever the buyer, the arithmetic underneath is the same three methods: an EBITDA multiple, an SDE multiple for owner-run practices, and a discounted cash flow. The calculator above runs all three and shows the range they produce.
Questions
Medical practice valuation questions people actually ask
How is a medical practice valued?
By earnings, primarily. Independent practices are valued on a multiple of seller's discretionary earnings, typically 1.8x to 3.6x with a median near 2.6x, after the owner's compensation is normalized to a market rate. Revenue multiples, with a median near 0.83x, are used as a cross-check rather than as the primary method.
What multiple is used to value a physician practice?
Independent practices sold on the open market trade near 1.8x to 3.6x SDE, or roughly 2.6x to 3.6x EBITDA. The 8x to 12x figures you see online describe private equity platforms, not single practices. Surgery centers and scaled multi-site groups genuinely reach those levels, but a solo practice is a different asset.
Do medical practices sell on revenue or EBITDA?
EBITDA, once the practice is large enough to run without the owner. Revenue multiples are a sanity check, with a reported median near 0.83x. Owner-operated practices where the physician effectively is the business are usually valued on SDE instead, because that reflects the total benefit an owner-buyer receives.
What is normalized EBITDA in a medical practice valuation?
It is your earnings after the buyer replaces your actual compensation with a market salary for the clinical work you personally perform, and strips out personal or one-time expenses. It is the number the multiple is applied to, and it is almost always lower than the profit you take home today.
How does payer mix affect valuation?
Commercial insurers pay substantially more than Medicare for identical services, so a commercially weighted practice produces more durable margin per visit. Buyers price that directly, and payer mix alone can move a practice up or down by a turn or more of EBITDA.
Why does a hospital offer less than private equity?
Because it legally must. Federal rules on physician financial relationships cap what a hospital can pay at fair market value and forbid paying for the referral stream. A private equity buyer faces no such cap and can pay for strategic and roll-up value, so its offer is often higher.
Can a valuation calculator estimate what my practice is worth?
Yes, for sizing the range. Enter revenue, earnings, and growth and you get a defensible band from three methods in minutes, which is enough to judge whether an offer is in the right neighborhood. It is an educational estimate, so commission a formal valuation once you are actually transacting.
Last updated July 2026
Why it fits
Physicians and practice owners weighing a private equity or hospital offer, or planning a succession.
Normalization made visible
The buyer pays a multiple of EBITDA after your pay is reset to market. You see what that does to the number before you negotiate.
Specialty and payer mix count
Commercial-heavy payer mix and ancillary revenue lift the range. Medicare-heavy, single-physician practices sit at the bottom of it.
Three methods, one range
Earnings multiple, revenue multiple, and discounted cash flow are triangulated, so a single flattering number does not set your expectations.
More use cases
Related features
Find out what it is worth
Enter your numbers and get an estimate from three methods in minutes, benchmarked against comparable sales, with the drivers explained. An educational estimate, not a certified appraisal.