With more than 30 years of healthcare management experience, Thaddeus Thompson sets out the most consistent and costly valuation mistakes healthcare business owners make and why getting this wrong before a transaction begins can determine the outcome before negotiations ever start.
Boston, United States, October 6, 2026 -- With more than 30 years of healthcare management experience, Thaddeus Thompson sets out the most consistent and costly valuation mistakes healthcare business owners make and why getting this wrong before a transaction begins can determine the outcome before negotiations ever start.
UNITED STATES, August 2026
Thaddeus Thompson, Founder and Owner of Leland Healthcare Advisors and Consultants, a Fellow in the American College of Healthcare Executives and Member of the Alliance of Mergers and Acquisitions Advisors, has published guidance on one of the most consequential and consistently misunderstood stages of the healthcare business exit process: valuation.
In Thompson's experience working with lower-middle-market healthcare businesses across rehabilitation services, home health, behavioral health, and other clinical services, the gap between what a healthcare business owner believes their organization is worth and what the market will actually pay for it is one of the most reliable predictors of a transaction that either fails to close or closes badly. Understanding why that gap exists, and how to close it before the process begins, is, in his assessment, the single most important preparatory step available to a healthcare business owner considering an exit.
Why Healthcare Business Owners Consistently Overvalue Their Organizations
Thompson identifies several structural reasons that healthcare business owners arrive at inflated valuations. The first is revenue versus profitability confusion. Many owners calculate the value of their business based on its revenue rather than its profitability. Buyers, by contrast, most often evaluate businesses based on EBITDA, earnings before interest, taxes, depreciation, and amortization, and apply a multiple to that figure rather than to top-line revenue. A healthcare business generating $3 million in annual revenue with thin margins and high owner compensation drawn above market rate may have an EBITDA of $200,000 or less, producing a valuation significantly below what the revenue figure might suggest.
The second is the value of clinical relationships. Many healthcare business owners attribute significant value to the referral relationships, community reputation, and patient loyalty they have built over years or decades. Goodwill. These are real and meaningful assets, but their value in a transaction depends entirely on whether they are transferable to a new owner. Referral relationships that exist because of the personal credibility and relationships of the founding clinician or owner do not transfer automatically with the business. Buyers discount for this risk, often significantly.
The third is comparison to the wrong benchmarks. Healthcare business owners frequently cite the sale prices of other businesses they have heard about through their networks as evidence of what their own organization should be worth. Those comparisons rarely account for the specific financial profile, geographic market, service mix, payer mix, or owner dependency profile of the business being valued, all of which can move the multiple applied to EBITDA substantially in either direction.
What an Accurate Healthcare Business Valuation Requires
Thompson's approach to healthcare business valuation begins with a comprehensive financial analysis that establishes a realistic EBITDA figure after normalizing for owner compensation, one-time expenses, and non-recurring revenue items. That normalized EBITDA is then benchmarked against comparable transactions in the same healthcare subsector and geographic market to establish the range of multiples a buyer is likely to apply.
The resulting valuation range is then stress-tested against the specific risk factors present in the business, including owner dependency, payer mix concentration, regulatory compliance history, and the depth and transferability of the management team. Each of these factors can compress the multiple a buyer applies, and understanding their impact before the transaction process begins allows the seller to address them proactively rather than discovering them during due diligence when it is too late to respond.
"A healthcare business owner who goes to market without an accurate valuation is negotiating without a strong foundation," Thompson says. Significant asymmetry between seller’s and buyer’s valuations consistently derail negotiations."
About Leland Healthcare Advisors and Consultants
Leland Healthcare Advisors and Consultants Corp. is a healthcare and medtech business consulting and mergers and acquisitions advisory firm founded by Thaddeus Thompson. The firm provides business consulting, mergers and acquisitions advisory, growth planning, and operational improvement services to lower-middle-market healthcare businesses. Thaddeus Thompson is a Fellow in the American College of Healthcare Executives and a Member of the Alliance of Mergers and Acquisitions Advisors. For more information and to book a consultation, visit lelandhealthcare.org.
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Organization: Leland Healthcare Advisors & Consultants
Website: https://lelandhealthcare.org
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