
After advising more than 25 physician groups on successful partnerships with private equity, we’ve seen one rule hold true: PE pays more for practices with higher and growing EBITDA (“owner’s profit”). Yet, many practices have struggled as wages climb faster than reimbursement. Here are three strategies we’ve seen boost EBITDA—and your practice’s value—without sacrificing patient care.
- Fully Utilize Mid-Levels, Then Add More
Mid-levels (e.g., nurse practitioners, physician assistants) often boost your bottom line because:
- Their pay is significantly lower than a doctor’s
- Their reimbursement rates are only slightly lower (typically 85% –90% of a doctor’s)
However, this only works if mid-levels are well-trained, well-compensated, and both highly utilized and productive:
- Hiring, Training, Retaining Mid-Levels:
- We often hear some version of this from owners: “I hired an NP, spent a year training them, and just when they became profitable, they left for higher pay.”
- There’s no silver bullet, but successful practices take one of two paths:
- Hire less experienced mid-levels and invest time and money in a structured training program, or
- Pay more for experienced hires who need less additional training
- Whichever path you choose, create a clear career roadmap and pay structure from Day 1, so your mid-levels see their path to raises and milestones. This is key for retention.
- Utilization and Productivity:
- Utilization is how much of their time they spend with patients.
- Productivity is the billings and collections they generate with that time.
- A mid-level who’s underutilized spends lots of time idle.
- One who’s busy but not productive might take too long per patient due to training gaps. Sometimes great patient care means extra time, but chronic inefficiency frustrates patients and erodes profits.
- The most profitable practices have a common profile: their providers are both highly utilized and productive.
- If you’d like our Provider Utilization and Productivity Tracker Template, email “profit” to [email protected]
- Add or Expand Profitable Services and Ancillaries
When exploring new services or ancillaries, answer three questions:
- Does it improve care for existing patients?
- What’s required to launch? (equipment, space, team, capabilities)
- Do you have enough patient volume to justify the investment?
A well-chosen ancillary can significantly boost EBITDA while offering more services under one roof. It also becomes a huge multiplier on your practice’s value. Patients are happier, more likely to refer friends, and more willing to stay under your care—further raising revenue and fueling a virtuous cycle of growth.
- Open New Locations (But Only After Maximizing the First)
We often hear: “We opened a second location, and it’s been terrible – I’m working harder than ever and making less money.” Successfully expanding to multiple locations is harder than seeing more patients or adding more services at your current site. Before deciding if it’s time to open another location:
- Check if you’re truly maxed out. Could you still grow patient volume at your current site with better marketing or increased insurance-network reach? If so, you may not need a second location—maybe just a bigger space or more efficient scheduling.
- Plan who will manage the new location without hurting the first. You likely spent 60+ hours a week to grow the original site; who does that for the second? How do you split your time?
- Open a second location only once you’ve fully tapped your first. Have a clear plan for who oversees operations and drives new-patient demand – some practices rotate a proven office manager to set up the new location.
We find that expanding from one to two locations is often the hardest step. Once you prove the model with a second site, replicating success for a third location becomes easier. Beyond three locations, you may need additional team capabilities, since standing up multiple locations while still practicing can stretch you thin.
Have questions about PE or how to grow your practice’s value? Let’s talk.
Email: [email protected]
Call/Text: 734-224-4746