Valuing Occupational Medicine Practices in 2025: A Comprehensive Guide for Physicians, Operators, Investors, and M&A Professionals

Will Hamilton
Mar 4
7 min read

The occupational medicine industry has seen steady M&A interest due to its recurring employer-driven revenue, low reliance on third-party payers, and strong alignment with workforce health and safety trends. Strategic buyers and private equity-backed platforms are targeting clinics with strong employer relationships, ancillary services like physical therapy and drug testing, and opportunities for geographic expansion. Practices with diversified service lines, scalable operations, and long-standing contracts are particularly attractive and tend to command higher EBITDA multiples.

Whether you're preparing to sell a occupational medicine practice, evaluating a partnership opportunity, or seeking to benchmark financial performance, this article explores the key valuation methodologies, drivers, and risk factors that determine the value of a occupational medicine practice.

I. Industry Context: Why Occupational Medicine is in Demand

The occupational health industry has experienced steady low- to mid- single-digit growth over the past several years and is projected to continue expanding steadily in the coming decade. According to one source, the global market is forecast to reach $5.94 billion by 2030, growing at a CAGR of 3.4% from 2024-2030, while another source forecasts a 5.86% CAGR from 2024-2032 for the U.S. market, specifically.

Key Growth Drivers

Key growth drivers for the industry include the following:

Rising awareness of occupational hazards and workplace safety
Increasing focus on employer-sponsored health coverage and wellness programs
Growing prevalence of work-related stress, injuries, and illnesses
Stricter regulatory frameworks mandating occupational health service
Technological advancements enabling telehealth and digital health monitoring
Aging workforce requiring specialized occupational health support
Emphasis on mental health and work-life balance in corporate settings
Integration of artificial intelligence for health monitoring and predictive analytics

Reimbursement Outlook

Occupational medicine practices are expected to experience modest reimbursement growth in 2025, supported by stable Medicare Advantage (MA) payments and incremental provider fee increases under structured updates for MA and outpatient services. Commercial payers are likely to offer restrained rate increases due to broader medical cost trends, which may limit negotiation leverage despite rising demand for employer-based wellness and compliance services. Looking ahead to 2026, Medicare FFS and MA updates are projected to show moderate increases tied to technical adjustments and utilization trends, but with budget neutrality constraints likely muting net gains in occupational care reimbursements. Practices that secure in-network commercial payer contracts, add services like onsite clinics or telehealth, and leverage efficiencies through tech-enabled workflows are best positioned to capture upside while managing reimbursement stagnation.

II. Top Reasons to Get a Valuation of Your Occupational Medicine Practice

The following is a list of common reasons for commissioning a valuation analysis or appraisal of a occupational health business:

1. Preparing for a Sale or Strategic Partnership

To establish a defensible asking price when marketing the business
To evaluate offers from private equity, strategic buyers, or joint venture partners
To understand how your practice compares to market benchmarks

2. Internal Ownership Transition

For buy-in or buy-out of partners or associates
To support fair and compliant equity allocation among clinicians
To plan for generational succession or family transfers

3. Compliance with Healthcare Regulations

To support Fair Market Value (FMV) and Commercial Reasonableness (CR) assessments required by Stark Law and Anti-Kickback Statute in deals involving ownership by other healthcare providers
To document compliance in joint ventures, especially when there is a referral relationships (hospitals, ancillary service providers, or other physicians)

4. Estate & Tax Planning

For gift or estate tax reporting to the IRS (especially for closely held businesses)
To support asset protection strategies
To plan for long-term wealth transfer or charitable contributions

5. Litigation or Dispute Resolution

For divorce proceedings involving business asset division
In shareholder or partnership disputes
For economic damages assessments in legal proceedings

6. Business Planning & Strategic Growth

To establish a valuation baseline for performance benchmarking
To support capital raise, refinancing, or line-of-credit applications
To identify value drivers and areas for operational improvement

III. Valuation Approaches for Occupational Medicine Practices

Valuation professionals typically apply three core methodologies to estimate the value of an occupational health business:

Income Approach (Discounted Cash Flow or Capitalization of Earnings)

This approach values a business based on the present value of its expected future earnings or cash flows. It’s most appropriate when a practice has a stable operating history and predictable future performance.

Key assumptions include:

Normalized EBITDA or owner’s discretionary earnings
Growth rate assumptions (organic and acquisitive)
Risk-adjusted discount rate (typically 10–25% for occupational health)
Capital expenditure needs

Pros: Based on the business’ future earning power

Cons: Sensitive to forecasting errors and discount rate subjectivity

Market Approach (Comparable Transaction Method, e.g. Market Multiples)

This method uses observed EBITDA multiples or revenue multiples from recent M&A transactions or public companies in the occupational medicine space. Typical multiples for small to medium -sized occupation medicine businesses are within the range of 3x–8x EBITDA, depending on a wide variety of factors.

This article includes more details and information about occupational medicine valuation multiples.

Pros: Easy to benchmark; useful in active M&A environments

Cons: Requires access to quality private market data and careful adjustment for practice size, margin, geography, and a variety of other factors

Asset-Based Approach

Used only when the business is underperforming or being liquidated. The value is derived from the net assets (e.g., equipment, leasehold improvements) minus liabilities.

Pros: Useful in distressed scenarios

Cons: Intangible value of the practice can be difficult to quantify under this method

IV. Key Value Drivers in Occupational Medicine Practice Valuation

Several specific factors can materially influence an occupational medicine clinic's valuation multiple:

Earnings Quality

Buyers and valuation professionals place significant emphasis on normalized EBITDA and / or cash flow. Adjustments often include:

Owner compensation (if above/below market)
Non-recurring revenue or expenses
Related-party lease arrangements
Post-transaction adjustments
Out-of-period adjustments

Growth Potential

Discount rates and valuation multiples are a function of perceived risk and growth. Key considerations within the industry related to growth include the following:

Long-Term Employer Contracts with Expanding Corporate Clients: Multi-year contracts with large / growing employers provide recurring revenue and create opportunities for geographic expansion.
Diversified and High-Margin Services: Offering DOT exams, injury care, drug testing, wellness programs, and on-site clinics adds revenue streams and attracts a wider client base.
Workforce and Regulatory Trends Favoring Prevention: Increasing demand for compliance exams, return-to-work evaluations, and employer wellness programs supports sustainable long-term growth.
Opportunity for Geographic Expansion: A replicable business model with standardized workflows allows rapid expansion into new markets or via M&A roll-ups.
Technology and Reporting Capabilities for Employers: Platforms that offer digital scheduling, employer dashboards, and data analytics enhance value to clients and improve retention, signaling scalability.

Risk Factors

Key considerations within the industry related to risk include the following:

Long-Term Employer Contracts and Diversified Client Base: Multi-year service agreements with a broad range of employers (by size and industry) reduce revenue volatility and minimize reliance on any single client.
Consistent Patient Volume with Predictable Services: A steady stream of services like pre-employment physicals, drug screenings, and work injury care provides reliable, non-cyclical revenue.
Strong Regulatory Compliance and Documentation: Adherence to OSHA, DOT, HIPAA, and state-specific occupational health regulations, along with proper documentation, reduces legal and compliance risk.
Experienced Clinical and Administrative Team: A skilled and stable staff, including providers familiar with occupational health protocols, ensures consistent service delivery and lowers operational risk.
Efficient Operations and Scalable Infrastructure: Standardized workflows, integrated EMR and scheduling systems, and centralized billing functions demonstrate operational maturity and support future expansion.

V. Current Market Trends in Occupational Medicine M&A

Occupational medicine announced M&A deal volume declined in 2024, but this appears to more blip than trend. Deal announcements are dominated by private equity firms and platform companies as smaller owner / operator buyer acquisitions typically do not get announced publicly. The small handful of PE-backed acquirers like Akeso and Agile slowed their activity in 2024, while Concentra, the major acquirer in the industry, paused M&A activity entirely, likely in preparation for its spinoff to new corporate entity by Select Medical. Concentra's acquisition of Nova Medical Centers (discussed more below) may be an early indicator of a change in strategy, as the $265 million investment comes after spending a total of $35.8 million on 12 acquisitions over the past four years.

The top four acquirers have accounted for slightly over 40% of the announced deals in our database dating back to 2019, with Concentra leading the way with slightly under 25%.

Impact of Size on Occupational Medicine EBITDA Multiples

To better illustrate the impact of size on primary care valuations, we reviewed data from the Scope Research Healthcare M&A Valuation Database and compared the size of the acquired practice in terms of EBITDA to the implied multiple from the transaction. Larger, fast-growing platforms can get up into the 8x to 15x EBITDA range (depending on many different factors).

Cash Flow Multiples for Small Occupational Medicine Practices

There are a large number of lower market occupational medicine clinics listed for sale currently, most of which are seeking a physician-to-physician type of deal. According to our research, small clinics are listed for sale for between 0.5x and 0.9x revenue at the 25th and 75th percentiles, respectively, and between 1.7x and 3x owner cash flow. However, it's difficult to glean much useful information from clinics so small where the level of owner involvement is unclear. A clinic making $400k per year in cash flow for an absentee owner is much different from a clinic making $400k per year in take-home for a full-time physician-owner.

VI. Final Thoughts: Keys to Maximizing Value

If you're an occupational medicine practice owner or executive planning to explore a sale or equity partnership, consider the following strategies to enhance your valuation:
- Secure Long-Term Employer Contracts: Build stable, recurring revenue by establishing multi-year service agreements with local and regional employers for physicals, drug testing, injury care, and wellness programs.
- Expand Service Offerings to Meet Employer Needs: Broaden your scope with services like DOT exams, functional capacity evaluations, onsite clinics, and telehealth injury triage—making your business a one-stop solution and increasing revenue per client.
- Optimize Clinical and Administrative Efficiency: Standardize workflows, use purpose-built EMR systems, and streamline billing to improve margins and create a scalable platform attractive to strategic and financial buyers.
- Demonstrate Compliance and Quality Outcomes: Maintain strong documentation, regulatory compliance (e.g., OSHA, DOT), and trackable return-to-work metrics to build trust with employers and reduce buyer risk.
- Professionalize Financials: Buyers prefer accrual-based, GAAP-compliant statements.
About HealthFMV
HealthFMV specializes in appraising healthcare businesses and services arrangements, including occupational medicine practices.
- Business Valuation: We perform independent, third-party valuations of healthcare businesses to document regulatory, tax, and financial reporting compliance, resolve ownership disputes, and help ensure both parties to the transaction are comfortable with the financial terms.
- Transaction Advisory: We work with healthcare business owners, organization executives, providers, and their health lawyers to develop transaction structures and deal terms that further their business objectives while maintaining compliance with the complex healthcare regulatory environment.
- Services Arrangements: We prepare fair market value and commercial reasonableness opinions for a variety of healthcare services arrangements including management services, hospital-based specialty stipends, case rates and PC/TC splits, block leasing, and shared savings distributions, among others.
Contact Will Hamilton at whamilton@healthfmv.com with questions about our healthcare valuation services or to discuss your specific situation. Visit scoperesearch.co for more information about our healthcare M&A research services.