Assessing and Enhancing the Value of Your Practice: Expert Insights from Philip Isham

Whether you’re planning to sell, bring in a partner, or strengthen your business for the future, understanding the value of your medical practice is essential. Even if a sale isn’t imminent, knowing your practice’s value now can guide strategic decisions that drive long-term growth and profitability. While valuation may seem complex, there’s a proven method for assessing value accurately. To break it down, we spoke with Philip Isham, a healthcare industry expert with over 25 years of experience in strategic planning, business development, practice management, and operations consulting. Having helped numerous eyecare and medical businesses achieve financial and strategic success, Isham specializes in identifying key value drivers and turning insights into actionable growth opportunities. This article explores his expert strategies for evaluating and enhancing your practice’s value, ultimately positioning you for long-term success.

Step One: Defining Value

Many practice owners are deeply invested in their businesses, and rightfully so. They’ve poured time, effort, and resources into building and sustaining their practices. However, when it comes to assessing value, emotions and expectations can often cloud objective valuation. According to Isham, the number one barrier to acquisitions or mergers is the disconnect between buyer and seller on perceived versus actual value. This common gap can create obstacles in negotiations and underscores the importance of clearly defining value. “You need to have alignment of value between two parties, whether you’re going to sell, buy, or ask someone to invest in your business,” Isham explains. When all parties speak the same language in terms of value, they can effectively work together on identifying the best path forward for the business.

The Objective: Picking a Value That Resonates

When assessing a practice’s worth, it’s crucial to choose a valuation method that aligns with both buyer and seller expectations. While various methods exist—such as personal value, market value, or liquidation value—the healthcare industry primarily relies on enterprise value as the most accurate measure. At its core, enterprise value reflects a practice’s profitability, measuring the net income or cash flow after covering critical expenses. Practices can find their enterprise value by calculating EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), with valuation multiples applied to the EBITDA based on the key factors below. Higher valuation multiples indicate greater financial strength and growth potential. By using enterprise value as the benchmark, practice owners can establish a realistic, data-driven valuation that accurately reflects cash flow, scalability, and long-term profitability.

Key Factors for Determining Practice Value

Several factors influence where a practice falls on the valuation scale:

1. Financial Performance and Sustainability – Strong revenue, profitability and cash flow stability indicate a well-managed, sustainable practice. Consistent financial growth and well-managed operations make your business more attractive to buyers and investors.
2. Multi Sub-Specialties – A diverse range of services (e.g. cataract, glaucoma, retina and other sub-specialties) increases patient access, cross-selling opportunities, and revenue streams. Single-specialty practices often rely on external referrals, limiting their valuation. 
3. Full Scope and Continuum of Delivery Service Offerings – Practices offering comprehensive care under one roof—such as surgery centers, optical dispensaries, diagnostic imaging, physical therapy, or rehabilitations services—tend to be more valuable. These integrated services improve patient retention, streamline care, and generate multiple revenue streams.
4. Favorable Marketplace – Practice located in high-demand areas with growing populations typically have higher valuations than those in oversaturated or declining markets (e.g. Florida vs North Dakota).
5. Multiple Locations – Expanding to multiple locations increases patient access and growth opportunities. Practices with several well-established locations tend to attract higher valuations due to their broader market reach, patient volume, and brand recognition.

Step Two: Drive Value

Driving value for your medical practice goes beyond simply defining it—it requires strategic action to enhance and sustain that value over time. Once you’ve established a shared understanding of value, aligned on common goals, and identified factors that influence high or low valuations, the next step is actively working to increase your practice’s worth. Isham breaks this process down into three key areas:

• Strategic planning: Establishes a clear vision for growth, answering, “What do we want to be when we grow up?”
• Effective management to implementation plan: Ensures the strategic plan is successfully implemented through strong processes, a skilled and engaged team, and leadership that is fully aligned with the practice’s growth goals.
• Continuous improvement: Crucial for long-term success, requiring regular self-evaluation and organizational assessment to refine strategies and adapt to changing conditions. While your strategic plan may evolve over time, Isham emphasizes that commitment to ongoing improvement will keep your practice on the right path toward maximizing its value.

Step Three: Execution & Success Factors

Executing a strategy to drive practice value requires a deep understanding of key success factors and a commitment to deliberate, methodical implementation. By focusing on the following foundational elements, practices can establish a strong operational framework that supports growth, efficiency and long-term profitability:

• Increase Revenue: Expand locations, introduce new services or products, sell to new customers, or enter new markets.
• Cost Reduction: Eliminate unnecessary expenditures, optimize staffing, and streamline operations.
• Maintain Pricing and Value Stability: Avoid price wars; instead, emphasize your unique services and patient outcomes.
• Reduce Outsourcing: When feasible, keep more services in-house to leverage existing infrastructure and reduce reliance on third-party vendors, if possible. Isham stresses, “The more you have in terms of deliverables or services inside of your own organization, you’re able to leverage overhead expenses that are already being paid for.”
• Automate: Implement technology to handle repetitive tasks and eliminate mundane processes, allowing staff to focus efforts on enhancing patient care and driving revenue.
• Improve Inventory Management: Optimize costs of goods sold (COGS) by ensuring purchased inventory is efficiency utilized and monetized.

Leveraging Technology to Maximize Practice Value

Modern healthcare technology is a powerful asset in executing strategic plans and improving efficiency. By automating key processes and leveraging data-driven insights, practices can reduce administrative burdens while increasing revenue.  

One example is Brevium—an innovative patient reactivation software that Isham has observed practices implement to boost revenue and automate tedious processes across  those practices. By mining patient data using diagnostic and procedure codes, Brevium identifies lost and overdue patients and automates targeted outreach to bring them back. This patented solution has helped Isham’s clients and hundreds of medical practices nationwide build long-term value by filling appointment gaps, improving patient retention, and driving untapped, sustainable growth with minimal effort.

Conclusion

Assessing and building the value of your medical practice is an ongoing process that requires both objective valuation and strategic execution. By defining value, implementing growth strategies, and optimizing operations, practice owners can make informed decisions that fuel profitability and lasting success. However, valuation alone is not enough—sustained value is created through strategic planning, effective management, and continuous improvement.

“There are two components to change: ‘Can do’ and ‘Will do.’ Many practice owners are willing to evolve, but few commit to action. True success comes from continuous improvement and the willingness to learn.” – Philip Isham

Ask yourself:

• How can I grow the value of my practice?
• Am I educable?
• Am I willing to embrace new strategies and admit past mistakes?

Defining practice value and successfully executing a strategic plan ultimately comes down to a practice’s ability to change, learn and innovate. By leveraging best practices in revenue growth, cost optimization, operational efficiency, and market positioning, your practice can strengthen its financial standing, attract investors, and secure a competitive edge in the evolving healthcare landscape.

Explore how Brevium can support your growth strategy by reactivating lost patients, filling provider schedules with higher-margin patients, and driving measurable value— schedule a free demo today.