EBITDA for medical practices
Earnings Before Interest, Taxes, Depreciation, and Amortization. In a clinic, EBITDA measures operating profitability before accounting and tax decisions distort the picture. It strips away financing choices and non-cash charges so you can see how much cash the operations actually generate.
Why this matters for your clinic
EBITDA is how buyers and lenders value your practice. A $5M practice with 20% EBITDA ($1M) at a 6x multiple is worth $6M. At 15% EBITDA ($750K), it is worth $4.5M. That 5% gap is a $1.5M difference in your exit price. Multiples by specialty are on the dental and physical therapy pages, and the practice valuation calculator applies them to your own EBITDA.
Most clinic owners track revenue religiously but ignore EBITDA. Revenue tells you how much money came in. EBITDA tells you how much of it you actually kept before the IRS and your lender took their share. If revenue is growing but EBITDA is flat, your expenses are eating every dollar of growth.
When you bring on a fractional CFO, one of the first things they will build is a monthly EBITDA trend. Not because it is a fancy metric, but because it is the single number that tells you whether your business is getting healthier or sicker.
How to calculate
Revenue - Operating Expenses (excluding interest, taxes, depreciation, amortization) = EBITDA
What good looks like
EBITDA margins vary by specialty, and no public source publishes them by outpatient specialty — MGMA's cost-of-operations data sits behind DataDive and reports cost ratios rather than EBITDA. Normalize your own number by adding back owner pay at a market rate, then track it over time instead of comparing it to a specialty average that doesn't publicly exist. Dental practices do tend to land higher than physical therapy, mainly because PT's overhead structure is heavier, not because PT owners run worse businesses. Treat any specialty-by-specialty EBITDA table you see quoted elsewhere with suspicion unless it names the survey and the year.
From Sorso
The add-back that moves EBITDA most is usually the owner's own pay: set it at what you would pay a hired clinician to do your clinical work, and the margin a buyer sees can look very different from your tax return.
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How clinic owners typically work with us
Fractional CFO
Strategic CFO for $3M–$50M clinics
Forecasts, location-level P&L, exit prep. Starts at $4,000/mo.
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Healthcare-specialist accounting
Books done right by people who understand clinic finance. Starts at $2,000/mo.
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Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.
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