Selling Your Behavioral Health IOP? Here’s What Buyers Are Looking For

For those seeking to sell their behavioral health Intensive outpatient program business, there are numerous options who are ready to buy with a considerable return on investment (ROI). buyers could be behavioral health business brokers, private equity firms, non-profit organizations, private investors, and strategic healthcare providers. How you are going to reach them and make your sale profitable requires considerable planning and research which will be explained in this article.

Strategique Partners can help you find who is buying your behavioral health IOP with maximized return on investment and streamlined transfer of business, Consult today!

Why are IOPs Attracting Buyers?

The behavioral health business industry has sparked a significant surge in investors’ confidence, particularly in the intensive outpatient programs (IOP) due to increased demand in the mental health sector. IOP can be an attractive opportunity for buyers because:

• Surging demand for Mental Health Services

In the United States, roughly two-thirds of Americans are unable to get mental health treatment due to increased mental health and substance use disorders in the country. In this scenario, an intensive outpatient program demand is surging due to its efficacy and accessibility leading to a profitable opportunity for anyone who wishes to purchase it.

• Cost-Effective Treatment Program

These business models are simultaneously financially attractive for buyers and payers. Investors can provide high-intensity care cutting down the cost incurred in inpatient treatment programs which makes it appealing to insurance companies and patients alike.

• Favorable Policy Adaptability

Legal compliance such as the Mental Health Parity and Addiction Act promotes incentivizing buyers of IOP through insurance coverage. 

• Covid Pandemic 

After covid, the patient needs and lockdown forced new treatment modules such as telehealth. Also, the mental health challenges forced patients to opt for intensive outpatient programs exacerbating its demand up till now.

• Workforce Shortage

Investors look for businesses that do not become a hurdle regarding workforce shortage. Intensive outpatient businesses require a lesser number of workforce and for a limited time cater to a more secure and easy-to-handle business model.

 

 

What Characteristics Your Behavioral Health IOP Should Possess to Stand Out?

Your behavioral health IOP should possess certain trophies in terms of business operations to attract the best buyer for a maximum ROI output. It includes:

Strong Financial Performance

Buyers will buy an effective business if the financial valuation of the business shows good metrics in terms of:

1. Revenue Trends: Consistently growing over the last 2-3 years
2. Profit Margin: If the business is giving a healthy profit margin in terms of operational investments
3. EBITDA: This is the most important determinant of your business sales if it is positive.

Pro Tip: Have a Clean and detailed financial determination to express your achievements. Hire experts in the field of finance valuation to complete one!

Compliance and Accreditations

The behavioral health industry is highly regulated and buyers are interested in a facility that is fully accredited and licensed for behavioral health business. It may include

• Documentations
• State and federal license 
• Business License
• Accreditations such as JCAHO and CARF
  Regulatory Compliance like HIPAA Compliance

Review our guide on obtaining behavioral health licensing to comply with your business for the buyer’s standards!

Well-Established Referral Network

A perfect referral network is key to a successful ROI in terms of behavioral health IOP. Your business should have a strong referral network through the:

• Relationships with hospitals, primary healthcare providers, and private practitioners.
• Robust marketing strategy through online platforms
• Relationship with insurance companies such as Medicaid and Medicare.

Scalability and Growth Potential

A business with growth potential appeals more to buyers, you can improve your scalability through the:

1. Technology Integration such as the use of software Electronic health records for administrative purposes.
2. Providing services according to the current trends and market demands
3. Vision to grow that identifies opportunities and options where expansion can be made.

Review our guide on improving the behavioral health revenue cycle to comply with the latest growth opportunities and improve your behavioral health revenue.

Expert Administrative & Clinical Staff

Staffing is the key to any business operative success and credibility. A buyer would look into the administrative and clinical expertise of a behavioral health IOP before hopping on to the purchase. 

Reputed Patient Outcomes

Build a strong network of positive patient outcomes. Improve your marketing strategy to build a presence online and share a positive impact in the market, this favors the business in terms of attractive opportunity. Make sure you have everything shown such as:

• Online reviews and patient satisfaction comments
• Data depicting your success rates and follow-up care
• Brand building and community involvement

Review our guide on building credibility for drug rehab to know how you can improve.

Multiple Revenue Streams

Of course, your behavioral health IOP should not be solely based on a single revenue stream. Buyers will prefer a business that highlights:

• Multiple-payer contracts (private insurance, Medicaid, Medicare, self-pay options)
• Integrated Health services such as mental health therapies, individual counseling, medication management)

Review our comprehensive guide on how to start an IOP program to know in detail how you can build a comprehensive business plan for your business that also prepares your business well for sale!

Who Will Be Looking To Buy Your Behavioral Health IOP Business?

Let’s suppose your business has all the qualities to qualify for a perfect detail. Now next step is to identify who is buying behavioral health IOP. It could be a specific person such as:

Private Equity Firms

Private equity firms are one of the most prominent investors in the behavioral health industry comprising a total behavioral health business acquisition to upto 66%. These firms consider IOPs a strong contender and opportunity in the behavioral health market with high growth potential.

Non-Profit Organization

Non-profit organizations including NGOs and state organizations often look to expand their behavioral health services in areas where there is no public healthcare facility available. If your business is located in that type of area it could be a profitable opportunity for you to sell and promising for NPOs to purchase a lucrative one!

Strategic Healthcare Provider

Healthcare providers such as large hospitals, insurance providers, and behavioral health firms are expanding their treatment services in the IOP sector. They pay well and keep the brand recognition intact to continue or even improve your legacy.

Individual Investors

Individual investors such as physicians and grouped healthcare providers look for such opportunities to expand their portfolio or to step into the world of behavioral health business. Consult a behavioral health business sell-side broker to find who is looking for a behavioral health business for sale.

Staff Members

Before stepping out consult your staff members who are enthusiastic enough to purchase your facility. A staff member, administrative or clinical, who has spent the time of his life building your business facility and making contacts would look to purchase a well-established business like yours!

Review our guide on who wants to buy my behavioral health practice and behavioral health business for sale to understand what your buyers are looking for!

Get Help From Strategique Partners in Finding a Buyer for Your IOP

If you are planning to sell your behavioral health IOP and struggling to find the right person or investor who will buy your practice and continue the legacy you did, you can consult Strategique Partner’s expert behavioral health business advisors. We have numerous buyers ready to purchase and kickstart their careers in the behavioral health IOP industry. We also provide:

1. Sell-Side Advisory
2. Buy-Side Advisory
3. Due Diligence
4. Deal Brokerage
5. Post-Sale Integration
6. Startup Consultancy

So, consult our business experts to know what lies ahead of your behavioral health business sale!

Frequently Asked Questions IOP Business

What Is the Success Rate of IOP?

According to NIH, the Intensive Outpatient Program for behavioral health treatment gives a success rate ranging from 60 to 70% for all substance use disorders and mental health treatment practices. 

Who Is the Largest Payer of Mental Health?

In the United States, Mental health treatment programs including IOP are mostly paid by Medicaid which is the largest payer of mental health treatment!

What Is the Difference Between PHP and IOP?

The primary difference between both treatment modules lies in the care services, PHP is more intensive with a longer stay period and regular checkup plan than IOP which is particularly 28 days with only day-to-day routine care planning.