From Dilution to Dividend: How Inconsistent Care Pathways Are Silently Destroying Your Orthopedic M&A Multiple
- SolvEdge
- Nov 21, 2025
- 6 mins read
Private equity just paid 14× EBITDA for your orthopedic platform. You’re already counting the second bite of the apple.
Then the buyer finishes clinical due-diligence… and the multiple quietly drops to 9×–11×.
Why? Because your 18 newly acquired practices are running 18 different care pathways.
Same CPT code. Same implant. Same payer mix. Yet one site discharges 82% of joints home, another only 41%. One has a 1.8% infection rate, another 4.6%. One leaks $680K a year in preventable SNF spend, another makes money on every case.
Buyers don’t average those numbers. They haircut the entire platform to the risk of the worst performer.
That single inconsistency just erased tens of millions from your exit.
The Math That Keeps Ortho PE Owners Awake
| Issue from Inconsistent Pathways | Typical Valuation Impact (per $100M revenue platform) |
|---|---|
| Wide variation in home discharge rates | –1.5× to –2.5× multiple |
| Infection / readmission outliers | –$8M–$15M immediate haircut |
| Lack of standardized outcomes data | Buyer assumes maximum risk → lower multiple |
| Post-close integration cost overruns | Another 1–2× drag on IRR |
Every PE operating partner knows the dirty secret: The fastest way to destroy your ortho multiple is to let clinical variation live after close. The fastest way to protect (and actually grow) it? Force standardization at the care-pathway level — before the CIM even hits the market.
The Standardization Blueprint the Top Platforms Are Using in 2025–26
1. One Source of Truth for the Entire Platform
Stop negotiating with 27 different surgeons about “their way.” Deploy a single digital care pathway that auto-adapts to surgeon preference within evidence-based guardrails. Result: 95%+ pathway adherence without the 18-month ego war.
2. Real-Time Variation Dashboard (So You Never Get Blindsided in Diligence)
Platform leaders now see — live — every site’s performance against the standardized pathway:
- % discharged home
- SNF LOS when used
- 90-day total cost of care
- Infection & readmission rates
One click shows exactly which location is dragging the platform’s multiple
3. Automated Integration Playbook on Day 1 of Close
New acquisition signs the LOI → they’re live on the standardized digital pathway in <45 days. No 9-month EHR rip-and-replace. No committee debates. Just plug-and-play clinical consistency that instantly lifts EBITDA.
One SolvEdge-backed platform rolled this out across 14 acquisitions in 2024–2025. Outcome:
- Home discharge harmonized from 48–84% range → 79–83% platform-wide
- Preventable SNF spend dropped $4.1M annualized
- Next exit multiple already pre-negotiated 2× higher than prior deals
The New M&A Truth in Orthopedics
Buyers no longer pay for the best practice in your platform. They pay for the worst — unless you can prove standardization at scale. The platforms trading at 15×–18× in 2025–2026 aren’t the biggest. They’re the most consistent. Clinical standardization isn’t a “nice-to-have” anymore. It’s the difference between a 9× exit and an 18× exit.
Ready to See How Much Multiple You’re Leaving on the Table?
Upload your last 12 months of episode data (fully anonymized) and we’ll show you — site by site — exactly how much clinical variation is costing your next exit. Takes 15 minutes. Zero sales pressure. Just the truth in dollars and multiples.
