From a Stalled Sale to a Data-Driven Practice: A Specialty Surgical Group

The Situation

The engagement began by chance. Buxbaum CEO James Buxbaum was at a social event when he overheard two physician owners of a highly successful surgical practice discussing the sale process they were about to start. They planned to have their wealth advisor manage it.

He suggested a meeting. A practice sale at their scale, he explained, is run by a deal team: an M&A attorney, an investment banker, and a transaction advisory firm handling the financial side. A wealth advisor manages what comes after the sale, not the sale itself. Going to market without that structure would cost them leverage with sophisticated buyers who bring exactly those advisors to the table.

The conversation also surfaced a second issue. The practice kept its books on a cash basis, which is common for physician groups and unworkable in a transaction. Private equity buyers and their diligence teams price a practice on accrual-basis earnings, and cash-basis financials cannot answer the questions they ask about revenue timing, collections, and normalized margin.

The Challenge

The partners were excellent clinicians running a profitable, growing practice, and they had built it without the financial infrastructure a buyer would expect. Specific gaps included:

• Cash-basis books with no accrual view of net patient revenue, contractual adjustments, or accounts receivable
• No normalized EBITDA, physician compensation analysis, or add-back documentation
• No deal team in place and a planned process structure that would have left them under-represented
• A practice niche exposed to reimbursement changes that could move the earnings picture during the process
• A physician CEO who wanted deep, granular information about his business and had no reporting that provided it

What We Did

Transaction preparation. We converted the practice’s financials from cash to accrual basis, establishing net patient revenue recognition, contractual adjustment reserves, and a reconciled balance sheet. From that foundation we prepared a sell-side quality of earnings with normalized EBITDA, physician compensation normalization, and documented adjustments, and built the supporting schedules a buyer’s diligence team would request.

Interim transaction CFO. Through the process we served as the practice’s transaction CFO, coordinating with the banker and M&A counsel, managing the data room and buyer requests, and representing the finance function in diligence.

The deal did not close. Reimbursement changes in the practice’s niche shifted the earnings outlook during the process, and the partners made the decision not to transact on those terms. That was the right call, and it was one they were able to make with clear information rather than under pressure.

Ongoing accounting and CFO services. After the process, the partners asked us to stay. We took over the practice’s full outsourced accounting and fractional CFO function, running the monthly close and producing a monthly reporting package built to the level of detail the physician CEO wanted: revenue, collections, and margin by provider, location, procedure, and payor, with the variance explanations behind every movement.

Weekly business intelligence. We built weekly Power BI dashboards so leadership sees volume, charges, collections, and productivity as the month unfolds rather than after it closes.

Marketing ROI integration. The practice invests millions annually in marketing to drive patient volume, and the CEO wanted to know, continuously, whether that spend was producing the return he expected. We implemented a Snowflake data warehouse integrating the practice management system, marketing platforms, call tracking, and the general ledger, so that marketing spend can be followed through lead, consultation, procedure, and collected revenue by channel and campaign in real-time.

The Result

The partners now run their practice on current, granular information rather than on a cash-basis P&L delivered weeks late. Weekly dashboards show where volume and margin are moving. Monthly reporting explains why. Marketing spend is measured against the revenue it generates, by channel, as it happens.

That visibility has driven decisions. Over the past several years the partners have made multiple pivots in how they deliver their service lines, adding, repricing, and reweighting procedures based on what the data showed about volume, reimbursement, and margin. Practice income has grown substantially and repeatedly as a result.

The practice is also permanently deal-ready. The accrual-based financials, reconciled balance sheet, and QoE framework remain in place and current, so if the partners choose to go to market again, the preparation is already done and the earnings story is one they have been living with and refining for years.

Why It Matters

The most valuable outcome of this engagement was not the transaction. It was what the partners learned about their business once they could see it, and what they did with that knowledge.

Physician owners are often exceptional at medicine and underserved by their financial reporting, not because they lack the appetite for information but because nobody has built reporting that matches how they think. Given weekly, granular, reliable data, this CEO did exactly what a strong operator does: he changed the business, repeatedly, in the direction the numbers pointed.

If your practice is considering a sale, or simply running on cash-basis books and a monthly P&L that arrives too late to act on, let’s talk about what a real-time view of your practice would show.