5 Financial Metrics Every Behavioral Health Clinic Owner Should Monitor
As a behavioral health clinic owner, staying financially informed is not just about knowing your profits. It’s about understanding the core drivers of your business’s value. Whether you’re considering an eventual sale, seeking financing, or simply want to strengthen your operation, keeping track of the right metrics can be the difference between stagnation and smart growth. Below are five essential financial metrics every clinic owner should be monitoring — along with how to use them.
1. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
EBITDA provides a clear view of your clinic’s operating profitability by excluding factors like financing decisions and non-cash expenses. It’s a key benchmark used by buyers and lenders to evaluate performance.
Why It Matters:
A strong EBITDA margin — often 15 percent or higher in this industry — suggests operational efficiency and financial stability. It reflects the core cash-generating ability of your business.
Pro Tip:
Calculate EBITDA monthly and track changes over time. Are rising expenses cutting into it? Are new programs improving it?
2. SDE (Seller’s Discretionary Earnings)
SDE is the total financial benefit available to a full-time owner-operator. It includes net income plus any personal benefits, salary, discretionary expenses, and non-recurring costs.
Why It Matters:
Most small clinic valuations are based on a multiple of SDE. Knowing this number — and cleaning up your books to reflect it — can help you better understand your clinic's market value.
Pro Tip:
Review all personal or non-essential expenses running through the business. Removing or reclassifying these can give a more accurate view of profitability.
3. Revenue Per Clinician
Divide your total annual revenue by your full-time equivalent (FTE) clinical staff. This metric helps identify productivity, capacity utilization, and potential for expansion.
Why It Matters:
Low revenue per clinician may indicate inefficient scheduling, low caseloads, or excessive no-shows. High revenue can suggest strong utilization or premium service pricing.
Pro Tip:
Set monthly targets for each clinician and monitor actuals. Use this data to inform hiring, rate changes, or program expansion.
4. Client Retention Rate
Retention rate tracks how many clients continue treatment beyond the initial few visits. It reflects both the quality of care and operational follow-through.
Why It Matters:
High retention usually correlates with strong outcomes, client satisfaction, and recurring revenue. These are qualities buyers and insurers prioritize.
Pro Tip:
Segment retention by clinician, payer type, or service line. You may find gaps that can be corrected with better training or engagement strategies.
5. Payer Mix and Average Reimbursement Rate
Understanding your payer mix helps you assess revenue reliability and vulnerability to policy changes. Your average reimbursement rate per session is a key profitability driver.
Why It Matters:
Overreliance on Medicaid or one payer increases risk. Tracking average revenue per encounter helps guide negotiation strategies or pricing models.
Pro Tip:
Review reimbursement rates quarterly. Seek credentialing with new payers or renegotiate rates as your clinic grows.
Bonus Metric: Days in Accounts Receivable (A/R)
This is the average number of days it takes to collect payment. A high number indicates cash flow issues or billing inefficiencies.
Why It Matters:
Delayed collections can lead to tight cash flow even when revenue looks good on paper.
Pro Tip:
Aim for under 45 days. Consider software tools or outsourced billing support to accelerate reimbursement.
Conclusion
Monitoring the right financial metrics is not just a back-office function — it’s a strategic advantage. By understanding and optimizing EBITDA, SDE, clinician productivity, retention, and payer mix, you position your clinic for stronger performance, increased value, and smoother transitions. Whether your goal is growth, sale, or long-term sustainability, these numbers are your starting point.
Ready to see how your clinic stacks up? Get an Unbroker FairVal™ estimate to understand what your business might be worth — and what steps to take next. Book a call today to speak with one of our experts.
