Financial & Operational Due Diligence
Each healthcare transaction is unique—and due diligence should do more than confirm the numbers. We help buyers and sellers assess sustainable earnings, cash flow, and operational readiness to support confident valuation and post-close execution.
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Transaction due diligence is often treated as a required step to confirm what’s already known. In healthcare, that approach can fall short. Value and risk rarely live solely in financial statements—they show up in reimbursement dynamics, revenue cycle performance, provider compensation structures, staffing models, clinical workflows, and the operational decisions that ultimately shape cash flow and durability of earnings.
Financial Due Diligence (FDD)
Financial due diligence (FDD) in a healthcare transaction is focused on understanding the true, sustainable earnings and cash flow of the business. This typically includes a Quality of Earnings (QoE) analysis to normalize EBITDA by identifying non-recurring, non-operational, or owner-specific items, as well as assessing revenue quality, payer mix, reimbursement trends, working capital needs, and key financial risks. In healthcare specifically, FDD places heavy emphasis on revenue drivers such as volume vs. rate, contractual adjustments, provider compensation structures, bad debt policies, and exposure to reimbursement or regulatory changes that could impact future performance.
Operational Due Diligence (ODD)
Operational due diligence (ODD) evaluates how the healthcare organization runs day-to-day and whether its operations can support the investment thesis post-close. This includes assessing clinical operations, staffing models, provider productivity, scheduling, capacity utilization, supply chain management, revenue cycle effectiveness, IT systems, compliance infrastructure, and scalability of processes. In healthcare, ODD often dives into areas like billing and coding accuracy, clinical workflows, care delivery models, referral patterns, and reliance on key providers or managers, factors that can materially affect both growth potential and risk.
Why Combining FDD and ODD Matters
Together, financial and operational due diligence provide a holistic view of value and risk in a healthcare transaction. Financial diligence quantifies what the business is truly earning today, while operational due diligence explains why it performs that way and whether those earnings are sustainable, scalable, and improvable over time.
Our approach is not solely about assessing and reviewing. We help clients identify practical opportunities for value creation and risk mitigation—often providing the foundation for post-merger integration planning. When aligned, these workstreams help buyers validate valuation assumptions, identify integration and value-creation opportunities, and avoid surprises related to execution, scalability, or performance after the deal closes.
Because each potential transaction is unique, our conclusions and recommendations are tailored to the organization’s specific operating realities and market context, informed by regional and national benchmarks.
Experts, focused on your needs.
Why Trust Coker
For more than three decades, Coker has been a trusted partner to healthcare leaders and investors, delivering clarity, compliance, and confidence through every stage of the transaction and beyond.
Positive outcomes are possible for you and your patients.
We approach every engagement with a results-driven mindset, leveraging our deep industry expertise and data-driven insights to develop strategies that drive meaningful, measurable improvements in performance.
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We partner with clients to navigate the dynamic challenges of managing a high-performing physician enterprise.