Pre-Acquisition Readiness Checklist
The questions to answer about a healthcare target before preliminary research becomes formal due diligence.
Answer these questions before you request the data room.
Preliminary research on a healthcare target should organize what is knowable from public information and authorized materials, surface the questions that matter, and decide whether deeper diligence is worth the cost. Work through each group below, mark what is known, unknown, or contradicted, and use the gaps to shape your document requests.
1. Market and referral environment
A target’s numbers only make sense in the context of the market it serves.
- Which service area does the target actually cover, and how does that compare with its license, certification, or stated footprint?
- Who are the principal referral sources, and how concentrated is the referral base in a few relationships?
- Which competitors serve the same referral sources, and what has changed in the market over the past three years?
- What public quality, satisfaction, complaint, or inspection information is available, and how does the target compare locally?
- Are there demographic, payer, or regulatory changes on the horizon that would change demand?
2. Quality, compliance, and survey history
Patterns matter more than any single finding.
- What do the most recent surveys, inspections, complaints, and plans of correction show?
- Are deficiencies, incidents, or grievances recurring in the same areas, or are they isolated events?
- Are policies current, and is there evidence they are followed in daily practice rather than kept on a shelf?
- Which regulatory, accreditation, or licensing events are scheduled, overdue, or pending?
- How are incidents and complaints investigated, and who reviews the results?
3. Census, payer mix, and reimbursement
Revenue quality is as important as revenue size.
- How has census or volume trended month by month, and what explains the changes?
- What is the payer mix, and how exposed is revenue to a single payer, contract, or rate decision?
- How do utilization, length of stay, or visit patterns compare with what you would expect for the setting?
- What is the condition of accounts receivable, denials, write-offs, and billing follow-up?
- Which revenue depends on authorizations, documentation, or coding practices that would need to be verified?
4. Operations and workforce
Find out who actually makes the organization run, and what happens if they leave.
- Who runs the organization day to day, and which functions depend on a single person?
- What are staffing levels, turnover, agency use, and open positions by role?
- Are credentials, training, competency, and background-check records complete and current?
- Which workflows rely on manual workarounds, spreadsheets, or undocumented practice?
- How are scheduling, productivity, and overtime managed and reported?
5. Technology, data, and documentation
Systems shape what can be verified now and what can be improved after closing.
- Which systems hold clinical, billing, HR, scheduling, and training records, and who owns the contracts?
- Can the target produce reliable reports on quality, productivity, and revenue without manual rework?
- How is user access controlled, and what happens to data, licenses, and integrations at closing?
- What documentation, training, or configuration would a new owner need in order to operate the systems?
6. Deal process and verification
Decide what must be proven, by whom, and before which milestone.
- Which findings must be verified from source records rather than management summaries?
- Which items require legal, accounting, valuation, coding, tax, or environmental specialists?
- What would need to be true for the first-100-day plan to work, and what would stop it?
- Which open questions are deal-breakers, which affect price, and which are post-close improvements?
Evaluating a healthcare acquisition?
Start with a confidential conversation about the target, the timeline, and the questions that matter most.
Discuss an Acquisition