Simple Math: Fewer Brands, Bigger Valuations

Why single-branded health systems carry higher total brand valuations

Paul Schrimpf, Christine Arbesman

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Nearly every major health system acquisition evaluates and quantifies its brand as part of the transaction. The brand operates as an intangible asset representing physician trust, patient loyalty, and community reputation.

Consider two relatively recent megadeals: CVS Health’s $10.6 billion purchase of Oak Street Health and Amazon’s $3.9 billion purchase of One Medical. Neither disclosed a standalone brand figure, but running either through a standard brand valuation model, each brand likely lands in the $100 million to $200 million range. Now think of other assets of a health system that are worth over $100 million. The value of a brand (or brands) plays a very active role in the overall valuation of a health system.

Outside the US, many international regulatory bodies require organizations to routinely report the value of their brands. This is the role of the international standard, ISO 10668, which defines the generally accepted methodology for calculating brand value. This is all to say that a brand, or a portfolio of brands, has real monetary value that plays an active role in business transactions.

Most organizations know this, but few calculate it regularly. Many make the mistake of assuming that more brands means a higher collective valuation. The opposite is true, particularly with health systems. The law of averages takes over: the number in the denominator is more detrimental than the numerator. Put plainly, the more brands a system carries, the greater the dilution. It occurs in three main areas: the number of competing system brands it outperforms, employment attractiveness for clinicians, and leverage in payer negotiations.

Competitiveness of the Brand versus Other Systems

This dimension works for both patients and clinicians. How likely is a mother to choose a given system for pediatric care, and how likely is a PCP to refer her patients to that system’s specialists? Brand strength is not absolute; it’s relative. One cannot have their appendix removed by two providers. Healthcare is built around isolated, single-choice experiences.

Is the average brand in a health system preferred over five other competitive brands? Ten? Twenty? Let’s look at Sanford Health, based in Sioux Falls, SD. It primarily competes with one other system in the Sioux Falls metro, and a handful of smaller players, physician groups, and specialty practices. Let’s say it’s consistently preferred over seven other alternatives. Outside of Sioux Falls, it operates in several other states. By using that same brand, it can be declared that Sanford Health is preferred over a dozen other brands, maybe two or three dozen if we count smaller players. A brand that is more attractive than twenty others is more valuable than four brands that are more attractive than five others each. A fragmented portfolio is also more expensive to manage. The valuation dilutes, and brand operations costs go up. As a mental exercise, imagine Amazon used a different brand in each of the 50 states. Would those fifty individual brands be worth more or less than that one powerful Amazon brand?

Employment Attractiveness for Clinicians

It’s common knowledge that patients tend to be much more loyal to the clinicians they see than the company they are employed by. It is rare for a patient to willingly switch primary care providers or their specialists. And if their doctors move to another organization, they most often follow them. Therefore, a health system’s brand value plays a bigger role in attracting and retaining clinical talent. Win with the clinicians, and patient volume follows. And let’s not forget, health system revenue stems from reimbursable events, and those are tied to physician actions. Physicians are as much revenue streams as they are costs.

Today, most doctors and nurses feel they need to regularly switch employers to advance their careers. A substantial share of physicians, APPs, and nurses leave their first employer within two years, especially early-career nurses and APPs. And it is safe to assume most physicians will have several employers over their careers. Clinicians employed by large, well-run health systems may change employers less often because these organizations can offer stronger support, more stability, and clearer internal career pathways. The key word in that sentence is “and”, as well-run, support, and stability are as important as size. But size does heavily correlate with more internal career pathways. If a system is carrying multiple brands, those perceived pathways shorten and become less attractive.

Leverage in Payer Negotiations

Provider and payer disputes in 2025 reached an all-time high, including high-profile standoffs where leading payers told large providers, “You’re not that important, and we don’t need you.” And as insurance costs climb, more households are turning to narrower networks to control premiums. The moment of truth for most provider selections is no longer a care event; it’s open enrollment. The fewer networks a system is in, the more it misses out on annual patient volume from certain populations.

Let’s go back to the Sanford example. If that brand is only tied to their Sioux Falls locations, a payer like UnitedHealthcare could argue that its patients still have access to Avera Health, another very strong health system. But since Sanford Health uses the same brand across several states, UnitedHealthcare isn’t just weighing coverage for its Sioux Falls population; it’s also weighing the ramifications if it curtails coverage across SD, ND, MN, IA, WI, WY, and the UP of MI. A single-branded health system raises the cost to a payer of walking away from a dispute. Multi-branded systems give payers leverage to pick and choose. As such, fewer strong brands lead to higher brand valuation.

Valuations Are Always Future-Looking

Just like business valuations are always centered around future value, so are brand valuations. Nobody pays a premium for a business because it was successful in the past; it’s the belief that it will generate value in the future. All brands have a history, nostalgia, and sentimental value. Therefore, every brand has equity, as somebody somewhere is aware of it and likely thinks fondly of it. Retiring a brand retires its value. This is true. But holding onto every legacy brand means staying perpetually linked to undervalued brands.

At some point, an organization has to move away from sunk costs, or in this instance sunk value, and embark on building an asset portfolio that is more efficient to manage and is associated with a higher multiple in its value. That asset is the brand portfolio. One brand (or at least a few) that can outperform a growing list of competitors, attract and retain top talent, and work as a powerful negotiating lever with payers will always be worth more than a fragmented brand portfolio. Anyone conducting a brand valuation assessment will identify whether the brand is an accelerator to enterprise value, or a drag. It’s not one-for-one, but a single strong brand normally carries a multiple and is seen as an attractive asset. Meanwhile, a large, fragmented brand portfolio is often tied to operational inefficiency, and creates a drag on enterprise value.

One last dose of reality: not every health system deal includes a brand valuation at all. In most other industries, the exercise is universal. Nobody buys a beverage company or an apparel label without pricing the brand. But in some health system transactions, the deal team never even qualitatively assesses the acquired brands. They’re treated as not worth the time. Think about what that says: in the eyes of investors, many health system brands carry so little equity that nobody bothers to measure them. And if a brand’s asset value is negligible, then retiring it carries little risk, and the decision comes down to brand operating costs. Every road leads back to the same answer: a consolidated brand. That’s the opportunity. The math is simple. Most systems just aren’t doing it.