Physician Practices NAICS 621111

Sep 3, 2025 - Physicians Often Leave After Private Equity Firms Sell Medical Practices

• Private equity’s (PE) growing presence in health care is driving higher physician turnover and consolidation, according to Harvard Business School researchers. Professor Leemore Dafny and co-researchers found that physicians were likelier to leave their practices after PE investors exited, and those leaving were likelier to join larger practices, creating a ripple effect of talent consolidation and, as prior research shows, higher costs. Private equity firms typically hold medical practices for three to seven years, often consolidating them. Most sales, Dafny notes, are to other private equity firms. The data varies, but past studies have shown that many patients stay with their primary care physicians far longer, even for more than a decade. Those long-standing relationships lead to better care and health outcomes, prior research has found.
• Hospitals are buying small physician practices and that is driving up the price of care, according to the National Bureau of Economic Research (NBEA). About 42.2% of physicians worked in private practices (a practice that was wholly-owned by physicians) in 2024, down from 60% in 2012, according to the American Medical Association's Physician Practice Benchmark Survey. Health systems see opportunities to achieve more clinical integration and expand referral networks by acquiring independent physician practices. The acquisitions aren't limited to hospitals: Private equity, insurers, and businesses like Amazon are also acquiring medical practices from doctors facing declining reimbursement and high overhead costs.

• There were 3,943 physician practice management (PPM) transactions in which private equity firms (PE) were involved during the past 10 years, according to Pitchbook. PEs focus on acquiring a sizable practice or a platform investment in the physician practice segment and then use this corporate foundation to expand through add-on acquisitions. The demand from PE remains robust, according to Pitchbook, resulting in a wave of outreach to physician practice owners nationwide.
• Physician practice employment and average wages for nonsupervisory employees increased slightly during the first six months of 2025, according to the US Bureau of Labor Statistics (BLS). Revenue for physician offices increased 9.3% year over year and 3.9% quarter over quarter in the fourth quarter of 2024, according to the US Census Bureau. The Producer Price Index for physician practices increased 1.76% year over year in July, according to the BLS.