Physician Practices NAICS 621111

May 1, 2025 - Private Equity Drives Industry M&A

• 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.
• Medicare reimbursement to physician practices is not keeping up with the cost of operating practices, according to the American Medical Association (AMA). Medicare payments to physician practices increased 7% since 2001 but the cost of running a medical practice increased 59% from 2001 through 2024, according to the AMA. Medicare physician payment has dropped 33% since 2001 after adjusting for practice-cost inflation, according to the AMA.

• Many physicians are joining new professional organizations created to oppose corporate influence in US medicine, according to The Wall Street Journal. Some groups work with lawmakers on legislation intended to limit private equity’s influence in healthcare. Others aim to educate peers about private equity’s impact on their profession. Nearly $1 trillion has been invested in the healthcare sector by buyout firms since 2012, according to The Wall Street Journal. Most analyses focus on how private-equity ownership affects patients but it has also imapcted physicians. Many are angry about losing autonomy and feel that Wall Street investors are standing between them and patients, according to Vicki Norton, an emergency doctor in Florida and the president-elect of the roughly 8,000-member American Academy of Emergency Medicine. The American Medical Association, the nation’s largest doctors’ organization, hasn’t taken a position on private equity in healthcare but it opposes the corporate practice of medicine and in 2022 passed a resolution against private equity’s involvement in medical training.
• Physician practice employment and average wages for nonsupervisory employees increased slightly during the first three 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. Physician practice prices increased slightly during 2024, according to the BLS.