M&A activity snapshot
Most U.S. physicians no longer work for themselves. More than four in five (82.0%) physicians were employed by hospitals or corporate entities such as private equity firms or health insurers as of January 1, 2026. Of that total, 59.7% of physicians were employed by hospitals; 22.3% were employed by corporate entities.
Practice ownership has followed. Hospitals and corporate entities acquired 85,000 additional physician practices from 2018-2026, totaling 157,200 (63.9%). Corporate ownership (33.2%) continued to outweigh hospital ownership, which is where MSO platforms sit.
Private equity's direct share is smaller but rising. In 2024, 6.5 percent of physicians characterized their practice as private equity-owned, up from about 4.5 percent in 2020 and 2022. Earlier research found PE-acquired practices grew from 816 practice sites across 119 MSAs to 5,779 practice sites across 307 MSAs between 2012 and 2021.
Specialty-level MSO deal counts are not published in a free, verifiable source, so this page does not cite one.
Who is buying
PE-backed MSO platforms are the main buyers of independent groups. Earlier waves targeted dermatology practices, followed by ophthalmology and gastroenterology. Named examples by specialty:
- Anesthesia: Welsh Carson created USAP in 2012 and built it through Texas acquisitions that the FTC later challenged.
- Gastroenterology: PE-backed GI platforms, including GastroHealth, and United Digestive, have now undergone a second round of recapitalization, per KPMG.
- Ophthalmology: Gryphon-backed Vision Innovation Partners, a leading Mid-Atlantic eye care platform with 68 locations, closed its 26th add-on in June 2025.
- Orthopedics: OrthoNY partnered with Zenyth Partners to form Evolve Orthopedic Partners, and Spectrum Orthopaedics in Maine partnered with Growth Orthopedics in early 2025.
Strategic buyers are increasingly the exit for PE platforms. OrthoAlliance was acquired for approximately $1.4 billion by SCA Health, part of Optum, at the end of 2024. SCA Health also bought GI group Capital Digestive Care from Kelso in 2022. Stout also notes interest in orthopedics from employee stock ownership plans (ESOPs), health insurers, and healthcare equipment and device manufacturers.
ENT and cardiology MSOs are active categories, but this page does not name platforms in them because no free primary source reviewed for this page documented them verifiably.
What buyers look for
Ancillary revenue is the main value driver. Stout reports orthopedic multiples run above many specialties due to the presence of ancillaries and ability for post-transaction income repair. Stout lists ancillaries such as an ambulatory surgical center, physical therapy, pain management, durable medical equipment, and imaging.
Independent supply is the second driver, and it varies by specialty. Private practice remains above half in orthopedic surgery (54 percent), ophthalmology (70.4 percent), while cardiology sits at 30.7 percent. Those independent groups are the add-on pool for platforms.
Regulatory exposure is now a diligence item on every deal. Investors typically reach physician groups through MSOs, which sell management services to a physician-owned practice. Oregon's corporate practice of medicine law, SB 951, takes direct aim at the management services organization (MSO) models through which private equity firms and strategic investors structure these relationships. Oregon also runs a Health Care Market Oversight (HCMO) program that reviews proposed health care business deals.
What makes a strong company
Groups that draw platform-level interest tend to show:
- Physician depth across ages, so earnings do not rest on a few partners near retirement.
- Owned or partnered ancillaries, such as an ASC, imaging, or therapy, that add earnings beyond professional fees.
- Clean coding, billing, and compliance records that hold up in diligence.
- Partner agreement on post-close compensation, since the scrape sets the EBITDA a buyer pays for.
- Market share that will not trigger antitrust or state review. The FTC case turned on a buyer buying up nearly every large anesthesia practice in Texas.
Valuation and deal structure
Multiples depend on specialty, size, and whether the group is a platform or an add-on. In orthopedics, Stout observes midsized orthopedic practice transactions with EBITDA multiples ranging from the high single digits to low double digits. It adds that larger platform acquisition multiples are typically in the mid-teens range, while smaller tuck-in acquisitions are in the mid-single digits range.
PE deals pay more upfront and hold back part of the price as equity. The amount of rollover equity typically ranges from 20 to 40 percent of the total purchase consideration. EBITDA is created through a reduction in total cash compensation for the sellers (known as a scrape), and much of the consideration is often structured as personal goodwill.
Hold periods shape exit timing. KKR held Covenant Physician Partners for an approximate seven-year holding period before selling it to Tenet's USPI. Rollover equity is only realized at the platform's next sale, so sellers carry that timing risk. None of this is individualized advice; deal terms vary widely.
Outlook
Expect more second-round sales over the next 12-24 months. Provident expects transaction activity to accelerate in 2026 as several leading platforms reach the end of their typical private equity holding periods. GI platforms have already undergone a second round of recapitalization.
State review will slow and reshape deals. Oregon's SB 951 MSO rules apply to all new MSO arrangements starting in 2026, with existing arrangements given until January 1, 2029. In October 2025, California's healthcare transaction review law was amended to add PE funds and MSOs as noticing entities. Owners in those states should budget more time for closing.
Own a physician practice and want a baseline before you talk to an MSO? Run the valuation tool. Back to Healthcare Services M&A. See also: why vertical-specific buyers outperform generalists in outbound.