Few topics in practice management generate as much debate right now as private equity’s push into physician practices. PE firms have acquired over 5,779 physician practice sites across 307 metro areas as of 2021, up from just 816 a decade earlier. They now own roughly 488 hospitals in the U.S., about 8.5% of all private hospitals, with Apollo Global Management alone controlling 235 of them. The expansion has been fast, aggressive, and largely invisible to the public. But physicians are paying close attention.
When we polled over 1,200 physicians on Sermo about their experiences with private equity, 78% said they believe PE investment could compromise patient care. At the same time, 71% said they’ve never personally dealt with a PE firm as part of their practice. That means most doctors are watching this shift from the outside, trying to figure out what it means for their careers and their patients.
Physicians on Sermo are sharing firsthand experiences with PE ownership, comparing contract terms, and discussing how corporate acquisitions are changing patient care. Join the community to see what your colleagues are saying.
Private equity in healthcare: why are physicians selling?
The private equity playbook in healthcare is fairly straightforward. PE firms acquire practices, consolidate operations, optimize for profitability, and typically sell within three to seven years. The goal is to increase the practice’s value during that window and flip it for a significant return, often to another PE firm. The pitch they make to physicians is that PE handles all the administrative headaches, while you get to focus on practicing medicine.
To understand why doctors are agreeing to sell and take the deal offered by these firms, you have to look at the financial pressures that have been building for years. When adjusted for inflation, Medicare physician payments have declined 33% from 2001 to 2025. Practice costs went up 3.5% in 2025 alone, while Medicare physicians simultaneously got hit with a 2.8% payment cut. Add rising administrative burden and growing competition from hospital systems and retail health clinics, and the math gets more difficult for independent practices. For a lot of physicians, selling to a PE firm looks like a way out of the financial and administrative grind, with the added promise of a significant buyout and someone else handling the business side.
You can see the results of these shifts clearly in the ownership data. The share of physicians in private practice dropped from 60.1% in 2012 to 42.2% in 2024. Over the same period, physicians working in hospital-owned practices grew from 23.4% to 34.5%. Dermatology, ophthalmology, gastroenterology, and primary care have been among the specialties most heavily targeted by PE firms. From 2019 to 2023, 65% of physician practice acquisitions were made by private equity groups, and PE ownership of practices rose to 6.5% in 2024.
There’s also a legal structure worth understanding before signing any PE deal. Most states prohibit corporations from directly owning physician practices under what’s known as the corporate practice of medicine doctrine. PE firms get around this through Management Services Organization (MSO) structures, in which the PE firm owns the business operations but the physician retains clinical ownership on paper. In practice, though, the MSO arrangement gives the PE firm control over billing, staffing, purchasing, and most of the operational decisions shaping how medicine gets practiced day to day.
How PE acquisitions are affecting patient care and outcomes
In some markets, PE firms have built serious dominance in specific specialties, exceeding 30% market share in 108 metro-area specialty markets and topping 50% in 50 of those markets. That kind of concentration gives PE firms outsized influence over pricing, staffing, and which services are available in a community, especially in rural markets.
When we polled physicians on Sermo about whether private equity investment could compromise patient care, 78% said yes. That number is hard to dismiss, and it’s backed up by broader research. A 2025 Sermo Barometer survey of over 500 physicians found that 54% believe PE investments have decreased the quality of care. Only 2% said PE significantly improved it.
The Steward Health Care bankruptcy in 2024, followed by six hospital closures announced in 2025, is one of the most visible examples of what can happen when a PE-backed health system collapses, leaving communities scrambling for alternatives.
Physician turnover is one of the most well-documented consequences of PE ownership. PE-acquired ophthalmology practices saw a 265% increase in turnover within three years of acquisition. A JAMA Health Forum study found that when PE firms exit by selling the practice to another buyer, physicians are 16.5 percentage points more likely to leave within two years than in non-PE practices. Only 44% of doctors at PE-acquired practices stayed after a sale, compared to 60% at comparable non-PE practices. Those departures break patient-physician relationships that often go back a decade or more.
PE firms also operate with limited transparency. They don’t have to disclose the details of their acquisitions publicly, and the Federal Trade Commission’s threshold for reporting is $126.4 million for 2025. Transactions below that value fly under the radar, meaning most physician practice acquisitions happen without any regulatory review.
A Sermo member and GP put it in terms that data alone can’t convey. “The main thing for me, whether in a private or public system, is to have all the resources and the established human capital to help the patient. But above all things, always see the patient with humanity and not as the reason that increases the salary per capita of an institution.”
Another GP on Sermo was blunt about where the line should be. “One must be firm when it comes to respecting the patient autonomy, regardless of who is your financial sponsor.”
How PE may encourage overtreatment to increase medical practice profits
This is the concern that comes up most in PE discussions on Sermo. When we asked whether private equity firms may encourage overtesting or overtreatment for profit, 82% of responding physicians said yes. The research supports that worry in certain specialties but the picture is more nuanced than a simple yes or no. Here’s what the data shows so far:
- Higher charges and billing volume: PE-backed dermatology, gastroenterology, and ophthalmology practices saw average increases of 20% in charges per claim and 26% in billing volume after being acquired.
- Questionable clinical necessity in gastroenterology: PE-acquired GI practices performed more endoscopies after acquisition, but didn’t find more polyps or tumors, raising real questions about whether those additional procedures were clinically justified.
- Upcoding patterns: after PE takeovers, a higher percentage of visits werebilled as lasting more than 30 minutes with the patient. Practices also saw more new patients and more fee-generating procedures immediately after acquisition.
- Specialty targeting: PE firms focus on specialties with high-margin, office-based procedures like dermatology, GI, ophthalmology, and urology because they offer recurring revenue and fragmented markets that are easier to consolidate.
A family medicine physician on Sermo shared their firsthand experience with a PE-owned practice. “Private equity firm could help with financial support, but they won’t. They will encourage in house referrals and in house testing. The major things my company did was encourage insurance company contracts where they were paid a monthly capitation fee. Then tried to discourage visits from patients and testing. This is not to patient’s benefit.” The physician went on to describe how promised profit-sharing never materialized and how they eventually bought their practice back and returned to independent practice.
An ophthalmology physician on Sermo didn’t mince words. “Private equity has only one methodology = buy something, then invest in it & make it more profitable, then UNLOAD IT FOR CONSIDERABLY MORE than you paid and invested. You have to be naïve to believe they are going to give you their money and then let you control the profit outcome.” Their advice for any physician considering a PE deal was to find a high-quality attorney before signing anything.
An emergency medicine physician on Sermo put the focus back on patients. “Unfortunately most of the equity firms solve their own interests without thinking on the wellbeing of the patient despite of their ‘ethics.’ The benefits could be a lot, but we must put the patient first and what the patient actually needs.”
Can physicians maintain autonomy under PE ownership?
Many doctors who sell to PE expect to keep practicing as before, but the evidence suggests PE ownership changes practice dynamics in ways that chip away at clinical independence over time.
When we asked physicians on Sermo whether they believe doctors can maintain autonomy in patient care decisions in partnerships with private equity firms, 57% said no. But 43% said they believe it’s possible, and 61% said PE investments could positively impact patient care through financial support and innovation. Physicians can see the potential upside of PE capital, but most remain skeptical that autonomy survives the arrangement in practice.
The autonomy paradox: clinical vs. structural control
Clinical autonomy and structural autonomy are two different things, and PE ownership tends to affect them differently. Clinical autonomy is your right to make medical decisions for individual patients. Structural autonomy means controlling how the practice operates, sets financial priorities, and allocates resources. Under PE ownership, you may still decide what to order and how to treat, but the PE firm decides how many patients you see per day, which services stay open, how many staff get hired, and whether the practice invests in new equipment.
The promise vs. the reality
The pitch from PE firms is genuinely appealing. They handle billing, HR, compliance, and administration, and you just take care of patients. For physicians drowning in paperwork, insurance hassles and staff budgets, that sounds like real relief.
But the turnover data tells a different story. Two years after a PE firm sells a practice, only 44% of the original physicians are still there, and the patient relationships that took years to build often don’t survive the transition. PE firms set profit targets and financial benchmarks that trickle down into every operational decision. You might still technically make the medical decisions, but the environment around those decisions is being shaped by people whose primary obligation is to investors, not patients.
Some physicians are pushing back. More doctors are unionizing or forming advocacy groups to protect clinical autonomy under PE ownership, and hybrid models that blend physician ownership with PE capital are starting to emerge as alternatives. Right now, 27% of Sermo-surveyed physicians maintain full or partial ownership of their practice, which suggests that many doctors still see independent ownership as something worth protecting.
Physicians on Sermo aren’t holding back on this topic. A physiatrist on Sermo was direct. “Another path by which physicians lose autonomy. Money is power.”
A psychiatrist on Sermo raised a deeper concern. “Physician autonomy and patient care should not be compromised by any arrangement. The lure of extra income is sadly eating away at consciences.”
A GP on Sermo acknowledged that PE investment could work in theory, but was skeptical about how it plays out. “There is a big potential in this firms to help and manage efficiently people’s money but also there is a risk through the ‘autonomy’ of a Private administration of this firms which can play a role moving the balance towards the economical benefit from the financial group.” Their bottom line was a distinction worth remembering. “A happy client is not necessary a healthy one, that is the difference between doing what patient wants versus what patients need.”
A radiologist on Sermo stripped it down to the basics. “Private equity investors are not in for the long haul. Their goal is to increase profits and then sell. Doctors and patients are just commodities.”
An OBGYN on Sermo acknowledged the complexity of it all. “This is a very sticky subject. Physicians do not have a good track record of maintaining autonomy in patient care decisions in the face of external pressures.”
Key takeaways
- PE-acquired physician practice sites grew from 816 in 2012 to over 5,779 by 2021, with dermatology, ophthalmology, gastroenterology, and primary care being the most heavily targeted specialties.
- Financial pressures are a major driver of physician sales to PE. Medicare physician pay has declined 33% since 2001 when adjusted for inflation, and the share of physicians in private practice dropped from 60.1% to 42.2% over the past decade.
- 78% of physicians polled on Sermo believe PE could compromise patient care, and 82% think PE firms may encourage overtesting or overtreatment for profit.
- PE-acquired practices show measurable changes in billing behavior, including a 20% increase in charges per claim and a 26% increase in billing volume, with upcoding patterns documented across multiple specialties.
- Physician turnover spikes under PE ownership. Ophthalmology practices saw a 265% increase in turnover within three years, and physicians are 16.5 percentage points more likely to leave after a PE exit.
- PE firms preserve clinical autonomy on paper but erode the structural autonomy that physicians need to truly control how they practice medicine.
Navigating the PE landscape as a physician
Whether you’re considering a PE deal or already practicing under PE ownership, the questions that matter are practical ones. What happens to your clinical independence when financial targets conflict with patient needs? What does the exit plan look like, and who decides what happens to the practice when the PE firm sells? What are the non-compete terms if you decide to leave?
The research is still catching up to how fast PE is moving into medicine, which makes physician-to-physician conversations even more valuable. Sermo is where over 1 million physicians are having these conversations. Doctors are sharing what they wish they’d known before signing, comparing contract terms, and talking through what PE ownership actually looks like once the ink is dry. Join the conversation to hear from peers who have navigated it themselves.
