Private equity is buying medical practices at a pace that should make every practice owner sit up and pay attention. In 2025 alone, the Private Equity Stakeholder Project tracked 1,029 PE-backed healthcare deals: 151 leveraged buyouts, 664 add-on acquisitions, and 214 growth investments involving 420 platform companies and 708 investment firms (PESP, Feb 2026).
That’s not a trend. That’s an industry being restructured.
If you own a practice, you’re either going to be the one who sells smart, the one who gets squeezed by PE-backed competitors who outspend you, or the one who understands the game well enough to play it on your own terms. There’s no fourth option where this doesn’t affect you.
Why PE Wants Healthcare
The logic is simple. Healthcare is recession-resistant, has predictable revenue, and most practices are badly run from a business perspective. That’s not an insult. It’s an opportunity PE firms see clearly.
Think about it from the buyer’s perspective. A dermatology practice with $2 million in EBITDA, a loyal patient base, three locations, and an owner who works 60-hour weeks running everything himself? That’s an asset sitting on untapped value. The PE playbook is straightforward: buy the platform, professionalize operations, bolt on smaller practices as add-ons, and sell the whole thing in 5-7 years at a higher multiple.
According to Holt Law’s analysis (Jan 2026), the era of mega-buyouts is over. Capital has rotated out of labor-heavy provider services like nursing homes and into pharma services, health IT, and outpatient specialty care. Cardiology, orthopedics, and dermatology are the sweet spots. The strategy is what they call the “platform and add-on super-cycle.” Buy one good practice, then bolt smaller ones onto it until you’ve built something worth 2-3x what you paid for the pieces.
Dermatology alone saw 16 buyout deals through October 2025 (FOCUS Investment Banking). Most were PE-backed add-ons. If you’re a dermatologist, there’s a decent chance the group practice that just opened across town is backed by a firm on Wall Street.
What They’ll Pay
This is where it gets real. Here are the EBITDA multiples from First Page Sage’s analysis (Q1 2022 through Q1 2025):
Plastic Surgery: 7.3x ($1-3M EBITDA), 9.7x ($3-5M), 11.3x ($5-10M)
Dermatology: 5.4x ($1-3M), 7.3x ($3-5M), 8.3x ($5-10M)
Hospitals: 6.3x ($1-3M), 8.2x ($3-5M), 9.7x ($5-10M)
General Medical Practices: 5.6x ($1-3M), 7.1x ($3-5M), 8.8x ($5-10M)
Medical Devices: 6.7x ($1-3M), 8.3x ($3-5M), 10.4x ($5-10M)
The overall range runs from 6x to 12x EBITDA, with PE-backed platforms commanding 10-12x and smaller practices sitting at 6-8x (Sofer Advisors, 2026). Revenue multiples run 0.5-1.0x annual revenue.
What does this mean in real money? If your practice generates $1.5 million in EBITDA and you’re a plastic surgeon, you’re looking at a potential valuation of $10.9 million to $14.5 million depending on your size bucket and growth trajectory. Even primary care, which sits at the lower end at 3-6x EBITDA, can produce meaningful exits.
A single turn improvement in your multiple can translate into millions of dollars in transaction value (FOCUS Investment Banking, 2026). That’s why the marketing and operations you build today directly affect what your practice is worth tomorrow.
What PE Firms Are Actually Looking For
I’ve spent enough time in the PE advisory world to tell you that the checklist is shorter than most brokers would have you believe. Here’s what actually moves the needle.
Quality of earnings. Clean, recurring, growing EBITDA. If your books are a mess, if your revenue is lumpy, if your margins are shrinking, nobody’s paying a premium. PE firms will hire a QofE firm to rip apart your financials before they write a check. Every adjustment that comes back negative costs you money on the deal.
Scale and multi-location potential. A single-doctor practice in one location is a job, not a platform. PE firms want practices they can replicate. Multiple providers, multiple locations, documented systems. The practice that runs the same way whether you’re there or on vacation is worth dramatically more than one that falls apart when the owner takes a day off.
Ancillary revenue streams. Aesthetics bolted onto dermatology. In-house lab work. Imaging. Pharmacy. Every service you can capture in-house is revenue that doesn’t walk out the door. PE firms love ancillary revenue because it increases per-patient value without increasing patient acquisition costs.
Favorable payer mix. Commercial insurance patients are worth more than Medicare and Medicaid patients to a buyer. Cash-pay aesthetics patients are even better. If your payer mix is 80% government, your multiple will reflect that. If it’s 60%+ commercial with a growing cash-pay aesthetic line, you’re in a different valuation conversation entirely.
Credible growth trajectory. Flat revenue for five years tells a buyer that you’ve hit your ceiling. A documented growth trend with clear marketing attribution tells them there’s more upside. This is where smart marketing investment directly translates to higher exit valuations.
Low owner dependency. If you are the practice, if every patient comes because of your name, if nobody else can do what you do, you’re not building a business. You’re building a cage. PE firms discount heavily for owner dependency because the moment you walk away post-acquisition, the revenue might walk with you.
What Happens After the Check Clears
This is where most practice owners go in blind. The PE deal isn’t the end. It’s the beginning of a very different chapter.
Most deals include an earn-out component. You sell 60-70% of the practice today and retain 20-30% equity that vests over 3-5 years based on performance targets. Miss those targets and you left money on the table. Hit them and the second bite of the apple can sometimes be worth more than the first.
You’ll also typically be required to stay on for 2-3 years as a provider. You’re now an employee of the company you used to own. For some doctors, that’s liberating. No more worrying about payroll, HR, billing. For others, it’s suffocating. Corporate doesn’t care about the way you’ve always done things. They care about standardized processes, cost optimization, and hitting quarterly numbers.
The culture changes. The autonomy shrinks. The committees multiply. We see this all the time: the physician who sells and then can’t understand why the new owners want to change the scheduling template, renegotiate supply contracts, and replace the office manager who’s been there for 15 years.
The Real Strategic Question
Here’s what I tell practice owners who ask me about PE. You have three paths.
Path 1: Build to sell. I cover the specifics in my guides to medical practice valuation and exit strategy. Know your target buyer, know your target multiple, and reverse-engineer everything. Marketing spend becomes an investment with a measurable ROI that directly increases your exit price. Every dollar you spend growing EBITDA returns 6-12x at the closing table. Two to three years of preparation is recommended before going to market (Flychain, 2026).
Path 2: Build to compete. I lay out the full system in my practice growth framework. PE-backed practices will have deeper pockets, better technology, and more aggressive marketing. If you’re not selling, you need to build a practice that can compete with well-funded groups. That means superior marketing, superior patient experience, and operational efficiency that lets you deliver better care at competitive prices.
Path 3: Get acquired as an add-on. This is the path of least resistance. PE platforms are actively hunting for bolt-on acquisitions. You’ll get a lower multiple (6-8x versus the 10-12x the platform commands), but the deal is simpler and the due diligence is lighter. For a solo practitioner who wants out, this might be the right move.
What’s not a viable path? Ignoring the trend entirely. With 1,029 deals in a single year, PE involvement in healthcare is not a phase. It’s the new market structure. Whether you’re selling, competing, or positioning for acquisition, your marketing, your operations, and your growth trajectory matter more now than they ever have.
What This Means for Your Marketing
Every PE firm I’ve worked with evaluates marketing infrastructure during due diligence. They want to see:
- Attribution data connecting marketing spend to patient acquisition
- Consistent lead generation that doesn’t depend on the owner’s personal referral network
- Digital assets (website, content, local SEO presence) that have measurable value
- Documented marketing systems that can be replicated across locations
A practice that generates 80% of new patients from the owner’s personal reputation and referral network is worth less than one that generates 80% from a marketing machine that runs with or without the owner.
This is the piece most practice owners miss. Your marketing isn’t just about this month’s patient volume. It’s about what your practice is worth in 3, 5, or 10 years. When a PE firm looks at your marketing, they’re not evaluating your logo or your brand colors. They’re evaluating whether your growth is repeatable, scalable, and transferable.
Build accordingly.