Why More Physicians Are Rethinking Private Equity Acquisition in Healthcare

Over the last decade, private equity (PE) firms have drastically reshaped the healthcare landscape. Investors have acquired thousands of physician practices, outpatient clinics, and healthcare service organizations. They promise to ease physician dissatisfaction by increasing income and reducing administrative burden.

For many physicians, this sounds appealing. Administrative tasks like billing, insurance negotiations, and compliance regulations consume valuable time. PE offers the possibility of delegating these responsibilities, allowing providers to focus on administering quality patient care. Yet, reality often tells a different story.

As consolidation accelerates, an increasing number of physicians report that the promises of private equity-backed management service organizations fall short. Instead of relief, they encounter diminished clinical autonomy and pressure to prioritize profitability, often resulting in ethical dilemmas and physician turnover.

The Initial Appeal of Private Equity to Physicians

Private equity acquisitions are often marketed as strategic partnerships that help physicians grow their practices while reducing operational stress. They get drawn in by a few key promises that make PE deals appealing at first glance:

1. Financial security: Private equity acquisitions come with lucrative buyout offers, with investors typically paying 8-12 times EBITDA for large offices. Practices that provide specialty services or have a strong, established patient base are often highly sought after.

1. Administrative relief: PE firms often promote their management service organizations as a way to offload time-consuming administrative tasks such as billing, HR, and IT support.

1. Operational infrastructure and technology: Access to shared resources, including upgrading EHR systems and data infrastructure, is offered to practices.

In theory, these benefits could provide physicians with the extra help they need to focus on delivering quality care. For some, PE ownership has offered them temporary relief or short-term rewards.

However, the long-term consequences of these arrangements often differ from the promises made.

The Reality After Acquisition

Despite the promise of reduced stress and improved operational support, many physicians find that working under private equity-backed ownership feels more restrictive than freeing. While contracts may keep providers in place, the environment they’re working in often changes quickly and not for the better.

Diminished Decision-Making Power

When private equity firms acquire physician practices, they often centralize operational decisions, which limits physicians’ control over day-to-day management. A 2023 report by the American Antitrust Institute raised concerns that these firms introduce non-clinical oversight and financial priorities that may reduce physician autonomy and influence care delivery.

As a result, routine decisions such as staffing changes or purchasing new equipment may require approval from multiple administrative levels. These added steps can delay care and make it harder for providers to respond quickly to patient needs.

Physician Burnout

The disconnect between clinical priorities and business-driven goals contributes to growing dissatisfaction among providers. Roughly 60% of physicians report reduced autonomy as one of the biggest negative impacts of PE acquisitions, and about 70% say they feel pressure to see more patients. These pressures often translate into meeting rigid quotas or following workflows that emphasize efficiency over the quality of care delivered.

A study found that physician turnover increased by 265% following PE acquisition, with mid-career physicians most likely to leave. This level of turnover not only impacts staff morale but also threatens the long-term stability of the practice.

A Better Path Forward

The good news is that physicians don’t have to choose between burnout and buyout. While private equity models may offer short-term rewards, their long-term costs are becoming harder to ignore. That’s why more providers are exploring sustainable solutions that preserve autonomy, reduce operational burden, and support high-quality patient care without compromising their independence.

How CCM and RPM Support Practice Independence

For physicians seeking to maintain their independence while still addressing the operational and financial challenges that make PE appealing, chronic care management (CCM) and remote patient monitoring (RPM) programs offer sustainable alternatives.

Some benefits of CCM and RPM include:

1. Maintained clinical autonomy: Physicians retain full control over patient care decisions.

1. Reduced administrative burden: When outsourced to experts like HealthXL, program management—from patient eligibility and enrollment to billing and compliance—is handled smoothly and efficiently. In fact, these programs can even relieve the office staff of certain routine administrative duties, allowing them to focus on in-office patient care.

1. Improved patient outcomes: Regular contact and monitoring helps identify complications early, enhancing care quality and improving patient outcomes.

1. Expanded revenue stream: Consistent reimbursement helps boost practice revenue without the need to sell the practice.

By integrating these programs, practices can take a proactive approach to value-based care, improving their patients’ outcomes while growing practice revenue.

At HealthXL, we are committed to providing exceptional patient care while supporting practices with personalized, consistent services. Contact us to learn more!