Private equity acquisition isn’t just changing the structure and ownership of healthcare systems — it is impacting practice conditions, physician autonomy, and job satisfaction overall. When physicians become employees of investment firms, their decision-making process may be required to prioritize short-term practice profitability alongside or even over patient outcomes. 

Private Equity Acquisition: The Scale of the Problem

When a private equity firm acquires a medical practice, they typically focus on bringing in more revenue quickly. To do this, they may ramp up hiring while also implementing standardized processes and looking for ways to cut costs. The problem is that these measures ultimately create more work for doctors and result in reduced physician retention over the long-term.

One study found that after a private equity acquisition, physician departures increase by 265% compared to non-acquired practices, despite an initial hiring surge. In ophthalmology alone, PE-acquired practices saw a 46.8% increase in total clinician employment within three years but simultaneously experienced an annual increase of 13 percentage points in physician turnover. Most of those leaving were experienced doctors between 40 and 60 years of age.  In other words, the initial hiring effort didn’t benefit the practices overall. 

This data reveals a troubling pattern: as private-equity ownership increases, physician satisfaction and retention plummet, especially among experienced physicians. The result is that while accelerated hiring may initially bring in more patients (and more revenue), experienced physicians often leave the practice and may be replaced by less experienced doctors or nurse practitioners. Patients may lose trusted providers, continuity of care may suffer, and doctor-patient relationships may take a backseat to financial performance metrics. 

Take a look at the following impacts:

  • Patient Experience – Patients report worsening experiences at hospitals following private equity acquisition.

  • Physician Turnover – Physicians who work in private equity-owned practices are 16.5% more likely to work in a different practice within two years following a private equity sale as compared with physicians in similar practices that are not PE-owned.

  • Adverse Patient Events – A 2023 study reported that hospitals experienced a 25.4% increase in overall adverse patient events like falls and surgical infections following private equity acquisition, despite fewer surgeries being performed.

  • Workforce Composition – Continuity of care is associated with better patient outcomes. When a private equity firm acquires a practice, however, physician turnover rises, and doctors are often replaced with advanced practice providers such as nurse practitioners or physicians’ assistants. While long-term impacts remain to be seen, disruptions to continuity of care may impact patient experiences and outcomes overall.

Why Physicians Leave After Private Equity Acquisition

While some studies show less severe impacts, the clear trend is that PE acquisition increases the likelihood of physician turnover and declining patient experiences. But why are doctors leaving these practices? Research suggests at least three significant reasons:

1. Corporate Efficiency vs. Clinical Judgment

Private equity investors make money by purchasing a company, increasing its value, and then selling it for more than they paid. To do this, firms must be laser-focused on efficiency and cost reduction, sometimes at the expense of clinical judgment and individualized patient care. In one survey, nearly 60% of physicians said corporate ownership reduced their clinical autonomy and negatively impacted patient care.

2. Clinical Impacts of Metrics-Driven Operations

PE ownership introduces new financial expectations that directly impact clinical decision-making. Productivity quotas, procedure volume targets, and in-network referral requirements can create pressure to prioritize volume over value.For example, suppose a physician is required to limit face-to-face time with patients to 15 minutes per appointment. This could increase the number of patients seen, but it could also reduce quality of care and patient experience.

3. Increased Administrative Burden

New reporting requirements and reductions in clinical staff may place the burden of documentation and reporting on physicians. Often, this added workload increases pressure on physicians while reducing time spent with patients—a formula that accelerates burnout and dissatisfaction

How Virtual Care Supports Practice Independence

For these reasons and others, many physicians are looking for ways to avoid private equity acquisition and retain practice independence. To do so, they need solutions that can provide financial stability without sacrificing clinical autonomy.

Chronic care management (CCM) and remote patient monitoring (RPM) help accomplish this goal by adding new, reliable revenue streams without increasing administrative burden. These programs also align with value-based care delivery models that increasingly define healthcare reimbursement.

Unlike PE acquisition, which typically involves significant operational overhaul, CCM and RPM programs can easily integrate into existing practice workflows and serve as an extension of the practice team. When leveraged effectively, they help practices improve patient access to care, maintain independence, and improve patient outcomes.

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