What medical practices need to know about the private equity resurgence

For years, the story was simple: private equity firms were on a "buy-and-build" tear, snapping up practices and rolling them into massive conglomerates. But looking at the landscape today, things aren’t quite that simple anymore. While the initial frenzy has cooled, a much more mature—and potentially more rewarding—model of partnership is taking its place. According to Bain & Company’s Global Healthcare Private Equity Report 2026, the industry has moved from a period of raw consolidation to an era where operational excellence is the only way to win.

A shift in strategy: It’s not just about scale anymore

Many physicians are wary of selling to private equity because they fear losing autonomy or seeing the quality of care dip in the name of profit. But Kara Murphy, co-leader of Bain & Company's Global Healthcare Private Equity team, suggests that the current environment is more nuanced. “Physician groups remain a popular investment theme within the provider sector, though the pace of investment has eased since 2021 in part due to macro challenges after the Covid-19 pandemic,” says Murphy.

The macro challenges she refers to aren't just empty buzzwords; they are the labor shortages and reimbursement pressures common to medical practices. Because of these hurdles, investors have had to change their tactics.

“Importantly, the value-creation playbook has expanded beyond traditional buy-and-build strategies,” says Murphy. “Investors are increasingly focused on operational excellence including improvements in access, workflow, and care coordination enabled by the use of data, analytics, and AI; deeper physician alignment; and sustainable, organic growth.”

Private equity buyers are less interested in how many locations you have and more interested in how well those locations actually function, experts say. They are looking for sophisticated operating models that deliver value across stakeholders: patients, clinicians, payers, and investors alike. According to the Bain report, the most successful platforms are the ones that can turn a "loose confederation" of practices into a truly coordinated system with shared infrastructure, ultimately positioning themselves as employers of choice.

Which specialties are getting the most calls?

Investors are targeting areas where scale can solve specific financial headaches, according to the Bain report.

1. Specialty Pharmaceuticals: If you’re in oncology, neurology, or urology, you know the rising cost of drugs is a constant battle. Investors love these fields because scale platforms can provide the disciplined management of the rising cost and complexity of specialty pharmaceuticals.
2. High-Cost-of-Care: Practices in cardiology and orthopedics are attractive because they are at the forefront of the shift toward value-based care models, including bundled payments and outcomes-based arrangements. However, the report is clear: success here depends on having the cash to invest in data, care integration, and site-of-care optimization.
3. Ancillaries: For dermatology and gastroenterology, the focus is on partnerships in diagnostics and ancillary services that can improve care coordination and strengthen practice economics.
4. Fragmented Markets: Specialties like nephrology, plastic surgery, and behavioral health are considered to be in the “early innings” of platform development, meaning there is still a long runway for growth through consolidation.

The broadening buyer universe: New faces at the table

One of the most surprising trends for 2026 isn't coming from private equity at all—it's coming from the companies that supply your office. The Bain report highlights that distributors have emerged as active acquirers. For example, Cardinal Health’s GI Alliance recently acquired Solaris Health, a urology platform, from Lee Equity Partners, a move that Bain says “underscores the growing strategic interest in physician platforms.”

This follows a string of other big moves, like Cencora’s acquisition of Retina Consultants of America and McKesson’s acquisition of Prism Vision Group. Even payers are getting back into the game; the report points to the Humana and WCAS partnership in CenterWell as a sign that insurers believe “well-aligned provider groups may support efforts to manage medical costs and improve outcomes.”

A philosophical defense of private equity

Despite the numbers, the "vampire" narrative persists. In an article for Medical Economics, Jared Rhoads, MS, MPH, argues that the criticism is often premature, and possibly very misguided. He points out that the “empirical case against PE in health care is far from settled,” and while high-profile failures like Steward Health Care get all the press, they represent a tiny fraction of the total deals in the market.

Rhoads suggests that your view of PE depends on your philosophic lens. If you view health care through an anti-commodification lens, any profit-seeking feels extractive. But Rhoads offers a rights-based perspective, noting that “every leveraged buyout is a voluntary exchange” where the sellers—often physician-owners—are under no obligation to accept the terms offered. In this view, when a PE firm tries to increase the value of a practice, they aren't trying to make it worse; they are trying to improve it so they can eventually sell it for a profit.

However, Rhoads does issue a warning about loopholes. He argues that it is potentially unjust when firms use financial maneuvers like land sale-leasebacks and dividend recapitalizations to “privatize their gains while socializing their losses” through bankruptcy. He suggests that instead of massive new regulations, we should focus on clarifying the legal boundary between acceptable financial engineering and fraudulent transfer.

The $191 billion global context: A record-breaking year

The global health care market is exploding with deals. Bain & Company’s 2025 data shows that global health care private equity hit a record-breaking $191 billion in deal value, blowing past the previous peak set in 2021.

“Health care private equity delivered a record performance last year as large deals spiked and deal count rose across all tiers, with the biopharma and provider segments leading the way, driven by healthcare IT activity” says Murphy. This surge was fueled by a massive comeback in sponsor-to-sponsor deals—basically, one PE firm selling a matured practice platform to an even larger PE firm. In 2025 alone, there were more than 30 of these mega-deals exceeding $1 billion.

The tech revolution: AI and the "Rule of 60"

A huge chunk of that $191 billion is flowing into health care IT, which the Bain report says has outpaced other subsectors within health care since 2017. If you feel like you're being bombarded with new software, this is why. Investors are now holding tech companies to a staggering performance level known as the “Rule of 60,” where the sum of a company’s revenue growth and profit margin exceeds 60%.

For your practice, the most immediate impact of this IT boom is the rise of Generative AI. According to the Bain report, investors are using AI to drive revenue growth or reduce costs, as well as to future-proof the business from downside risk and disruption. Whether it's AI-enabled revenue cycle management or tools to streamline back-end processes, the goal is to reduce the administrative work that leads to physician burnout.

Regulation: The new reality

All these deals are attracting government attention. Bain reports that “regulatory and policy scrutiny of health care consolidation has intensified,” which is forcing investors to place a much greater emphasis on compliance, governance, and demonstrating tangible clinical and operational excellence. If you do decide to partner with a firm, expect them to be much more rigorous about your practice's paper trail and clinical outcomes than they might have been five years ago.

Looking to the rest of 2026: Why the optimism?

As we look toward the rest of 2026, the mood among experts is surprisingly upbeat. Nirad Jain, partner at Bain & Company, says: “We are optimistic about the outlook for health care private equity this year, particularly given investor confidence in market fundamentals remained high in the face of headwinds last spring”. He believes that because there is so much cash waiting to be spent and so many assets reaching the end of their fund lives, the deal-making momentum is only going to grow.

However, Jain also warns that the easy money is gone. “Investors will need conviction in their value-creation playbooks to deliver outsized returns as competition for assets remains intense,” he says.

What all this means for your practice

The takeaway for the independent physician is this: You are still in high demand, but the price of admission for a partnership has changed. The market is moving away from the buy-and-build roll-ups of the past and toward integrated approaches that elevate care quality and are more focused on physicians.

Experts say that if you're considering an exit or a partnership, your value will be judged on your ability to embrace operational excellence, data-driven care, and technological integration. You are in the driver's seat, but the road ahead requires a much more sophisticated map than it used to.