Becker’s tracked more than 33 physician practice deals in the first quarter of 2026 — including 15 in January alone, spanning radiology rollups, cardiology acquisitions, retinal specialists and primary care platforms absorbed by health systems, insurers and ambulatory chains.
Only 18% of U.S. physicians still practice in physician-owned settings, down from 60% in 2012. This decline has led to a high concentration of independent practice in specific specialties and ownership structures as well as a new playbook for what M&A looks like on both the practice and acquirer side of deals.
Here are five forces that will determine where dealmaking goes from here.
1. The remaining independents are concentrated in high-acuity specialties — and competition for them is intensifying
The practices that haven’t sold yet are not a random sample of the market. They are disproportionately in specialties with strong commercial reimbursement and outpatient procedure volume, including ophthalmology, orthopedics, cardiology, gastroenterology and interventional pain.
The first quarter illustrated the dynamic. Ascend Vision Partners entered Oklahoma with three ophthalmology practices. Surgery Partners acquired Preferred Vascular Group, an eight-ASC dialysis access platform in a $6 billion market. For remaining independent practices, scarcity is working in their favor — multiples on high-acuity specialty platforms remain elevated. The question is how long that window stays open as site-neutral payment reform advances.
2. Pharmaceutical distributors entering the market the market
Hospital systems and private equity firms led the last several years of physician consolidation. In 2026, the market has more stakeholders — insurers, ambulatory chains, academic health systems and, increasingly, pharmaceutical distributors.
Dublin, Ohio-based Cardinal Health has made three billion-dollar physician group acquisitions in two years, culminating in The Specialty Alliance — a multispecialty MSO platform supporting approximately 2,200 providers across 28 states. Cencora followed, acquiring Retina Consultants of America. What distributors are building is a vertically integrated specialty pipeline with ownership of the practice, supply chain and outcomes data. For independent groups, a wider acquirer field means more competition for their practices and more variability in what post-acquisition life looks like.
3. Faculty practice plans are the market’s next major distressed seller
Two high-profile academic medicine deals in 2026 point to a structural pattern. George Washington University’s Medical Faculty Associates accumulated more than $444 million in debt, prompting a restructuring deal with King of Prussia, Pa.-based Universal Health Services that would move its 750 physicians into a UHS subsidiary. The University of Minnesota and Minneapolis-based Fairview Health Services narrowly avoided a split that would have disrupted care for 1.2 million patients.
Faculty practice plans face the same reimbursement compression and overhead pressures as smaller independent groups — but at a scale that makes failure consequential. As standalone financial entities, many are no longer viable, and the deals to restructure or absorb them will be among the largest physician group transactions of the next several years.
4. Site-neutral payment reform unsettles the hospital acquisition calculus
Hospitals currently receive approximately 60% higher Medicare payments for similar services because of facility-fee structures — a gap that has long been a primary financial incentive for physician practice acquisition. The 2026 Hospital Outpatient Prospective Payment System rule advanced site-neutral reform by narrowing that gap, with further changes expected.
The downstream effect on M&A is contested. Site-neutral reform could dampen hospital acquisition activity by removing the billing advantage that justified the premium. Or, as orthopedic surgeon Brian Curtin, MD, has argued, it could strengthen physician-owned practices by eliminating the financial disadvantage of performing cases outside the hospital — making those practices harder to acquire, or more attractive as standalone PE platforms. Either way, health system leaders should be stress-testing deal structures against a scenario in which the facility-fee differential disappears.
5. Organic growth and physician retention are replacing deal count as the primary M&A metric
A January 2026 Bain & Company report identified a shift in what physician group investors now must demonstrate: scale through M&A alone is no longer sufficient. Investors expect a track record of organic growth, repeatable ancillary revenue and positioning as an employer of choice.
Post-acquisition physician turnover data helps explain why. Research published in Health Affairs found that physician departures from PE-acquired ophthalmology practices increased by 265% relative to non-acquired practices after a deal. With more states poised to loosen noncompete restrictions for physicians, the workforce may see increased flexibility around their ability to switch employers. The groups commanding the strongest valuations going forward will not simply be the largest — they will be the ones that can demonstrate committed physicians, growing ancillary revenue and a care model that holds together after the deal closes.
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