Physician practice valuations have come down from their COVID-19 pandemic-era peak, but the market is still active and PE remains the dominant buyer.
Here is what the current data shows.
1. The headline multiple has compressed, but remains historically high
Median healthcare services EBITDA multiples declined to approximately 11.5x in 2025, down from 14.5x in 2024, reflecting higher borrowing costs and increased buyer selectivity, according to Focus Investment Banking. Pre-pandemic physician practice multiples typically ran 6x to 8x EBITDA. Even at 11.5x, the market remains well above historical norms. Private equity remains the dominant buyer, representing more than 90% of transactions.
2. Specialty is the biggest driver of value
Cardiology, gastroenterology and orthopedics are seeing the fiercest buyer competition, with ophthalmology close behind. Based on numbers from Focus Investment Banking, cardiology and ophthalmology are at 12x to 15x EBITDA; gastroenterology at 10x to 14x; orthopedics at 9x to 13x; dermatology at 8x to 11x following multiple compression after several consolidation waves; and primary care at 3x to 5x, with higher multiples possible for practices with strong Medicare Advantage or ACO performance.
3. Platform vs. add-on
Platform investments command 3 to 5 multiple turns higher than add-on acquisitions of smaller groups, according to the FOCUS report. A GI group with $2 million in EBITDA selling as an add-on to an existing PE platform will price in the mid-single digits. The same group as a platform entry in an underconsolidated market could command 10x or more.
4. ASC ownership and ancillary revenue move the number
Owned ASCs, imaging and pathology commonly add 1 to 3 turns to EBITDA multiples. Practices with strong payer diversification and ancillary revenue achieve multiples up to 2x higher than comparable practices without those revenue streams, according to Focus.
5. Deal activity is holding, but buyers are more selectiveThe first quarter of 2025 saw 79 physician practice deals, with particular focus on cardiology, dermatology, orthopedics and behavioral health, according to Bass, Berry and Sims. Overall deal volume held steady throughout 2025 at generally mid-260s to low 300s per quarter, according to PwC, even as pricing moved around. Deal value dropped from $19 billion in the fourth quarter of 2024 to $7 billion in the third quarter of 2025 before climbing back to $22 billion in the fourth quarter.
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