Large payers like United Healthcare could buy PE investments in 2nd wave — 4 insights

As the first round of private equity investors prepare to sell, JD Supra examined what the second wave of physician practice management practice buyers could look like.

What you should know:

1. Current PE investors have targeted large practices with existing infrastructure to serve as platform practices. After the initial investment, PE investors often move on to target smaller practices nearby to expand the larger entities' reach.

2. PE investors invested in dermatology, ophthalmology, dental and pain management practices during the first wave.

3. Current investors are targeting orthopedics, urology and gastroenterology. JD Supra identified four reasons why these specialties are attractive to firms: They offer a high degree of market fragmentation, will be in demand as America ages, have lucrative ancillary services like surgery centers and have high reimbursement amount and/or volume forecasts.

4. JD Supra predicts as the first wave of investors begins to exit, major payers — like UnitedHealthcare — will become buyers as they look to vertically align.

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