Physician groups remain a popular target of investment within healthcare as their “value-creation playbook” continues to adapt with new technology and industry demands, Bain & Company reported Jan. 8.
While physician group transactions have declined as a share of all global provider transactions, according to data from Bain, they remain a major part of many private equity portfolios.
Here are five ways that the physician group market has shifted in recent years and how investors and practice owners are responding, according to Bain:
1. While traditional PE investments in US physician groups have focused on mergers and acquisitions to build scale, investment plans must now demonstrate improved value for patients, clinicians and payers as well as investors.
2. A track record of organic growth, execution of repeatable ancillary playbooks and position the physician group as an “employer of choice” have become key priorities for physician group investments in 2026.
3. The range of acquirers involved in physician group deals have also expanded in recent years to include payers, diversified providers, distributors and others. The report highlights several recent physician group acquisitions, including:
- Pharmaceutical distributor Cardinal Health’s GI Alliance acquired Solaris Health, a urology platform, from Lee Equity Partners.
- Cencora acquired Retina Consultants of America from Webster Equity Partners.
- McKesson acquired ophthalmology and retina services provider Prism Vision Group from Quad-C Management.
4. As staffing shortages and reimbursement challenges continue to create turbulence in the market, physician groups must “evolve from loose confederations into coordinated platforms that provide clinicians with the tools and support to deliver high quality care,” reads the report, emphasizing the importance of scalability and integration in the sustained growth of physician groups.
5. Some of the ways that practices are meeting this demand include: focusing on clinician value propositions; leveraging technology to drive patient engagement; exploring alternative payment models; selecting strategic areas for expanded operations and deploying AI whenever possible for operational efficiency.
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