Private equity paid a record $191 billion for U.S. healthcare deals in 2025, more than the sector’s previous peak in 2021. Cencora alone has spent more than $10 billion on physician-platform acquisitions since January 2025, including a $1.1 billion deal for EyeSouth Partners’ retina business and a $5 billion deal for a majority stake in OneOncology. Cardinal Health has followed a similar path, paying $2.8 billion for a majority stake in GI Alliance, a gastroenterology platform, in late 2024.
At the same time, physician practices are closing. At least 30 practices and ambulatory surgery centers shut down or announced closure in the first half of 2026 alone, across more than 20 states, according to Becker’s tracking.
The pattern suggests private equity money isn’t leaving physician practices. It’s concentrating in fewer, larger, later-stage deals, while smaller, debt-loaded practices are the ones closing.
The money is going to scale
The billion-dollar deals in 2025 and 2026 have gone almost entirely to mature, multistate specialty platforms — retina, oncology, urology, gastroenterology and dermatology — where a buyer gains negotiating leverage with payers, added ancillary revenue such as imaging, infusion, pathology and surgery centers, and an existing management structure. VMG Health’s 2025 healthcare M&A report found private equity involved in 58.4% of all physician medical group deals tracked, with platforms adding smaller “bolt-on” practices rather than backers starting new ones from scratch.
Private equity’s approach has shifted over the past five years. Physician practice management deal volume overall is on pace to fall by roughly half in 2026 versus 2025 — from a 2021 peak of 851 deals a year to just 105 in the first half of this year. Part of that is regulation: at least 26 states introduced 79 bills in 2026 addressing private equity’s role in healthcare, and seven states passed restrictions in 2025 alone, up from just one in 2024. Oregon now requires physicians to hold at least 51% ownership of a practice.
The smaller, debt-loaded end of the market is closing
The practices closing in 2026 are disproportionately ones facing declining reimbursement and rising labor and operating costs at the same time. MercyOne South Des Moines cited that combination when it closed. So did rural hospitals like Fitzgibbon and Mizell Memorial. MaineGeneral’s eye center said it was losing up to $1 million a year before it shut down. Smaller, independent, often rural or single-specialty groups have less capacity to absorb a bad payer contract or a departing physician than a platform backed by institutional capital.
Scale hasn’t guaranteed stability, either. Several of the largest platforms built through debt-financed acquisitions have also ended up in bankruptcy. Steward Health Care, taken private by Cerberus Capital Management, filed for bankruptcy on May 6, 2024, with more than $9 billion in liabilities. Cerberus made roughly $800 million during its decade of ownership, including at least $484 million from a 2016 dividend tied to a sale-leaseback of Steward’s hospital real estate, before completing its exit from the company in January 2021. Prospect Medical Holdings, majority-owned by Leonard Green & Partners from 2010 to 2021, filed for Chapter 11 in January 2025. A Georgetown University report found Leonard Green collected $658 million in dividends and fees during its ownership, including a $457 million payout to the firm and two top executives funded by a $1.2 billion loan. A Senate oversight committee separately found what it called “overwhelming evidence of financial mismanagement” at both companies, citing sale-leaseback deals that required the hospitals to pay rent on their own real estate.
Physician staffing groups show a similar pattern. Envision Physician Services, facing falling patient volumes, No Surprises Act reimbursement disputes and rising costs, filed for bankruptcy in May 2023. American Physician Partners filed for Chapter 11 in 2023, transitioning its hospital contracts to other staffing companies and in-house teams. Both were private equity-backed.
Ownership is shifting, and the money is pickier
Private practice ownership of physicians fell to 42.2% in 2024, down from 60.1% in 2012, according to American Medical Association data. Corporate entities — meaning insurers and private equity firms rather than hospitals — now employ 23% of physicians, up from 15% in 2019. Roughly 6.5% of physicians worked in a private equity-owned practice in 2024, up from 4.5% in 2022. That consolidation isn’t reversing, but private equity investment has shifted toward platforms with pricing power and ancillary revenue rather than standalone practices dependent on a single payer mix or physician’s retirement.
Distressed assets are still finding buyers, at a lower price and from a different type of buyer. White Wilson Medical Center, a 79-year-old independent physician group in Fort Walton Beach, Florida, emerged from Chapter 11 bankruptcy in 2026 with new backing from private equity firm Kain Capital, which is using it as a platform to expand into other Florida markets.
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