5 forces shaping physician practice dealmaking in the rest of 2026

Becker’s tracked more than 33 physician practice deals in the first quarter of 2026, including 15 in January alone. The activity ranged from radiology rollups and cardiology acquisitions to retinal specialists and primary care platforms absorbed by health systems, insurers and ambulatory chains.

That pace reflects a market that has changed sharply over the past decade. Only 18% of U.S. physicians still practice in physician-owned settings, down from 60% in 2012. As independent practice has shrunk, the remaining groups have become more concentrated in certain specialties and ownership structures. That shift is also changing how mergers and acquisitions work for both sellers and buyers.

Five forces are likely to determine where physician dealmaking goes next.

First, the practices that remain independent are clustered in high-acuity specialties, and competition for them is rising. The groups that have not yet sold are not evenly spread across the market. They are more likely to be in specialties with strong commercial reimbursement and outpatient procedure volume, including ophthalmology, orthopedics, cardiology, gastroenterology and interventional pain.

The first quarter showed that pattern in action. Ascend Vision Partners entered Oklahoma with three ophthalmology practices, while Surgery Partners acquired Preferred Vascular Group, an eight-ASC dialysis access platform in a $6 billion market. For independent practices in these specialties, scarcity has helped support elevated multiples. The open question is how long that window stays available as site-neutral payment reform advances.

Second, pharmaceutical distributors are becoming a more visible part of the buyer landscape. Hospital systems and private equity firms led much of the physician consolidation in recent years. In 2026, the field includes more stakeholders, among them insurers, ambulatory chains, academic health systems and, increasingly, pharmaceutical distributors.

Cardinal Health, based in Dublin, Ohio, has made three billion-dollar physician group acquisitions in two years. Those deals culminated in The Specialty Alliance, a multispecialty MSO platform supporting approximately 2,200 providers across 28 states. Cencora followed with its acquisition of Retina Consultants of America.

These distributors are building vertically integrated specialty pipelines that combine ownership of the practice, the supply chain and outcomes data. For independent groups, that means more competition for their practices and more variation in what happens after a transaction closes.

Third, faculty practice plans may be the next major distressed sellers in the market. Two academic medicine transactions in 2026 point to a deeper structural issue. George Washington University’s Medical Faculty Associates accumulated more than $444 million in debt, leading to a restructuring deal with King of Prussia, Pa.-based Universal Health Services that would move its 750 physicians into a UHS subsidiary. Separately, 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 pressure as smaller independent groups, but they do so at a scale that makes failure especially consequential. As standalone financial entities, many are no longer viable. The restructurings and absorption deals tied to these organizations are likely to be among the largest physician group transactions in the next several years.

Fourth, site-neutral payment reform is making hospital acquisition economics less predictable. Hospitals currently receive approximately 60% higher Medicare payments for similar services because of facility-fee structures. That gap has long served as a major financial incentive for acquiring physician practices.

The 2026 Hospital Outpatient Prospective Payment System rule advanced site-neutral reform by narrowing that gap, and more changes are expected. The impact on deal activity is still disputed. One view is that the reform could slow hospital acquisitions by removing the billing advantage that helped justify premium prices. Another view, reflected in comments from orthopedic surgeon Brian Curtin, MD, is that it could strengthen physician-owned practices by reducing the financial disadvantage of performing cases outside the hospital. In that scenario, those practices could become harder to acquire or more appealing as standalone private equity platforms.

Either way, health system leaders are being pushed to stress-test deal structures against a future in which the facility-fee differential disappears.

Fifth, organic growth and physician retention are replacing simple deal count as the main measure of M&A value. A January 2026 Bain & Company report said scale through acquisitions alone is no longer enough for physician group investors. They now are expected to show a record of organic growth, repeatable ancillary revenue and a position as an employer of choice.

Post-acquisition turnover data helps explain why that standard is changing. Research published in Health Affairs found that physician departures from private equity-acquired ophthalmology practices increased by 265% relative to non-acquired practices after a deal. At the same time, more states appear poised to loosen noncompete restrictions for physicians, which could give the workforce more flexibility to change employers.

That means the groups likely to command the strongest valuations going forward will not simply be the largest. They will be the ones that can show committed physicians, rising ancillary revenue and a care model that remains intact after the transaction closes.

Taken together, these five forces suggest that the next phase of physician practice consolidation will be shaped less by deal volume alone and more by specialty concentration, new buyer types, academic distress, reimbursement reform and the ability to hold practices together after ownership changes.