In recent years, private equity investors have increasingly been drawn to Primary Care and Multi-Specialty practices. This trend has been driven by a recognition among these firms that there is significant potential to create value by consolidating referrals and ancillary services, as well as by keeping patients within a single network that spans multiple specialties. The ongoing shift towards value-based care, along with the increasing demand for integrated and coordinated healthcare delivery, has further amplified the appeal of investing in practices that are well-positioned to thrive under these new service models.
Private equity firms are particularly interested in groups that have a substantial patient population under their control, as these practices are currently receiving historically high valuations and attention. This is true regardless of whether the practice operates under a fee-for-service or risk-based model. Private equity is drawn to the opportunity to maintain self-governance while enjoying economies of scale that provide stronger bargaining power with both payors and suppliers.
Despite recent market challenges, we continue to see high levels of deal activity and valuations in the Primary Care and Multi-Specialty sector. We anticipate that this trend will persist for the foreseeable future, especially as investor interest moves beyond the East Coast into the rest of the US.
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