A Year in Review: Physician Practice Trends, Drivers of M&A, and 2019 Deals

2019 was a busy year in Physician Practice consolidation. According to the “Global Healthcare Private Equity and Corporate M&A 2019” report published by Bain & Company, Provider deals accounted for the greatest volume and deal value, accounting for ~37% of the global healthcare total. Here, we explore the trends and drivers of M&A.

Physician Practice Trends

Physician Consolidation

Research has shown across all physician demographics a propensity for physicians to join larger group practices.  Several factors contribute to this trend including: work-life balance, income guarantees, shared support services, central business functions, decreased call burden, access to  standardized clinical protocols and more sophisticated technology to support practice growth and sustainability.

Regulatory Uncertainty

With uncertainty around the future of the Affordable Care Act (ACA) and a rapidly changing reimbursement landscape, physicians are seeking the stability of larger organizations.  Scale allows physicians an ability to focus on clinical outcomes while leveraging a larger organization for shared support services like mid-level providers, centralized business functions, and standardized clinical protocols to deliver high quality, lower cost care.

Alternative Payment Models

Value Based Payments: Reimbursement models that include a new paradigm in risk sharing and value based payment methodologies are on the rise as we see payors and providers develop new cost saving relationships.

Direct to employer contracting is on the rise as “centers of excellence” offer a unique value proposition to large employers.  Large employers like Walmart have begun to directly contract with providers in an effort to bypass payors and curtail rising healthcare costs.

Narrow Networks – Payors and employers are more commonly seeking “best in class” specialty groups to direct patients and deliver high quality, lower cost solutions for patients.


Consumers of healthcare have far more access to information than ever before.  Consumers have the ability to read provider reviews, research pricing for services, and share in clinical decision making. New entrants like Amazon, CVS Health and Walmart are improving patient access to healthcare and increasing competition.  With rising deductibles, consumers are more conscious of costs for services including procedures, site of service and diagnostic imaging.

Drivers of M&A


Private Equity Groups (PEG) and Strategic partners offer physician partners an opportunity to monetize a portion of equity at attractive multiples.  The new partner has access to capital, sophistication in business operations and scaling expertise needed by today’s independent practice.


In order to deliver on alternative payment models, quality reporting, direct to employer contracting and other initiatives, practices require an infrastructure to demonstrate value managing larger populations of patients.  Physicians are often too busy practicing medicine to dedicate the necessary time, resources and capital to be successful in scaling.

Central Business Functions

PEG and Strategic acquirers can make an immediate impact through economies of scale to drive improvements in revenue cycle and back office efficiency, financial controls and sophisticated analytics.

Ancillary Opportunities

Ancillaries can bolster the bottom line of a practice and improve the patient experience while directly controlling quality and cost.  An acquirer can assist in the development and growth of ancillary service opportunities.

Second Bite” Transactions

Most transactions include physician owners rolling a portion of transaction proceeds into equity.  Physician owners can often see more value in the “second bite” transaction then the initial transaction as the company obtains scale.

For more information, reach us at info@bloomllc.com or call us directly at 305-974-0700.


Bloom has been advising physicians on transactions since 1990. Founded by Mr. Henry Bloom, the Company is based in Aventura, FL and serves clients nationwide. Bloom’s investment banking expertise is in the healthcare services sector.


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