Corporate ownership of medical practices is threatening patient care, clinical independence and physician well-being, according to the American College of Physicians (ACP).
It’s time for federal and state policymakers to strengthen oversight and rein in private equity investment in health care, ACP said in “
“Given the increasing role that private equity plays in the health care system, we need to know more about its impact,” ACP president Jan K. Carney, M.D., M.P.H, MACP, said in an accompanying
A growing presence in primary care
Private equity deal values in health care grew from $41.5 billion in 2010 to $119.9 billion in 2019, a trend the ACP said is expected to continue as health care spending is projected to grow at an average of 5.5% per year. Investment has increasingly focused on
Between 2012 and 2021, private equity acquisitions of physician practices increased more than sixfold, according to data cited in the paper. Dermatology saw the most cumulative acquisitions during that period — 376 — followed by ophthalmology with 276, gastroenterology with 120 and primary care with 118. In 28% of metropolitan statistical areas, a single private equity firm holds a market share of more than 30% of physician practices in a given specialty. The single firm’s share exceeds 50% in 13% of those markets.
The ACP attributed the shift largely to financial pressures on independent practices. Medicare payment rates have not kept pace with physician practice expenses, and high administrative burdens, workforce shortages and declining reimbursement have made independent practice increasingly difficult. As a result, nearly four in five physicians — 77.6% — are now employed by hospitals, health systems or other corporate entities, according to an Avalere report commissioned by the Physicians Advocacy Institute cited in the paper.
Evidence of harm — and some benefit
The ACP said the evidence on private equity’s effects is mixed but concerning. A systematic review cited in the paper found private equity ownership was associated with cost increases of up to 32% without consistent quality improvements. “Even in primary care settings aimed at lowering costs, patients were often steered toward more expensive services after private equity–owned systems took over, leading to increased specialist visits, emergency department visits, and hospitalizations,” the position paper said.
Studies of private equity-acquired hospitals found no improvement in 30-day mortality, while rates of hospital-acquired conditions and adverse events increased. Research also found that private equity ownership was associated with reduced staffing, with a significant yearly increase in the use of advanced practitioners — such as nurse practitioners and physician assistants — replacing physician-led care following ownership changes.
A 2024 study cited by the ACP found most physician respondents viewed private equity involvement in health care negatively. Physicians employed by private equity firms were less likely to report high levels of professional satisfaction and autonomy. A 2022 survey of 1,000 physicians found nearly 60% said reduced autonomy was one of the primary negative effects of corporate ownership, while two-thirds reported little or no involvement in practice management decisions.
The ACP acknowledged that private equity investment can, in limited circumstances, provide benefits — including access to capital for technology upgrades, economies of scale and expanded access in underserved communities. The paper cited Aledade and Oak Street Health as examples of companies that received private equity funding to support preventive and chronic disease care. The ACP said further research is needed to understand when and how private equity can play a constructive role in health care reform.
Regulatory gaps and loopholes
A central concern raised in the paper is the lack of federal and state oversight of private equity transactions. Under the federal Hart-Scott-Rodino Antitrust Improvements Act, only mergers exceeding a transaction threshold of $111.4 million trigger mandatory federal review, but that threshold is met by only a minority of private equity acquisitions. Private equity firms frequently use “roll-up” strategies, consolidating markets through multiple smaller deals that individually fall below reporting thresholds, allowing them to build significant market power without regulatory scrutiny.
Corporate practice of medicine doctrines vary widely by state and are designed to prevent nonphysicians from owning or controlling medical practices. But the ACP said enforcement has been limited, and private equity firms have found workarounds, such as naming physicians as nominal practice owners while parent companies control the finances. Nearly half of all states have no rule prohibiting medical management companies from influencing clinical practice and medical judgment, the paper found.
The paper also raised concerns about enforcement of the False Claims Act, a federal law that imposes penalties of up to three times the amount of fraud. From 2014 to 2021, approximately 6,982 private equity acquisitions in health care were completed, yet only 34 cases advanced to settlement under the act, resulting in $500 million in settlement fees — less than 0.1% of total private equity investment in health care during that period. Since 2013, at least 25 health care companies under private equity ownership have paid settlements totaling more than $570 million for allegedly violating the act.
Resource constraints hamper enforcement
The ACP also flagged a widening gap between the scale of private equity activity and the resources available to regulators. While total private equity acquisitions in health care increased 167% between 2010 and 2020, the number of full-time positions at the Federal Trade Commission decreased by 17% during that period. After adjusting for inflation, the FTC received only a $40 million budget increase since 2010 despite processing more than double the number of transactions.
“Developing evidence-based policies to address growing private equity investment and consolidation in health care is challenging due to data constraints, limits on government intervention in markets, and political barriers to regulation,” the paper states. The ACP said that evolving market dynamics, increased transaction scale and stronger empirical evidence on ownership effects now provide clearer targets for enforcement and policy reform.
The position paper was developed by the ACP Medical Practice and Quality Committee with input from the ACP Coding and Payment Policy Subcommittee. The authors were Dejaih Johnson, J.D., M.P.A.; Scott Manaker, M.D., Ph.D.; Leslie F. Algase, M.D.; and Clyde Watkins, Jr., M.D. It was approved by the ACP Board of Regents on June 16, 2025.