Capital Is Consolidating Care. The Terms Have Changed.

The consolidation story in healthcare is no longer new. Three things are new in 2026. The terms have moved against sellers. More than a dozen states now sit in the closing process. Several categories that looked like sure things three years ago are working through a correction. For a multi-site operator, the question is whether your financials hold up in a market where the buyer has the upper hand again.

Consolidation is furthest along where you'd least expect it

Private equity is now the buyer in more than 90% of physician practice transactions, but it employs only about 6.5% of physicians nationally. The buying has a long way left to run. At least 47% of physicians were employed by or affiliated with hospital systems in 2024, up from less than 30% in 2012, per GAO.

Veterinary is more consolidated by revenue than by location. Corporate and PE-backed groups own about 75% of specialty and emergency practices and about 25% of primary care. Those add up to roughly half of all veterinary revenue. Independents still hold about 51% of the clinic sites. Dental sits in between. The three largest DSOs support around 15% of U.S. dentists: Heartland with about 2,500 offices, Aspen with about 1,100 and Pacific Dental with about 1,000. Below them is a deep mid-market of platforms such as MB2, Smile Brands and Mortenson.

Chiropractic is earliest, at roughly 15% to 20% corporate alignment.

Multiples compressed. Structures got harder.

The 2021 comps are gone. Behavioral health now runs 12 to 18x EBITDA, orthopedics 8 to 12x, dental DSOs 8 to 14x post-correction, and urgent care 8 to 12x on multi-site platforms. Anesthesia platforms that traded at 12 to 16 times in 2021 now clear 7 to 11. FTC attention and state attorney general actions through 2024 and 2025 slowed physician rollups.

Deal structures reflect it. Buyers now require 20% to 40% rollover equity, longer earnouts, regulatory escrows, and tighter management incentive plans than 2022 deals did. The buyers have changed too. Search funders, family offices and strategic operators have replaced first-wave private equity in several sub-sectors.

The premium for scale survived the correction, and it is the widest spread in the market. Solo, owner-dependent veterinary practices cap at 3.5x to 6x and sell to SBA-funded individuals, while quality vet platforms clear 12x to 18x. Dental runs about 5.0x SDE at single-practice level against 12x to 13x adjusted EBITDA at platform level. That spread is the model: buy small practices at low multiples, put them together, and sell the platform at 12 to 14 times or more.

Money is moving into behavioral health, fertility and IVF, dermatology, musculoskeletal and orthopedics, and pediatrics. Pediatrics is the fastest mover: private equity investment in pediatric outpatient care tripled in 2025.

What operators are actually saying

Two accounts, describing the same kind of deal from opposite ends.

Adrienne Towsen, MD, an orthopedic surgeon in West Chester, PA, sold her 75-physician practice to a PE-backed management company in 2022. Promised back-office improvements never materialized and the accounting grew more opaque. Physicians were told to start paying for their own cell plans and life and disability insurance. Management fees rose. Income from physical therapy and MRI, worth as much as $100,000 per doctor a year, was carved out of physician pay. The revenue target that would have reduced those fees was set at the practice’s best year ever, which was the year of the sale.

The other side is real too. KPMG's Cathy Bedrick told Fortune that many vets sell because it lets them return to practicing medicine. Before consolidation, most practices ran old software and had no marketing. Technicians were leaving over wages they could not live on. One vet described losing excellent nurses for exactly that reason.

Michele Forbes, who owns Compassionate Care Animal Hospital, has turned down offers as high as $8.5 million. She also says corporate competition has made it harder to compete. On what changed in 22 years, she says decisions used to be made in the hospital, in the moment. Now it is a business venture.

The lesson in Towsen’s account is not that private equity is bad. The economics lived in the fine print: fee escalators, ancillary carve-outs and a performance target set against a peak year. A seller with clean, normalized financials can model all three before signing. She could not, because the practice’s numbers would not support it.

Regulators are now in the deal

Over 15 states have pre-closing healthcare transaction notice requirements, including California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, New York, Oregon, and Washington. California’s AB 1415 requires private equity groups, hedge funds and MSOs to file written notice, financial statements and governance data at least 90 days before closing. SB 351 explicitly bars non-physician investors from influencing clinical decisions. Both California and Oregon passed investor-influence limits in 2025, and similar measures are under consideration in other states.

Enforcement has moved past paperwork. Regulators look through the management services agreement to see who actually controls clinical hiring, scheduling, and diagnostic protocols. One 2026 audit reportedly requested Slack channels, email archives, and payroll authorization logs.

The demand number worth checking

Veterinary invoice volume has declined at least 2% per year for four consecutive years. The AVMA's Chief Economist declared the profession in a recessionary period beginning November 2024, with possible recovery in Q2 2026. Private equity bought nearly a tenth of all U.S. veterinary clinics during the pandemic. It is now struggling to sell them, because visits, revenue and deal activity have all fallen together.

An exit underwritten on 2021 assumptions in this category will miss by a wide margin.

Scale changes how you are judged, by buyers, by lenders and now by state regulators. All three want the same two things. They want consolidated, normalized financials that show what is happening site by site. They want a documented line between clinical decisions and business decisions.

The Operator Takeaway

1. Are your financials consolidated and normalized across every site?

In a group sale, inconsistent site-level reporting turns a platform price into a bolt-on price.

2. Can you model the deal, not just the headline?

Fee escalators, ancillary carve-outs and earnout benchmarks decide what you take home. With 20% to 40% rollover equity, much of your value is still at risk after the close.

3. Can you document clinical independence?

If an unlicensed executive is directing clinical decisions in writing anywhere in the organization, that is a structural risk now rather than a compliance footnote.

Three themes for your back office

• Site-level P&Ls decide who will bid. A group that cannot show contribution margin for each location gets priced as a collection of practices rather than as a platform.
• Value the collections, not the billings. Chiropractors collect roughly 65% to 78% of what they bill, so a valuation built on gross billings overstates the business.
• Pre-closing review is a documentation exercise. States want financial statements and governance data 90 to 180 days before the close, so that clock starts well before you have a signed letter of intent.

Templates and benchmarks for all three are in our Practice Finance Resource Center: averanadvisors.com/resources/

Sources

GAO · Commonwealth Fund · PBS NewsHour · Fortune (via AOL) · FOCUS Investment Banking · CT Acquisitions (Healthcare M&A) · CT Acquisitions (Veterinary) · CT Acquisitions (Dental DSO Tracker) · Bass, Berry & Sims · Axios Pro · Nixon Peabody

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Financial Infrastructure for Multi-Site Practice Groups

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Byline: Scott Engler, Averan Advisors

Note: the corporate-practice-of-medicine and state pre-closing details are legally specific, have a healthcare attorney review before publication.