Most consolidation coverage is written for people who have already decided to sell. This isn't that.
If you own a practice — one location or six — you are now operating inside a market where a buyer's offer, a lender's underwriting, and a state regulator's pre-closing review all ask for the same thing: financials clean enough to be believed by someone who doesn't know you. That's true whether you take an offer, decline one, or never get one.
The practices that stay independent on their own terms and the practices that sell well are usually the same practices. They just made different choices with the same set of books.
Here's what changed, and what it means for what's sitting in your accounting system right now.
Consolidation is furthest along where you'd least expect it
The physician numbers are the ones everyone quotes. At least 47% of physicians were employed by or affiliated with hospital systems in 2024, up from under 30% in 2012, per GAO. Private equity ownership of physician practices is comparatively small at roughly 6.5% nationally, though it swings hard by specialty and metro.
Your category probably looks nothing like that number.
- Veterinary is the most consolidated of the practice categories. Roughly 75% of specialty and emergency practices and 25% of primary care practices are corporately owned, together representing about half of nationwide veterinary revenue.
- Dental sits in the middle. The three largest DSOs — Heartland at roughly 2,500 supported offices, Aspen at about 1,100, Pacific Dental near 1,000 — together support around 15% of U.S. dentists.
- Optometry is mid-stage and moving. Roughly 16.5% of practicing optometrists now sit inside private-equity-backed organizations, tracking closely with ophthalmology at about 14.5%. The activity has shifted from building new platforms to bolting practices onto existing ones, which changes what a buyer will pay you and why.
- Aesthetics is the least consolidated and the fastest-moving. Only about 3% of U.S. med spas are owned by private equity or PE-backed organizations. But announced deals went from a handful in 2019 to more than forty in each of the last three years, and the American Med Spa Association's 2026 outlook projects the highest M&A year on record as platforms enter recapitalization cycles.
- Chiropractic is earliest, at roughly 15% to 20% corporate alignment.
Multiples compressed. Structures got harder.
The 2021 comps are gone. Behavioral health now runs 12–18x EBITDA, orthopedics 8–12x, dental DSOs 8–14x post-correction, urgent care 8–12x on multi-site platforms. Medical aesthetics generally spans 6x to 13x adjusted EBITDA depending on scale, membership mix, and MSO structure, with operators carrying recurring memberships and dermatology or plastic surgery affinity reaching the 10x to 12x range. FTC scrutiny and state attorney general actions across 2024 and 2025 measurably slowed platform formation in physician rollups.
Deal structures reflect the correction more than the headline multiples do. Buyers now require 20% to 40% rollover equity, longer earnouts, regulatory escrows, and tighter management incentive plans than 2022 deals did. Cash at close on platform tuck-ins has been running roughly 60% to 80% of total consideration. The buyer mix shifted too — search funders, family offices, and strategic operators have replaced first-wave private equity across several sub-sectors.
The scale premium survived, and it is the widest spread in the market
This is the number to sit with, because it's the one your books actually move.
- Veterinary: solo, owner-dependent practices cap around 3.5x to 6x and sell to SBA-funded individuals. Three-plus DVM practices with $1M+ EBITDA clear 12x to 15x.
- Dental: roughly 5.0x SDE at single-practice level against 12x to 13x adjusted EBITDA at platform level.
- Optometry: single-OD practices sold to individual buyers on SBA 7(a) financing transact in a range of about 2.5x to 4.5x seller's discretionary earnings. Multi-OD groups producing $1M to $3M in adjusted EBITDA run roughly 6x to 8.5x adjusted EBITDA. Platform-scale transactions above $10M adjusted EBITDA have compressed from a 12x-to-15x window in the low-rate years to about 10x to 14x now.
That arbitrage is the entire model: buy small at low multiples, consolidate, exit the platform at the top of the range. You are on one side of that spread or the other, and the thing that determines which is rarely clinical quality. It's whether the practice runs without you, and whether the numbers prove it.
One optometry-specific note, because it gets missed: optical capture rate above roughly 65% supports premium pricing, and optical revenue carries materially better margin than clinical exam revenue after labor and overhead allocation. If your chart of accounts doesn't separate optical from clinical, you cannot show a buyer the thing they're paying up for. More on optometry books →
What owners are actually saying
Two accounts, describing the same transaction 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, and ancillary income from physical therapy and MRI — worth as much as $100,000 per doctor annually — was carved out of compensation. The revenue target that would have reduced fees was benchmarked to an all-time high: the year of the sale.
The other side is real too. KPMG's Cathy Bedrick told Fortune that many veterinarians sell precisely because it lets them go back to practicing medicine. Before consolidation, much of the sector ran antiquated software with no marketing capability, and technicians were leaving over wages that weren't livable.
Michele Forbes, who owns Compassionate Care Animal Hospital, has fielded offers up to $8.5 million and turned down every one — while acknowledging corporate competition has made independence harder. On what changed in 22 years: decisions used to be made in the hospital, in the moment. Now it's a business venture.
The lesson in Towsen's account isn't that private equity is bad. It's that the economics lived in the fine print — fee escalators, ancillary carve-outs, and a performance target set against a peak year. Every one of those is modelable in advance by an owner with clean, normalized financials. She couldn't model it, because the practice's numbers didn't support the exercise.
That is the whole of our argument. Not that you should sell or shouldn't. That you should be able to run the math yourself, before the meeting.
Regulators are now inside the deal
More than fifteen 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 PE 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.
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.
This lands hardest in aesthetics, where corporate practice of medicine restrictions in more than thirty states already dictate ownership structure before a buyer enters the picture. A medspa whose MSO agreement doesn't cleanly separate business from clinical authority isn't facing a diligence discount — it's facing a structural problem that has to be fixed before the process starts.
The demand signal nobody wants to look at
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 and is now struggling to exit as dealmaking dried up alongside visits and revenue.
If you're underwriting an exit on 2021 assumptions in that category, the gap is not small.
What connects all of it
Scale changes how you're evaluated — by buyers, by lenders, and now by state regulators. All three want the same artifact: consolidated, normalized financials that show what's happening location by location, and a documented line between clinical and business decisions.
Most practice accounting isn't built to produce that. It's built to file a return. Those are different jobs, and the second one only becomes visible when someone is sitting across from you with an offer.
The operator takeaway
1. Are your financials consolidated and normalized across every site? In a group sale, inconsistent location-level reporting is what turns a platform story into a bolt-on price.
2. Can you model the deal, not just the headline? Fee escalators, ancillary carve-outs, and earnout benchmarks determine what you actually take home. Rollover equity of 20% to 40% means most of your value is still at risk after close.
3. Can you document clinical independence? If a non-licensed executive is directing clinical decisions in writing anywhere in your organization, that's structural risk now, not a compliance footnote.
Three things this changes in your back office
Location-level P&Ls determine your buyer pool. A group that can't show per-location contribution margin gets priced as a collection of practices, not a platform.
Collections, not billings. Chiropractors collect roughly 65% to 78% of what they bill. Any valuation built on gross billings overstates the business — and the same discipline applies to optometry practices carrying vision plan write-offs and aesthetics practices carrying unredeemed package liability.
Pre-closing review is a documentation exercise. States want financial statements and governance data 90 to 180 days before close. That clock starts well before you have a signed letter of intent.
None of this requires you to want to sell
It requires you to know what you'd be worth if you did — which is the same information you need to run the practice well while you keep it.
That is the work: an owner who knows their normalized earnings, what a buyer would adjust, and what the next move costs — whether or not an offer ever arrives.
Sources
GAO · Commonwealth Fund · PBS NewsHour · Fortune · Frontiers in Veterinary Science · AVMA · Review of Optometric Business · Physician Growth Partners · CT Acquisitions · FOCUS Investment Banking · Scope Research · American Med Spa Association · Skytale Group · Provident Healthcare Partners · Bass, Berry & Sims · Axios Pro · Holt Law · Nixon Peabody · Dynamic Chiropractic
Frequently asked.
Are practice valuation multiples still falling in 2026?
The sharp compression from the 2021 peak has largely worked through, but structures remain tighter than they were. Buyers now typically require 20% to 40% rollover equity, longer earnouts, and regulatory escrows, and cash at close on platform tuck-ins has been running roughly 60% to 80% of total consideration. The headline multiple is no longer the number that determines what a seller takes home.
Why do small practices sell at so much lower multiples than groups?
Because buyers are pricing owner dependency. A solo, owner-dependent veterinary practice caps around 3.5x to 6x while a three-plus DVM practice with $1M or more in EBITDA can clear 12x to 15x. The same spread appears in dental and optometry. Consolidating small practices at low multiples and exiting the platform at a high one is the entire private equity model.
What are state pre-closing notice laws and do they apply to my practice?
More than fifteen states now require advance notice of healthcare transactions, including California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, New York, Oregon, and Washington. California's AB 1415 requires written notice, financial statements, and governance data at least 90 days before closing. Whether they apply depends on your state, transaction size, and buyer type, so it is worth confirming with counsel well before you have a signed letter of intent.
What should a practice owner fix in the books before an offer arrives?
Three things. Consolidate and normalize financials across every location so per-site contribution margin is visible. Report collections rather than gross billings, since chiropractors collect roughly 65% to 78% of what they bill and optometry and aesthetics carry their own write-off and liability distortions. And document a clean line between clinical and business authority, because regulators now look through the management services agreement to see who actually controls clinical decisions.
Do I need to be planning a sale for any of this to matter?
No. Buyers, lenders, and state regulators all want the same artifact: consolidated, normalized, location-level financials. That is also the reporting an owner needs to run the practice well. The practices that stay independent on good terms and the practices that sell well tend to be the same practices making different choices with the same set of books.
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