Hot Physician Specialties for Private Equity Investment

Driven largely by the regulatory environment, reimbursement pressures, extreme fragmentation, and the need for advanced EMR systems and data analytics to succeed in value-based payment and population health programs, physician service organizations across a wide range of specialties have found that the best way to stay competitive in the modern healthcare environment is to gain size and scale.

Private equity has been a key driver of the consolidation occurring within physician services through implementing a “buy and build” or “roll-up” investment strategy where fragmentation exists. This article highlights five sectors that present significant opportunity to the private equity community. Two of these sectors (dermatology and eye care) have been deemed ‘Hot Sectors’ for a while, as they have experienced significant private equity investment throughout the last 12 months and will likely continue to be two of the most active specialties for the foreseeable future. The final three sectors are highlighted as ‘emerging’. These sectors, orthopedics, gastroenterology, and urology, have seen their first private equity investment within the last 12 months and will inevitably become the next ‘hot’ sectors.