Primary Care Physician Practice Valuation Multiples and M&A Trends 2025
- Will Hamilton
- Jul 29
- 5 min read
Updated: Aug 6
The primary care industry serves as the cornerstone of the healthcare system, providing essential, first-contact medical services to individuals and families across a wide range of demographics. Primary care physicians (PCPs), including family practitioners, internists, pediatricians, and geriatricians, focus on preventive care, chronic disease management, and acute illness treatment. The industry is increasingly shifting toward value-based care models, driven by healthcare reform initiatives and payer pressures, which emphasize improved patient outcomes and cost efficiency. This has led to the growth of accountable care organizations (ACOs), patient-centered medical homes (PCMHs), and the integration of advanced technologies like telehealth and electronic health records (EHRs). Despite these advancements, the industry faces challenges such as physician shortages, rising operational costs, and reimbursement pressures, particularly in rural and underserved areas. The demand for primary care services continues to grow, fueled by an aging population, the prevalence of chronic conditions, and expanded insurance coverage under the Affordable Care Act (ACA).
Key Growth Drivers
Key growth drivers for the industry include the following:
Aging Population and Chronic Disease Prevalence: The increasing aging population and the rising prevalence of chronic diseases (e.g., diabetes, hypertension, and cardiovascular conditions) are driving demand for primary care services. Older adults require more frequent and comprehensive care, boosting the market.
Shift Toward Value-Based Care: The transition from fee-for-service to value-based care models emphasizes preventive care, patient outcomes, and cost efficiency. This shift incentivizes primary care providers to focus on holistic, long-term patient management, which can result in additional income opportunities in the form of shared savings and other incentives.
Technological Advancements: The adoption of digital health technologies, such as telemedicine, electronic health records (EHRs), and wearable devices, is intended to enhance the efficiency and accessibility of primary care. These tools enable remote monitoring, early diagnosis, and personalized care.
Increased Focus on Preventive Care: Growing awareness of the importance of preventive care to reduce healthcare costs and improve population health is driving demand for primary care services. Preventive measures include routine check-ups, vaccinations, and lifestyle counseling.
Expansion of Healthcare Access: Government initiatives, such as the Affordable Care Act (ACA) in the U.S., and global efforts to improve healthcare access are increasing the number of insured individuals, thereby expanding the patient base for primary care providers.
Workforce Development and Team-Based Care Models: The integration of nurse practitioners, physician assistants, and other healthcare professionals into team-based care models is addressing primary care provider shortages and improving service delivery. This collaborative approach enhances patient access and care quality.
Primary Care M&A Trends
From a mergers and acquisitions (M&A) perspective, the primary care sector is highly attractive due to its critical role in the healthcare ecosystem and its potential for consolidation. Private equity firms, health systems, and payer-owned entities are actively acquiring independent practices and primary care networks to achieve scale, enhance care coordination, and capture a larger share of value-based contracts. Vertical integration strategies are also prominent, with payers and health systems acquiring primary care practices to control costs, coordinate care, improve patient outcomes, and streamline care delivery. Additionally, the rise of retail health clinics and technology-driven primary care models has introduced new players into the market, further driving competition and innovation. As the industry evolves, M&A activity is expected to remain robust, with a focus on strategic partnerships that align with the shift toward population health management and value-based reimbursement models.
The number of announced primary care M&A deals has increased steadily since the 2021 / 2022 boom / bust cycle. However, only a small percentage of primary care deals are announced publicly as hospital and health system purchases, payer-owned entity acquisitions, and physician-to-physician deals, which represent the majority of the market, tend not to be announced publicly.
Unlike total M&A volume, new private equity -owned platform creation has actually declined over the past three years, from 12 new platform deals in 2022 to six in 2024.
Primary Care EBITDA Multiples
Small Practices (typically revenue under $5M):
These practices usually sell for lower multiples, ranging from 3x to 6x EBITDA. The lower multiple is often due to higher operational risk, lower revenue diversification, and limited geographic reach, as well as a heavy reliance on the owner / operator, which can lead to employer contract retention and business continuity concerns.
Mid-Sized Groups (revenue $5-50M):
Larger, more established companies with proven profitability, a broader patient base, and possibly a unique niche, may command higher multiples. These can range from 5x to 10x EBITDA, depending on size, local market conditions, service mix, growth rate, and the stability of the cash flow.
Large Platforms, Value-Based Care Focused, and Tech-Driven Providers:
Larger practices with scalable virtual care platforms, the demonstrated ability to outperform in value-based care contracts, or to grow quickly organically or through M&A with strong, continuing management teams can command multiples in the 10x to 20x EBITDAÂ range.
Cash Flow Multiples for Small Primary Care Practices
There are a large number of one-to-four provider primary care clinics listed for sale currently, most of which are seeking a physician-to-physician type of deal. It's difficult to glean much useful information from clinics so small where the level of owner involvement is unclear. A clinic making $400k per year in cash flow for an absentee owner is much different from a clinic making $400k per year in take-home for a full-time physician-owner.
Factors Impacting the EBITDA Multiple for Primary Care Providers
Acquisition multiples are a function of perceived risk and growth. Key considerations within the healthcare staffing industry include the following:
1. Payer Mix and Reimbursement Model
Groups with a higher percentage of value-based care, capitation, or shared savings arrangements often receive higher multiples due to predictable, recurring revenue and better alignment with risk-based models.
Heavy dependence on fee-for-service Medicare or Medicaid can lower valuations due to margin pressures.
2. Panel Size and Attribution
Buyer interest increases with large, attributed patient panels, especially when tied to risk-bearing contracts (e.g., Medicare Advantage, ACOs).
A well-managed panel tied to high-quality scores and risk-adjusted revenue can significantly increase value.
3. Geographic Density and Market Position
Groups with regional density and brand strength in a metro or suburban market tend to command higher multiples due to economies of scale and referral capture.
Being the dominant provider in a market reduces competition and increases strategic value.
4. Provider Composition and Productivity
Practices with a stable mix of physicians, APPs (NPs/PAs), and low turnover are more attractive.
High productivity per FTEÂ and efficient scheduling/billing practices drive higher margins and valuations.
5. Infrastructure and Scalability
Strong clinical and administrative infrastructure, including EMR systems, care coordination, and centralized billing, supports scalability.
Buyers pay premiums for groups that can be easily integrated or used as a platform for expansion.
About Scope Research
Scope Research compiles a variety of healthcare M&A databases and provides healthcare valuation services. The Scope Research Healthcare M&A Valuation Database currently has financial details for 144 primary care, urgent care, and occupational medicine deals going back to 2010, 86 of which include reported EBITDA multiples. The data can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Contact Will Hamilton at will@scoperesearch.co with questions about our healthcare M&A databases.
About HealthFMV
HealthFMV specializes in appraising healthcare businesses and services arrangements, including primary care practices.
Read more about primary care valuations, or reach out to whamilton@healthfmv.com with valuation -related questions about your specific situation.