Podcast Summary: The 3 Main Reasons Why Physicians Sell Their Practices to Private Equity

Podcast: Becker Private Equity & Business Podcast
Host: Scott Becker
Episode Date: November 20, 2025

Episode Overview

In this episode, Scott Becker explores the central motivations behind physicians choosing to sell their private medical practices to private equity or professional investors. Drawing on recent conversations and his own experience, Becker breaks down the three core drivers for such sales and addresses the complexity of outcomes that result from these decisions.

Key Discussion Points & Insights

1. The Predominant Reason: Opportunity to Cash Out

[00:58]

• Physicians at a certain stage in their careers, especially approaching retirement, often have no feasible path for a lucrative exit from practice ownership unless they sell to private equity.
• Traditional buyouts by junior partners or colleagues are usually based on book value or accounts receivable, providing a much lower payout than a private equity sale would.
• Quote:
  "If you don't sell to private equity, you actually have no way of exiting your practice and taking money off the table. Thus, this provides an outcome in an asset sale that you otherwise really wouldn't get." — Scott Becker [01:10]

2. Expectations of Better Management and Sophistication

[01:46]

• Some physicians view private equity as a path to join a larger, better-managed, more professional organization.
• Joining a bigger group or a more "sophisticated" operation is perceived as a way to alleviate personal management burdens and potentially improve business outcomes.
• Becker draws a parallel to his own experience: his smaller law firm merged with a larger, better-managed firm, which, despite his initial reluctance, proved beneficial in the long run.
• Quote:
  "Sometimes that's the case, that you're doing it for better management. And again, all over the board whether that actually holds true or not." — Scott Becker [02:37]
• He cautions, however, that whether this improved management materializes varies significantly.

3. Necessity Due to Economic Distress

[02:54]

• Economic challenges or crises force some practices to sell to private equity out of necessity.
• Financial difficulties, poor organizational health, or other urgent negative developments often leave selling as the only viable solution.
• Quote:
  "They ultimately sell because something's gone wrong or horribly wrong in the practice and they need to sell." — Scott Becker [03:03]

Notable Quotes & Memorable Moments

• On the reality of practice exits:
  "Your junior partners, your other colleagues, want to buy you out based on book value or the AR or some variant of that, but they don't want to buy you out at a full price that private equity fund might pay." — Scott Becker [01:19]

• On the mixed satisfaction after a sale:
  "So many physicians are happy upfront when they do it, but end up in the long run not being pleased with the outcome." — Scott Becker [00:28]

Timestamps for Key Segments

• [00:00] — Introduction to the episode’s theme
• [00:58] — First reason: Exit/cashing out through private equity
• [01:46] — Second reason: Hopes for better, professional management
• [02:54] — Third reason: Forced sales due to financial trouble
• [03:56] — Recap of the three main reasons

Summary Flow & Tone

Scott Becker speaks candidly and pragmatically, blending personal experience with industry observation. He acknowledges both the appeal and pitfalls of private equity sales, presenting a nuanced perspective relevant to physicians considering such decisions. The episode is concise, focused, and accessible, offering clear takeaways for anyone interested in the intersection of private practice and private equity.