Private Equity Isn't Buying Cardiology Practices, It's Buying Your Physician Relationships
- 3 days ago
- 6 min read
Written by Jack O’Connor, Founder/CEO
Jack O'Connor is a former paramedic and cardiovascular perfusionist turned health system executive with more than twenty-five years of leadership experience. He is the Founder of O'Connor Health Solutions, creator of the Physician Leadership Academy, and author of Career Derailers.
A health system CEO told me recently that he was not worried about private equity. “We employ most of our cardiologists,” he said. “They’re not going anywhere.” I understood the confidence. I also knew it was misplaced. Within five years, the relationships that CEO assumed were locked down will be the single most contested asset in his market, and employment, by itself, will not protect them.
This is the first of three articles on the most consequential competitive shift facing hospital service lines this decade, the convergence of private equity capital, federal reimbursement policy, and the migration of high acuity care to the ambulatory setting. The strategy is unfolding fastest in cardiology, which makes it the right place to begin. But make no mistake, what is happening to cardiology is a preview, not an exception.
The numbers are not subtle
The scale of private equity’s move into cardiovascular care has been extraordinary, and it happened quickly. Private equity acquisitions of cardiology practices increased from one acquisition involving seven locations in 2019 to 50 acquisitions involving 320 locations by the end of 2023. That represents more than a forty five fold increase in locations in roughly four years. Among respondents to MedAxiom’s 2024 survey, nearly half of all private practice groups were part of a private equity portfolio, up from effectively zero a few years earlier.
The pace did not cool in early 2025. Six cardiology practice acquisitions closed in the first two quarters of that year, matching the total number of deals reported for all of 2024. Major platforms, including Cardiovascular Associates of America, US Heart & Vascular, and Cardiovascular Logistics, have continued expanding through acquisitions and practice development. Cardiovascular Associates of America now reports more than 557 physicians and advanced practice providers across more than 160 locations, serving over one million active patients.
These are not necessarily distressed practices selling out of desperation. Many are established cardiovascular groups choosing partnership with capital over the alternatives in front of them. That choice is the part health system leaders need to understand.
What PE is actually buying
When a private equity platform acquires a cardiology group, it is tempting to think of the transaction as the purchase of a book of business, patients, charts, and contracts. That framing misses the point entirely.
What PE is buying is influence over the site of service decision. Every referral, catheterization, ablation, device implant, nuclear stress test, and echocardiogram represents a decision about where care is delivered and who captures the associated revenue. A platform that owns the physician group can influence those decisions and may direct eligible cases, subject to clinical judgment, patient choice, payer requirements, and applicable law, toward facilities with which it is affiliated, such as an ambulatory surgery center, office based lab, or imaging suite.
This is why the ambulatory surgery center is not incidental to the private equity thesis. The ASC is the thesis. Cardiology practices have reportedly attracted valuations ranging from eight to eighteen times adjusted EBITDA, depending on their size, productivity, and ancillary services. ASC ownership and ancillary services can further increase the value of the platform. Every procedure that moves to the ambulatory setting can make the platform that owns or operates that setting more valuable.
So when a PE group acquires cardiologists in your market, it is not simply hiring physicians who previously referred patients to your hospital. It is acquiring influence over, and potentially redirecting, the very volumes on which your service line was built.
The timing is no accident
The current wave is riding a regulatory tailwind that PE understood before most health systems did.
CMS finalized a three year phaseout of the Inpatient Only List, beginning with the removal of 285 mostly musculoskeletal procedures for 2026. CMS also expanded the ASC Covered Procedures List and added cardiac catheter ablation codes to it for the first time under Medicare. Heart Rhythm Advocates called the addition of several cornerstone electrophysiology ablation codes one of the most significant federal advancements in how and where electrophysiology care is delivered in more than two decades.
Meanwhile, the volume and revenue mix are already shifting. Kaufman Hall’s January 2026 national data show that outpatient revenue per calendar day had grown 26 percent since January 2023, compared with 21 percent growth in inpatient revenue per calendar day. The ambulatory shift is an operating reality, not merely a forecast.
Read those facts together, and the strategy becomes obvious. Federal policy is creating more opportunities for cardiovascular procedures to move into ambulatory settings. Private equity is buying physician groups that influence where those procedures are performed and investing in ambulatory facilities capable of receiving them. The two developments are mutually reinforcing parts of the same market shift.
The pitch your cardiologists are hearing
To understand why this works, you have to hear the offer the way your physicians hear it. The private equity pitch is straightforward and, frankly, compelling, meaningful equity, real autonomy, ancillary income, relief from administrative burdens, and a genuine seat at the table in decisions that shape their professional lives.
Those happen to be the exact things many employment models stopped offering years ago. A cardiologist on a wRVU treadmill, watching annual fair market value adjustments erode the value of harder work, with “input” that amounts to being briefed after decisions are made, is not a cardiologist who is difficult to recruit. The PE platform is not promising the moon. It is promising the things your physicians used to have.
The part that should worry you most
Here is the detail health system leaders most often miss. Cardiology has consolidated differently from radiology or dermatology, and as a result, industry observers expect private equity platforms to target both independent groups and hospital employed physicians.
That CEO who told me his employed cardiologists “aren’t going anywhere” had it exactly backward. His employed group is not off the board. It is the next recruiting pool. A two year old compensation model, a governance structure that treats physicians as labor rather than partners, and no credible answer to the question, “Where will my procedures live in 2028?” do not constitute a retention strategy. Together, they create an invitation.
What actually holds physicians
The systems that will keep their cardiovascular programs through this decade are not necessarily the ones with the most defensive contracts. They are the ones offering genuine partnership. In my experience, that comes down to three things.
Real economic partnership. Joint venture ASCs with meaningful physician equity. Co management agreements with actual authority. Ancillary participation. Not a thank you at the medical staff dinner, but ownership.
Governance with teeth. Physicians who help make site of service and capital decisions are less likely to be recruited by someone promising them that authority. Voice is not a perk. It is the retention mechanism.
A credible ambulatory strategy. If your system has no plan for where PCI, EP, and structural heart volumes will live in 2028, your cardiologists will find a partner who does. It may be the partner who can also write an eight figure check.
All equity, ancillary, and management arrangements must be structured in compliance with applicable fraud and abuse laws, fair market value standards, and other regulatory requirements.
The real question
The systems losing their cardiovascular programs will not lose them in one dramatic departure. They will lose them one ablation at a time, as volume shifts to facilities their own physicians co own with someone else.
The question is no longer whether you need a physician alignment strategy. Every system claims to have one. The real question is whether your alignment offer is competitive with equity in an ASC and a valuation of eight to eighteen times EBITDA. For most systems today, the honest answer is no.
That answer can change. But the window to become the partner of choice, rather than making a desperate counteroffer after the term sheet arrives, is open now, and it will not remain open indefinitely.
In Part 2, I will show why this is not a cardiology story at all. It is a pattern playing out across nearly every major specialty, and it is concentrated, with striking intensity, in one region of the country.
Read more from Jack O’Connor
Jack O’Connor, Founder/CEO
Jack O'Connor is a healthcare strategist, author, and speaker on physician leadership and executive career resilience. His career began in the back of an ambulance as a paramedic, advanced through the cardiac operating room as a perfusionist, and culminated in more than twenty-five years of health system executive leadership. He is the Founder and Managing Principal of O'Connor Health Solutions and the creator of the Physician Leadership Academy, where he helps clinicians make the journey from bedside to boardroom. He is the author of Career Derailers and multiple works on leadership and organizational strategy. His conviction is simple, careers do not fail from lack of talent. They fail from unexamined blind spots.
