It’s job-hunting season, and I’ve received a variation of the following question several times this week alone: “How do I figure out if a practice I interview at might sell to private equity?”
I appreciate the fear of joining a private practice only to have the rug pulled during the workup in a sale to private equity. It’s what I was worried about when looking for jobs in 2017, what I was scared of when I entered practice in 2018, and what happened to some of my friends in 2018-2019.
My group was and is fiercely independent, and I was fortunate that the Dallas area was not ripe pickings for Radiology Partners, unlike Houston and Austin markets. But I had many of my friends end up on the wrong end of a sale and eventually change practices.
I have also certainly spilled enough digital ink on this topic over the years myself, so I am probably not entirely free from blame for increasing the collective anxiety about this issue.
But I do think that at this juncture, it’s relatively low risk.
The era of PE expansion in radiology through debt-fueled acquisitions of individual practices is essentially over, as far as I can tell. This is a model almost entirely dependent on the zero interest rate environment of the twenty-teens. The costs of borrowing money now are too high to enable these shenanigans, and the degree of leverage these companies have is already so high that there really isn’t any excess capital to deploy in acquiring individual practices when they also need to service their debt, pay for operations, and invest in AI and other magic.
Furthermore, the PR is not great at this point, and I doubt most practices that are actually healthy would want to sell. No one is buying the initial magic & sparkles pitches, so I don’t think either party wins in 2025, and everyone knows it. A struggling practice wanting to hitch their ride to a larger organization and/or extract some value before implosion would be a different story—but those would be less desirable for a purchase. RP, USRS, and LucidHealth may not be that good at actually running a radiology business, but they are very good at their real business, which is a primarily finance game that happens to involve healthcare.
So, investing tens of millions of dollars (even if you had them to burn) in an individual practice acquisition is very risky in 2025. Since these companies have reached scale, there are better ways for them to grow.
Private equity is more likely to grow their workforce through hiring individual radiologists than they are through group purchases, and they’re more likely to grow their imaging volume through organic growth or contract sniping than they are through the outright purchase of a practice. They can also grow by picking up the pieces when someone else fails, like RP did when Envision “transitioned” the corpse of its radiology business.
The “hostile takeover” is still somewhat possible, in the sense that an RP or similar could swoop in and try to steal a contract from a local group, have that local group dissolve because that contract represented a large fraction of their business, and then hope to hire up some of those radiologists for free on the back end to essentially keep the jobs they already had but have since lost (as in, keep staffing the hospitals they were already staffing before the contract change).
This has happened before, but even this, I think, is relatively unlikely to happen now or happen at scale, because these PE companies are not immune from the challenges in the market and have a hard time staffing as well (and also because many hospitals aren’t particularly happy with their level of service).
The reality is that private equity hasn’t gone away and won’t go away, but the greater fear for an individual practice is to implode under the weight of unsustainable image volume growth or be unable to provide the right lifestyle and compensation balance that are required to hire and retain radiologists in this increasingly nationwide market in the era of teleradiology.
A group failing because they can’t be competitive in the job market because their hospital won’t pay for the stipends to make their job competitive, for example, is a real concern. Could a PE-entity swoop in and hoover up some work there? Absolutely, but that’s not the same thing as your new practice screwing you over.
This is to say: If the job sounds good enough that you want to do it, then I personally wouldn’t worry much about it at this point. A healthy group probably doesn’t have much to fear from private equity in the short term given the radiologist shortage. The market itself is enough of a challenge.