Why I Said No to Private Equity — And Why It Might Still Be Right for You
Private equity (PE) gets a lot of hate in the medical world—and today, I want to talk about why I’ve said no to it (so far). But let me be clear: saying no doesn’t mean it’s always a bad idea. In fact, for some of you reading this, partnering with PE, an MSO, or even a group like Privia might actually be a smart move.
Let’s dive into the real pros, cons, and why this decision isn’t as black-and-white as it seems.
YouTube
Why Private Equity Wasn’t Right for Me (Yet)
When I launched my practice in Texas, I chose the traditional route: independent, insurance-based primary care. And let me tell you, the reimbursement rates here are brutal—many of my contracts were paying 60–80% of Medicare. That’s $60 for a visit Medicare reimburses at $100. Not sustainable if you’re trying to build something with quality and longevity.
Still, I didn’t sell. Why?
Because I love this. I love building something from scratch, something that supports not just my family but 20+ employees and their families. I enjoy waking up every day knowing we’re creating a patient-first, service-driven practice.
But even beyond passion, there’s a control factor. With PE, you give up ownership. I’ve watched colleagues lose their practices—replaced by mid-levels, locked out by non-competes, and sidelined from the businesses they started.
I want to keep building. I want to grow this thing into 5, 10, 20 locations—and then decide whether or not I want to divest to private equity. At scale, the valuation changes drastically. While one or two locations might only fetch 1–3x EBITDA, a larger group could sell at 10–15x. That’s how legacy-changing money is made.
But What If You’re Just Starting?
Now here’s the truth: for many of you, especially in closed networks (looking at you, California and Florida), starting a practice from scratch is nearly impossible. You can’t get insurance contracts. You can’t get credentialed. The system is rigged to keep you out.
In that case? Partnering with a PE-backed MSO might actually make sense. Think of it like buying a Subway franchise. Sure, you don’t own the whole brand, but you get a playbook, a support team, and a functioning business from day one. That’s worth a lot.
Groups like Privia (which I’ve criticized in other videos, by the way) offer that kind of “turnkey” solution. You might give up a percentage of your reimbursement, but in return, you get access to networks, billing services, EMR systems, and infrastructure that could take you years to build.
It’s not for me, but it might be perfect for you—especially if your goal is to practice medicine, not run a business.
The Real Retirement Plan
Here’s the biggest point I want to drive home: building a scalable, profitable practice is one of the best retirement plans physicians have.
If you can grow to multiple locations, create consistent profitability, and build a recognizable brand, the payday from selling to private equity down the road could be life-changing from private equity.
Yes, older doctors who sold out early did leave younger physicians in a tough spot. But instead of complaining, I’d rather lead by example. You can do this too—traditional, hybrid, or DPC. Just start. Build. Learn. Scale.
I get offers from PE firms regularly—even patients who own firms have tried to buy me out. But for now, I’m staying the course. Because I believe in what I’m building. And because this—this—is where the real value is.
Final Thoughts
Whether you partner with PE or go solo, just remember: there’s no one-size-fits-all in medicine anymore. What matters is ownership—of your future, your decisions, and your values. Don’t let anyone else decide for you.
If you’re on the fence, reach out. I consult with a handful of physicians every week. Happy to help you figure out what path makes the most sense for your goals.
Until next time—keep building.
– Dr. Brad | InvestingDoc
