What Private Equity’s Growing Role in Medicine Means for Physicians

What happens when a new owner buys the clinic where you work, but you still carry the responsibility for your patients? Private equity’s growing role in medicine has brought that question into sharper focus. An acquisition of your clinic likely will affect your pay, working conditions, and control over patient care. 

Gardner Employment Law helps physicians understand the employment terms that shape their options before and after an ownership change.  Read on to learn more.

Why are physicians pushing back against private equity?

Physicians are resisting purchases of medical facilities because they want to protect their clinical independence and their individual judgment regarding patient care.  Recent Wall Street Journal reporting describes physicians forming professional groups to challenge corporate influence in medicine. Some groups are working with lawmakers, while others are educating physicians about private equity’s impact on their profession.

For physicians evaluating an acquisition, several questions deserve attention.

• Clinical decisions – Who has the final say over treatment plans, testing, and referrals?
• Staffing and scheduling – Who determines appointment lengths, patient volume, and clinical support?
• Compensation – Could new productivity targets or bonus formulas change physicians’ compensation?
• Professional independence – What process allows the physician to raise concerns about policies that affect patient care?

Here is what an ownership change can mean for you:

The scrutiny extends beyond who formally owns a practice. A management services organization, or MSO, can provide business support such as billing and administrative services. The legal concern arises when management authority crosses into control over medical care.

Existing rules in some states already limit that control. For example, the Medical Board of California identifies treatment decisions, referrals, and certain staffing and scheduling decisions as matters that licensed physicians must control. The rules governing your practice depend on your state and its governing statutes and regulations.

Texas has no statutory protection for physicians against private equity taking control of how decisions are made for patient care.

Before making an employment decision, identify the law that currently governs your agreement. Contracts usually identify which state’s law controls.  Review your existing obligations and any proposed amendments rather than relying on anticipated legislative changes.

What could the proposed federal legislation change?

Lawmakers in the both the House and Senate introduced the “Stop Corporate Takeovers of Physicians Act of 2026” in September. The proposal would generally require medical practices to remain majority owned and controlled by licensed professionals, with exceptions for hospitals and certain other providers. It would also restrict MSOs’ control over operations such as staffing, compensation, and scheduling.  Importantly, the new law would prohibit interference with clinicians’ professional judgment.

The proposal also targets certain contract restrictions. It would broadly prohibit noncompete, nondisclosure, and nondisparagement agreements involving covered professionals, with an exception for some noncompetes involving substantial practice owners.

The proposal does not itself change a physician’s current contract or create an immediate right to leave the practice. The published Senate record identifies it as an introduced bill referred to committee. This is legislation that you should follow.

Which contract terms should you review before an acquisition?

Start with your employment agreement, compensation plan, amendments, and any new documents the buyer asks you to sign. Before an acquisition, ask how the proposed arrangement allocates authority. Written protections for clinical judgment deserve close attention alongside the financial terms.

If you hold an ownership interest, review the sale and equity documents alongside your employment terms.

Use the chart below to guide that review.

Consider a physician whose practice promises that an acquisition will leave “compensation” unchanged. The base salary may stay the same, but a revised bonus formula or higher productivity target could still affect total earnings. Ask for the complete compensation terms and compare them with your current arrangement.

Likewise, do not assume that a sale automatically lets you terminate your agreement or collect severance. Check whether your contract addresses a change in ownership and whether a negotiated “Good Reason” provision protects against a material reduction in pay or duties. Any protection depends on its wording, applicable law, and compliance with required procedures.

Raise these questions before signing a new contract or an amendment to your current contract, accepting a retention payment, or submitting a resignation. Verbal assurances legally offer you no protection.  You must obtain specific written commitments.

Protect Yourself

A practice acquisition can reshape both your professional independence and your financial future. Understanding who controls your work, how your compensation operates, and what happens if you leave can help you make an informed decision. 

Gardner Employment Law can help you review those terms and understand your options as your practice changes hands.  We’re here if you need help.