Healthcare private equity is moving at record scale. Global healthcare PE deal value reached a record high of $191 billion in 2025. But the economics behind these investments have changed:

• Hold periods are longer: Across industries, private equity holding periods are climbing. Healthcare hold periods have stretched to ~6.7 years. Of the 4,000 PE-backed companies that have been held for 5-12 years, 12.5% are in healthcare.
• The old playbook no longer delivers the same ROI: Buying multiple affordable small practices, bundling them into a larger asset, and selling at a higher per-practice price no longer yields the returns it once did.

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The new playbook is operational improvement: improve operations, streamline and automate where appropriate, and capture more revenue, so each practice itself is truly more valuable.

For multi-site operators, the question is which operational improvements move margin without disrupting clinical care?

‍Patient billing (and the broader patient financial experience) is one of the most direct. It affects realized revenue at every practice in the portfolio, and it can be standardized and improved without changing how clinicians practice. And the capital is following: according to Pitchbook’s H2 2025 analysis, investors are backing scaled, workflow-embedded platforms with automation and RCM exposure.

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In this guide, we explore:

• Why patient billing is a value-creation lever at portfolio scale
• Why fragmentation across acquired practices undermines that value-creation potential
• What the 2026–2028 environment specifically demands of operators.

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Why Patient Billing Is Now a Value-Creation Lever

The Patient Is the Fastest-Growing Payer Class

Patient financial responsibility keeps climbing. The average single deductible for employer-sponsored coverage hit $1,886 in 2025, up 17% since 2020. On the individual market, the average 2026 ACA silver plan deductible is $5,304.

And coverage shifts are further increasing self-pay exposure. McKinsey projects that 9–10 million members will exit the individual ACA marketplace by 2027 as enhanced subsidies expire and federal policy changes take effect.

More of every dollar owed to practices sits with the patient rather than the payer. Meanwhile, the unit economics of patient billing have only worsened. Managing self-pay receivables, negotiating payment plans, and handling patient disputes requires more staff, more unique follow-up touches, and less predictable resolution cycles than processing insurance claims. Providers are caught between two forces: more money to collect from patients, but at a high cost-per-dollar-collected.

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Revenue Leakage Is Now Measurable in Tens of Billions

Patient balances are growing faster than the systems built to collect them. The patient share of net revenue continued to rise in 2025, yet providers collected only 42% of that share. Net revenue lost to final denials and patient bad debt grew 25% in a single year, reaching more than $48 billion industry-wide.

Operational drag compounds the problem. Rising operating expenses are a problem for nearly all medical groups, and the increases are coming from every area of the organization.

At the portfolio scale, this means margin compression at every acquired practice unless billing operations are standardized and automated.

Portfolio-level revenue impact: A 1-point improvement in patient collection rate at a $30M-revenue practice with 7.3% patient share recovers roughly $22K in cash per practice each year. Apply that 1-point gain across 20 practices, and it is $440K. Across 50 practices, it is $1.1M. The improvement is recurring, not one-time, and it compounds into the figure the next buyer underwrites at exit.

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Why Fragmentation Undermines the Value-Creation Thesis

Every acquisition comes with its own billing infrastructure: a different EHR or practice management system, a statement vendor, a third-party collections relationship, a patient portal, and a set of staff workflows that may or may not match the rest of the portfolio. Each one is a hidden cost, and together they undermine the thesis that justified the deal.

The common assumption is “we’ll just migrate everyone to the dominant EHR.” In practice, that migration is expensive, slow, and disruptive to clinicians, so it usually stalls. Only about 35% of acquired hospitals switched to the dominant vendor of their acquiring system after a merger, and in physician-practice MSO settings, the friendly-PC structure often delays the transition further. The realistic picture is three to five EHRs running at once, with a five-year-plus roadmap to consolidate.

For patients, fragmentation shows up as inconsistent statements, multiple portals, multiple support phone numbers, and no continuity of payment history across the practices they visit. That friction has a tangible revenue cost. Of the roughly 20% of patients who switched providers in the past year, nearly 90% cited being “hard to do business with” as a reason.

For operators, fragmentation breaks the measurement layer. KPI comparisons across practices become unreliable, and decision-makers lose the visibility they need to underwrite the next acquisition. The “acquire, standardize, measure, repeat” playbook fails at the measure step because every practice reports differently, and there is nothing standardized to measure.

The fix is not another EHR migration. Standardizing and consolidating patient billing technology across the portfolio enables faster growth and more predictable outcomes, and it requires a patient billing layer that operates both above and inside the EHR, connected to the EHR instance of each practice through bi-directional integration. That layer creates a unified patient financial experience across the portfolio, standardized reporting at the operator level, and the clean data foundation that AI-enhanced RCM depends on.

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An Updated Playbook

Regulation Is Now a Portfolio-Construction Variable

State oversight of healthcare transactions has expanded quickly. At least 15 states have enacted some form of healthcare transaction review law as of 2025. Several new regulations address MSO and RCM activity directly:

• Oregon SB 951, the strictest corporate practice of medicine (CPOM) law in the country (effective Jan 1, 2026 for new MSO/PC entities and Jan 1, 2029 for legacy entities). It restricts MSO control over staffing, scheduling, billing, coding, and pricing, and it voids most physician, PA, and NP non-competes immediately.
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• California AB 1415 and SB 351, both effective Jan 1, 2026, expand pre-transaction notice requirements to PE groups, hedge funds, and MSOs, with 90 days’ pre-closing notice. AB 1415 defines an MSO as one that provides RCM, provider rate negotiation, or both, putting RCM-providing MSOs squarely in scope.
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• Massachusetts H.5159, effective April 8, 2025, raised noncompliance penalties to as much as $25,000 per week (up from $1,000). It also extended Massachusetts False Claims Act liability to investors and created a five-year post-transaction monitoring authority.

This means longer deal calendars, heavier post-close compliance, and more material risk for a poorly worded management-services agreement than in the recent past. Under this level of scrutiny, standardized and well-documented billing operations are easier to defend, audit, and demonstrate compliance compared to a patchwork of inherited vendor contracts.

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AI in RCM Has Crossed From Pilot to Deployment

AI is no longer experimental in the revenue cycle. Four out of five health systems are now exploring, piloting, or implementing AI for RCM, up 38 points in less than two years. McKinsey terms it “the race to a touchless revenue cycle,” with US health systems spending more than $140 billion annually in the categories AI is targeting. The largest opportunity is orchestration across AI tools, not deploying isolated point solutions. And orchestration requires standardized data. Practices running fragmented EHRs and disjointed patient-pay tools cannot deploy AI effectively, which makes a standardized billing layer the prerequisite for any portfolio-wide AI strategy.

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The Next Buyer Is Already Doing Diligence

Holds are longer and exits are more competitive. 51.6% of PE-acquired physician practices exit within three years of the initial investment, and over 97% of those exits are secondary buyouts to other PE firms.

The combination of rapid secondary exits and a more demanding buyer pool makes standardization above the EHR layer a top priority. Without standardization within the first 12 months, the operator loses the window to prove the margin lift required for a high-multiple secondary sale.

Buyers are also increasingly sophisticated about technical risk, due diligence, and operational maturity. A Deloitte analysis of hospital M&A found that the highest-value transactions are defined by a rigorous operating model that identifies specific value-capture areas during diligence, not after close. The presence of a mature, tech-enabled patient billing workflow is increasingly priced into multiples, and it is the kind of value-creation thesis the next buyer will inspect.

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Three Priorities for Portfolio-Scale Operators

1. Build Patient Billing Diligence Into Pre-Acquisition Workflows

Treat patient billing as a diligence-grade asset class, not post-close cleanup. Rather than “checking the box,” move toward a forward-looking thesis that audits how the RCM process can be optimized after close to shorten the cash cycle and strengthen compliance.

Break down silos early, encouraging finance and coding teams to collaborate during pre-acquisition to quantify exactly how correcting root-cause issues in medical billing and coding will translate into projected profit improvement.

Also, look closely at performance benchmarks by specialty and situation. Take Net Collection Ratio (NCR) for example: this is a common RCM performance benchmark, but the context of specialty and service model matters. A 96% collection ratio may be acceptable for a solo ENT practice, but elite multi-specialty groups should target a 98% to 100% NCR to maximize value. At portfolio scale, the gap between 96% and 99% is meaningful recurring cash.

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2. Standardize the Patient Billing Layer Early, Before Fragmentation Compounds

The cost of standardization increases with each additional acquired practice, so the cheapest time to act is the first 12 months.

Standardization also unlocks optionality. SVB research points to a new revenue stream for mature portfolios: medtech and pharma companies will pay a premium for curated RCM datasets, and a quarter of global pharma firms already spend at least $50 million annually on healthcare data. You cannot curate a dataset you cannot standardize.

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3. Treat AI and Automation as a Portfolio-Level Capability, Not a Per-Practice Project

The bar for health tech is rising fast: healthcare AI investment is projected to hit $22 billion, roughly 46% of all healthcare investment. That sets a high standard for the tech stack your portfolio is expected to support.

The data prerequisites for AI are at the portfolio level, so the capability should be, too. When you view AI-readiness at portfolio scale, you can truly take advantage of consolidated data, time-saving automations, and AI-enhanced workflows.

Execution and attention to detail — especially in integrations — is where value is won or lost. In high-value transactions, according to Deloitte, 100% of leaders reported spending adequate time on integration planning and execution. But in lower-performing deals, only 33% of leaders said the same.

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Standardize the Patient Financial Experience Across Your Portfolio

Patient billing has become a primary value-creation lever for MSOs and PE-backed platforms, but only when it is standardized above the EHR and measured consistently across every practice.

Collectly is built for cross-portfolio standardization of patient billing and RCM. The platform applies AI and automation across the full patient financial journey, integrates bi-directionally with any EHR or PM system, and gives patients a modern, portal-free way to understand and pay their bills. Operators get one standardized view of patient financial performance  and RCM KPIs across the portfolio.

Ready to make patient billing a portfolio-level advantage? Request a demo to see how Collectly standardizes the patient financial experience across every practice you operate.