Private equity deal count in healthcare services was down nearly 19% in the second quarter of 2026 compared to the same time last year, PitchBook finds.
This trend follows slow deal activity in the first quarter, and 2026 exit count is on pace to be down 26.5% from 2025. In its latest Q2 healthcare services report, PitchBook looked at four segments: generalist & multispecialty providers; physician practice management companies (PPMs); skilled care & behavioral health; and ancillary & outsourced services.
The largest transaction in the latest quarter was KKR’s $3.4 billion IPO of mobile patient care and EMS provider Global Medical Response. Within the ancillary & outsourced services segment, clinical staffing, diagnostic labs and ambulatory care services all remained strong. Within other segments, urgent and emergency care, elder care and fertility deals were bright spots.
The PPM segment remained especially weak, with 71 deals in Q2 compared to 89 in Q1 and 102 in Q4 of 2025. The segment is on track to decline 46% in 2026 compared to 2025. This is partly attributed to increased state scrutiny of private equity involvement in PPMs and tighter regulations slowing down deals. States like New York, Pennsylvania and Hawaii have recently increased oversight of healthcare transactions.
“That has had an impact from our conversations with several lawyers who focus on PE and healthcare services,” Brian Wright, lead research analyst of healthcare at PitchBook, told Fierce Healthcare. “It’s a longer regulatory process, and no one wants to be the first to go through a new regulatory process.”
Long-term, however, Wright believes PPMs will benefit from efficiency gains thanks to artificial intelligence, so he expects the current deal slowdown to be temporary and eventually rebound.
While it’s too early to say with certainty what is driving lower healthcare utilization rates in the first half of the year, Wright speculated it may be because of shrunk coverage for Americans who had relied on now-expired ACA subsidies. This could have had a chilling effect on deals because, while hospitals are traditionally the largest strategic acquirers of physician practices, they can’t proceed with deals if their bottom line has taken a hit due to lower utilization trends, Wright said.
Deal value was also down significantly in the first half of this year: $17.8 billion. The annual average since 2018 has been $62.8 billion, per Wright. “We’ve started the first half of the year in a pretty big deficit relative to past trends,” he said.
Meanwhile, ambulatory utilization has remained favorable in part because CMS has continued expanding what surgical procedures can be reimbursed in ambulatory surgery centers. “That’s just driving volumes to lower-cost settings. Because of that, ambulatory surgical center assets continue to be very sought-after assets,” Wright said.
The projected deal count for the first half of this year is 337, the annualized level of which would be 674. That’s the lowest PitchBook has seen since 2017. The average annual deal count from 2018 to 2024 was 903. But PitchBook expects a rebound to be imminent.
An indicator of a forthcoming rebound, according to one attorney cited in the report, is an increase in reorganization and cleanup-related engagements. These sorts of requests are typical when companies want to improve an underperforming asset before a sale.
“It’s hard to imagine that things stay at such a depressed level,” Wright noted. “We expect mean reversion going forward.”