Neurology physician practice M&A overview

See what’s driving neurology physician practice consolidation.

Walter Olshanski

Walter Olshanski

Managing Director, KPMG Corporate Finance LLC

+1 332-259-3301

U.S. neurology market overview

Strong sector tailwinds and expansion dynamics present major growth opportunity for neurology practices in the U.S.

  • Neurological diseases impact an estimated 100 million Americans every year and the annual spending on common neurological disorders is estimated to be around $800 billion.1
  • Neuro-related diseases are a significant concern for health systems.
  • Major factors driving the procedural volume growth within neurosurgery and neurology include aging population and increasing prevalence of obesity.
  • Neurological disorders disproportionately affect older adults, who are more prone to various central nervous system disorders.
    • An estimated 5.6 million of the 5.8 million Americans with Alzheimer’s are 65 years of age or older.2
    • The number of adults 65 and older is projected to nearly double from 55 million in 2019 to 88 million by 2050.2
    • The aging population is expected to increase the demand for neurology procedures.
  • Currently, there are approximately 16,400 neurologists in the U.S., a deficit of 11%3. With demand for services expected to increase, supply is increasing at a much slower rate.
  • Coupled with favorable macro tailwinds, neurosurgeons, on average, are more profitable than other physicians.
    • Neurosurgery is one of the highest paying specialties with an average salary of $687,000 per year.4
    • Neurosurgery and neurology physicians generate 5.0x and 6.8x, respectively, of their salary for their affiliated hospitals.4



Procedures by age1

Inpatient neurology procedures

Diagnostic treatments/tests


People with Alzheimer’s disease in 20192

~5.8 million Americans suffer from Alzheimer’s Dementia

Physician generated revenue vs average salary4


Highly fragmented U.S. neurology practice market5

Number of U.S. Neurology and Neurosurgery Physician Practices: 2,455

Neurology physician practice M&A activity overview

The highly fragmented U.S. neurology physician practice market dominated by groups with less than 3 physicians creates attractive dynamics for consolidation

  • The neurology physician practice market in the U.S. is largely unconsolidated and has been relatively untouched by outside investments.
    • There are over 2,400 neurology and neurosurgery physician practices in the U.S. and over 90% of these practices are comprised of five or fewer physicians.5
  • In the past, acquisition activity in hospital-based specialties has been slower as compared to activity in the free-standing practices space.
  • Fueled by the opportunities for diverse revenue streams, increasing outpatient surgical volume, aging American population, and growing importance of neuroscience services to healthcare, M&A activity in the neurology space is likely to accelerate.
    • Government reforms such as the shift from fee-based model to outcome-based model are motivating businesses to consolidate in order to achieve size and scale and remain viable in the market.
    • Private equity investments are also becoming an attractive alternative to strategic acquirers as they present an opportunity to leverage a financial firm’s capital resources, allow physicians to maintain clinical autonomy and experience long-term equity appreciation.

Neurology physician practice M&A activity2

Deal activity since 2014

Deal activity by geography since 2014

Key factors driving consolidation activity in the sector

Fragmented market

The sector is highly fragmented and is largely served by smaller private practices, presenting an opportunity to embark roll-up strategy.

Broaden customer base

By acquiring neurology physician practices throughout the country, investors can increase their revenue sources and gain access to a wider customer pool.

Diverse revenue streams

Providing multiple specialties and maintaining multiple sources of revenue, makes the organizations more attractive for potential buyers.

Favorable macro trends

Rising prevalence of neurology related conditions and high profitability of the specialty fuel the interest of buyers in the sector.

Centralizing back office functions

Combining back office functions including billing, management, inoffice services, etc. helps achieve economies of scale and gaining contract negotiation leverage.


  1. Merrit Hawkings - White paper on neurology
  2. Alzheimer's Association - 2019 Alzheimer's Disease Facts and Figures
  3. American Academy of Neurology
  4. Merrit Hawkings - Revenue Survey
  5. Practices with main specialty of neurology and neurosurgery per Definitive Healthcare


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