Radiology physician practice M&A overview

See what’s driving consolidation in the radiology sector

Walter Olshanski

Walter Olshanski

Managing Director, KPMG Corporate Finance LLC

+1 646-874-4878


U.S. radiology market at a glance

Supported by favorable healthcare reforms and growing geriatric population, the radiology services market in the U.S. is expected to witness significant growth

  • The radiology services market in the U.S. generates approximately $19 billion, with independent private groups accounting for majority of the revenue.1
    • The industry is 95% unconsolidated and is distributed amongst health systems and independent radiology groups of various sizes.2
  • There are an estimated 28,348 radiologists in the U.S., with 20,970 of them actively aligned to patient care.3
    • Over 53% of total physicians in the country are above the age of 55, potentially leading to a shortage of physicians within the next decade.3
  • A growing elderly population, an increase in the rate  of cancer, technological advancements and greater patient flows as a result of the Affordable Care Act are the primary factors fueling the growth of the radiology sector.
    • 37% of diagnostic tests and procedures (including radiologic procedures) are completed for people over the age of 65.4
    • The number of people over the age of 65 is projected to increase from approximately 48 million to over 80 million by 2050.5
  • In 2018, the U.S. performed the second highest number of imaging exams in the world and had the second highest MRI and CT technology utilization rate.6


Radiology practice M&A activity overview

Several factors are contributing to the acquisition of radiology practices by both private equity funds and strategic healthcare organizations

  • Over the last five years, radiology physician groups in the U.S. has witnessed large-scale consolidation. Thirty deals were completed in 2018 which surpassed the previous high of 28 deals set in 2015.8
  • The trend for mergers and consolidation within the specialty has picked up pace primarily due to macroeconomic and industry trends, technological innovation, emphasis on size, scale and access to resources within radiology, and the emergence of private equity-backed groups.
  • Due to the growing number of government regulations in the sector and the pressure to introduce scale and scope in the fragmented industry, the momentum in deal volume is expected to continue in the coming years.


Key factors driving consolidation activity in the radiology sector

Highly market fragmentation

Presence of a large number of small players in the sector offers an opportunity for both private equity and strategic players to execute roll-up strategies within the sector.

Diverse revenue sources

Most groups have agreements with hospitals, urgent care clinics, outpatient diagnostic imaging centers and physician clinics, to diversify revenue sources.

Macro and industry trends

Financial stress faced by smaller practices due to the pressure of declining reimbursement, technological innovations, and increasing hospital expectations.

Centralizing back office functions

Larger practices can capitalize on economies of scale by combining back office functions such as IT systems, RCM, HR, and accounting, and leveraging increased bargaining power with hospitals and payors.

Technological innovations

Larger practices can spread the cost of IT investments more broadly enabling them to invest in new technology such as AI and machine learning.


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1IBIS World industry report (June 2019)

2VMG Health(March 2018)

3Merritt Hawkins - Radiology Recruiting Trends and Recommendations (May 2019)

4Centers for Disease Control and Prevention (CDC)

5U.S. Census Bureau

6JAMA - U.S. spends the most on healthcare—and imaging is a reason why (2018)

7OECD Health Statistics: Health care utilization (2018).

8Capital IQ, Irving Levin, Company websites, and Press releases



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KPMG Corporate Finance LLC’s investment bankers have extensive Healthcare transaction and industry experience, which enables them to understand the industry-specific issues and challenges facing our clients.