Policy Playbook | Regulatory Shifts Fueling Direct Primary Care (DPC) M&A

A recent federal tax law change is creating fresh momentum in the Direct Primary Care (DPC) market. Patients can now use Health Savings Accounts (HSAs) to pay for DPC memberships, a shift that eliminates a major barrier for employers and makes the model far more accessible for consumers.

This regulatory change is more than just a tax tweak; it’s a catalyst for growth and M&A activity across the DPC space.

Why This Matters for Employers and Investors

• Employer adoption accelerates: Employers can now fund DPC memberships with pre-tax dollars, making DPC a cost-effective healthcare benefit and broadening the addressable market.

• Investor appetite grows: DPC offers recurring membership revenue, strong patient engagement, and high physician satisfaction, all attractive fundamentals for private equity and strategic buyers.

• Consolidation runway: Despite rapid adoption, the DPC landscape remains fragmented with few scaled platforms, creating an opening for roll-up strategies and capital formation.

The Growth Story

The numbers tell the story: employer-sponsored DPC adoption grew 800% between 2017 and 2022. With regulatory tailwinds, favorable economics, and increasing demand for accessible primary care, the sector is positioned for continued expansion, and increasing M&A activity.

The Bottom Line

The policy environment has unlocked a new growth engine for Direct Primary Care. For investors and operators, the opportunity lies in building scaled platforms, leveraging recurring revenue models, and capitalizing on the consolidation trend.

At Sierra Pacific Partners, we help founders and investors navigate this landscape, whether through platform formation, strategic roll-ups, or preparing for a competitive sale process.