Multispecialty physician practices (MSP) incentivize referrals from generalists to be made to specialists within the practice. With growing acquisitions of MSP by private equity funds (PE), there is concern that high-powered for-profit incentives of PE may accelerate misalignments in patient-physician relationships to increase self-referrals with unknown implications for patient welfare. Using novel data on PE acquisitions linked to Medicare claims data, I advance the literature on PE and vertical integration in health care markets by studying the precise ways that acquisitions of MSP by PE change strategic referral behavior. I base my empirical analysis on 230 acquisitions of MSP over a 4-year period. Using a discrete choice model, I find that PE acquisitions increase self-referrals by 7 percent. I then consider the channels through which acquisitions produce such large changes in self referrals, finding that increased market power or endogenous acquisition selection cannot explain increases in self-referrals. Rather, my main results are driven by the adoption of PE’s managerial strategies. Finally, I consider the welfare implications for patients and payers. Self-referrals can reduce welfare if they foreclose competing specialists from accessing patient referrals; on the other hand, self-referrals can improve welfare if they facilitate care coordination between generalists and specialists. I find both forces to be present. Taken together, this paper contributes policy-relevant evidence of the heterogeneous effects of vertical integration that depend on the managerial environment that shape provider incentives. As the United States continues to transition towards value-based care contracts that pay for clinical performance, corporate ownership in multispecialty settings may have the potential to balance profitability and patient welfare by leveraging managerial skills to improve clinical in addition to financial outcomes.