Running an independent medical practice has never been simple, but today, the pressures are coming from nearly every direction. Reimbursement is tight. Labor and technology costs continue to rise. Administrative requirements consume time and resources. Payer negotiations are increasingly complex. As healthcare moves toward value-based payment, practices are being asked to manage populations, demonstrate quality, coordinate care, analyze data, and take on financial risk—all while continuing to see patients and run a business.
For many practice owners, the question is becoming difficult to avoid: Do we scale—or do we sell?
It is an understandable question, but it may not be the only one worth asking.
Why Independent Medical Practices Are Under Pressure
The decline of independent medicine is significant. In 2012, 60.1% of physicians worked in private practices. By 2024, that figure had fallen to just 42.2% (Kane, 2025).
The reasons aren't difficult to understand. Physicians report inadequate payment rates, costly resources, and regulatory and administrative requirements among the factors influencing decisions to sell their practices (Kane, 2025).
Consolidation has accelerated as a result. By 2024, at least 47% of physicians were employed by or affiliated with hospital systems (U.S. GAO, 2025). Primary care has undergone a particularly dramatic transformation: hospital affiliation among primary care physicians increased from 25.2% in 2009 to 47.9% in 2022 (Singh et al., 2025).
However, consolidation isn't necessarily synonymous with better healthcare. Research reviewed by the U.S. Government Accountability Office found that physician consolidation can increase prices and spending, while evidence of improvements in quality remains mixed (U.S. GAO, 2025).
For practice owners, however, this isn't an academic debate. It is a business decision with very real consequences.
Why Selling Can Look Like the Only Option
Joining a hospital, health system, private equity-backed organization, or other larger entity can solve legitimate problems.
Larger organizations may offer capital, technology, administrative infrastructure, negotiating leverage, and greater financial stability. For physicians exhausted by managing the business side of medicine, those benefits can be enormously attractive.
However acquisition also involves tradeoffs, including potential loss of physician autonomy and control over how the practice operates (Tewfik et al., 2024).
That is why the decision shouldn't simply be: Can we keep doing what we're doing—or should we sell? The better question is: What would have to change for this practice to remain independent and competitive?
Independence Requires a Different Kind of Scale
Traditionally, scaling a medical practice meant adding physicians, opening locations, or acquiring other practices. Those things may still matter. But today's healthcare environment requires another kind of scale: operational scale.
Consider what practices increasingly need to do well:
- Negotiate and analyze payer contracts
- Identify and manage high-risk patient populations
- Improve documentation and coding
- Track quality and financial performance
- Coordinate care across settings
- Manage referrals and network leakage
- Participate effectively in value-based contracts
- Understand where revenue is being earned—and lost
The challenge is that building all of these capabilities internally can be expensive, especially for independent medical practices.
Value-based care illustrates the problem particularly well. Smaller and independent practices face disproportionate barriers to value-based payment, including limited resources, narrow margins, infrastructure requirements, and the difficulty of assuming financial risk (O'Malley et al., 2024; Horstman & Lewis, 2026).
However there is an important distinction: Needing sophisticated infrastructure does not necessarily mean you need to become a large organization. It does mean you need access to the capabilities of one.
There May Be a Third Path
For practices considering their future, there are really three broad possibilities.
- You can sell, gaining access to infrastructure and capital while relinquishing some degree of ownership and control.
- You can scale internally, investing in the people, technology, systems, and expertise necessary to compete independently.
- Or you can pursue strategic scale: remaining independent while building partnerships and accessing capabilities that would be difficult or inefficient to create entirely in-house.
There is no universally correct answer. Some practices should sell. Others should merge, expand, or pursue new partnerships. But a practice shouldn't sell simply because its owners believe there is no alternative.
Before making an irreversible decision, leaders need to understand the practice's true financial and operational position. Where are margins being lost? Which contracts are performing? Where are referrals leaking? What populations represent opportunities? Which capabilities genuinely need to be built internally, and which can be accessed through partnerships?
Those answers can change the conversation from "Can we survive?" to "What would it take to thrive?"
Building a Sustainable Independent Practice
Independent medical practices aren't struggling because independence itself is obsolete. They are operating in a healthcare system that increasingly rewards capabilities many practices were never designed—or resourced—to build alone.
Surviving today's landscape requires a different operating model than it did a decade ago. The practices positioned to remain independent will need to understand where they create value, strengthen the areas where they are vulnerable, and develop the operational infrastructure to compete.
At Value-Based Care Transformation Partners, we help practices understand where they stand, identify what is holding them back, and build the infrastructure and partnerships necessary to compete in a changing healthcare environment.
If you're wondering whether your practice needs to scale, sell, or find another path forward, talk with us before you decide.
