As consolidation pressure mount and contract pressures continue to eat away at practices’ bottom line, several new trends have emerged that are shaping the fate of private practices.
1. The rise of risk-based models
The rise of new models of care, including risk-based models, presents new challenges for independent facilities facing soaring operational costs, staffing shortages and other operational obstacles.
“You’re disadvantaged in so many ways. The world is moving to risk-based models, and it’s hard to have the infrastructure to be competitive in a risk-based model as a solo practitioner or even in a small to medium sized practice,” Mark Langston, chief development officer of Raleigh, N.C.-based Compass Surgical Partners, told Becker’s. “You’re disadvantaged in coordination of care with risk-bearing entities and narrow networks, you are severely disadvantaged from a contracting perspective, and you simply can’t afford the infrastructure to be competitive in that environment. Health plans are focused on having large systems in their network, that’s what allows the plans to grow and compete for the premium dollars in a given geography.
2. Relationships with payers, vendors and other stakeholders
As operational costs continue to climb and reimbursements rates for physician practices and ASCs remain a significant economic concern, leaders must carefully evaluate a potential partners’ relationship with payers and other stakeholders.
“Strong partnerships with payers remain critical,” Tony Brunazzi, executive director of Tri-State Orthopaedics & Sports Medicine in Pittsburgh, Pa., told Becker’s. “By using data on patient outcomes and experiences, it’s possible to negotiate fair reimbursement and adopt payment models that reward quality care, efficiency,and long-term value.”
Among independent practices, the most influential factor in deciding to sell off to either hospitals or private equity companies in 2024 was the ability to better negotiate higher payment rates with payers, according to the American Medical Association’s Physician Practice Benchmark Survey.
3. A growing movement of independence-forward companies
As corporate entities grow their interest in fragmented areas of healthcare, a growing wave of independence-centered ASCs, development companies, and management services organizations are trying to put the market power back in the hands of physicians and administrators.
Becker’s has reported on at least nine of these companies in the last year, the most recent being Pelto Health Partners. The group was born from a collaboration among Durham, N.C.-based Emerge Ortho, Indianapolis-based OrthoIndy and Seattle-based Proliance Surgeons. The groups all share a commitment to supporting private practice sustainability. Pelto is a platform that aims to support small to midsized independent groups, particularly those struggling with nonclinical burdens, vendor negotiations and infrastructure investments.
4. Employer-built health plans
As consolidation pressures mount and insurer contracts squeeze independent practices, some physicians are finding an unlikely ally in employer-built health plans.
Carl Schuessler, co-founder and managing principal of Mitigate Partners, told Becker’s that these plans can benefit independent practices, especially those in smaller and more rural markets.
“Insurer-built plans are ‘self-funded’ but still stacked with insurer components that make them money. Employers don’t realize it. It’s like going to Vegas — the house always wins,” he said. “Employer-built plans are different. They’re built for the employer, their employees, their care. Their name goes on the ID card, not Blue Cross. And we layer in things like nurse navigation, chronic kidney disease management, musculoskeletal programs — 20+ cost-containment solutions.”
Physicians like these plans because they “pay quickly and more fairly,” Mr. Schuessler said. “Often 150% of Medicare, oncologists maybe 180%. Far better than what the [big insurers] pay. Plus, we cut red tape: pre-cert and prior auth exceptions in some cases. Doctors like that.”
These structural differences have ripple effects in physician recruitment and retention. In rural areas, where attracting specialists is notoriously difficult, the promise of fairer pay and greater autonomy can tip the balance, Mr. Schuessler said.
5. Recent legislative moves
President Donald Trump’s Aug. 13 decision to revoke Executive Order 14036, a Biden-era directive to scrutinize consolidation across industries, including healthcare, could have a ripple effect across physician practices, ASCs and hospital systems.
The repeal removes a layer of scrutiny over healthcare mergers and acquisitions, though existing antitrust laws remain in effect. While large health systems may gain more flexibility to pursue mergers and affiliations, physicians and leaders are weighing what it could mean for independence, negotiating leverage and future partnerships.
Jason Sansone, MD, president of Orthopedic & Spine Centers of Wisconsin in Madison, told Becker’s the shift could accelerate consolidation among orthopedic and spine practices.
“The revocation of Executive Order 14036 is expected to ease regulatory oversight of mergers and partnerships, creating a more favorable environment for consolidation,” Dr. Sansone said. “For spine and orthopedic groups, such as OSCW, this will likely accelerate activity as practices pursue opportunities to grow, align with hospitals or health systems and strengthen their negotiating position with insurers and suppliers.”
