From shrinking reimbursement margins to cyberattacks and staffing shortages, here’s five reasons why physician practices are shuttering in 2025:
1. Reimbursement challenges
For many independent physicians, reimbursement cuts remain the most immediate threat to survival.
In March, Lisa Egbert, MD, an OB-GYN, closed her longtime practice, Paragon Women’s Center in Centerville, Ohio, citing severe financial constraints largely driven by declining reimbursement rates. After nearly 30 years in business, Dr. Egbert had gone two years without taking a salary to keep the doors open before ultimately shutting down.
Similarly, Peoria, Ill.-based Bond Eye Associates closed June 27 after citing financial difficulties tied to rising operational costs and ongoing insurance reimbursement challenges.
2. Cyberattacks
Cybersecurity breaches have become an increasingly common, and costly, cause of closure for physician practices.
In February, Pinehurst (N.C.) Radiology Associates closed “for the foreseeable future” after discovering suspicious network activity linked to another cyberattack. In July, Alpha Wellness and Alpha Medical Centre in Alpharetta, Ga., permanently closed following a ransomware attack. An investigation revealed that hackers had accessed the personal health data of 1,714 patients, forcing the practice to halt operations.
While the full scope of the incident remains under investigation, the closure highlights how smaller physician groups remain particularly vulnerable to cyber threats due to limited IT infrastructure and security resources.
3. Legislative and regulatory shifts
Regulatory and policy changes have also spurred consolidation and closures, especially among smaller clinics.
Augusta Medical Group, part of Augusta Health in Fisherville, Va., announced plans to consolidate three care sites — Buena Vista Primary Care, Churchville Primary Care and Weyers Cave Urgent Care — as part of its financial restructuring efforts. In a Sept. 4 statement, Augusta Health attributed the decision in part to adapting to the One Big Beautiful Bill Act, noting that consolidation would help ensure long-term financial sustainability while maintaining consistent care delivery across the Shenandoah Valley.
“These decisions are never easy,” said Kris Doan, president of Augusta Medical Group. “But they demonstrate Augusta Health’s commitment to deploying innovative access strategies for addressing demand at the neighborhood level.”
4. Legal issues
Some closures stemmed from compliance failures and legal scrutiny.
In Paramus, N.J., a clinic known as the Stress Reduction Clinic was ordered to cease operations after a judge issued a temporary injunction against its operator, Imran Rasid, who allegedly posed as a licensed physician. Rasid, who called himself “Dr. Imran Rasid, MD, PhD, Board Certified Therapist,” was accused of practicing without any state license in medicine, psychology, counseling, or addiction treatment.
5. Physician shortages
A worsening shortage of clinicians continues to drive practice closures, particularly in primary care.
On June 30, Anchor Medical Associates of Providence, R.I., closed all three of its offices, leaving an estimated 25,000 patients without a primary care provider. The group cited an inability to recruit replacements for retiring physicians, underscoring a national trend of dwindling physician supply, especially in community-based and independent practices.
