A growing number of primary care practices are joining independent physician associations as a way to gain leverage in contract negotiations with insurers and avoid merging with large health systems, according to a Feb. 16 KFF Health News report.
The shift comes as physician employment continues to climb nationwide. Nearly 80% of U.S. physicians are now employed by hospitals, health systems or corporate entities, according to a 2024 Avalere analysis.
Five notes on IPAs and what’s driving their growth:
1. IPAs operate similarly to unions. As more individual primary care offices join, they gain market power in securing higher reimbursement rates in payer contracts. According to the report, hundreds of IPAs exist across the U.S.
2. Economic challenges are especially acute in primary care, where clinicians typically earn lower salaries and receive lower reimbursement rates than many specialists, while facing rising operating costs. Workforce shortages and growing administrative demands have further strained independent practices. The Association of American Medical Colleges projects a nationwide shortage of up to 86,000 physicians by 2036. Meanwhile, the number of patients unable to find a primary care physician has climbed in recent years. For some practices, joining an IPA offers a way to gain negotiating leverage and infrastructure support without selling to a health system.
“If independent IPAs can create the infrastructure support to make independent practice viable, then that’s a good thing,” Karen Johnson, vice president of the American Academy of Family Physicians, told the news outlet. The organization has heard from a growing number of practice owners who previously joined health systems and are now looking to return to independent practice through IPA membership.
3. Payers in some cases prefer working with IPAs because they can help preserve access to community-based primary care while creating a large enough patient pool to support value-based contracts. A larger patient base helps spread financial risk, which is a key requirement for value-based payment models to function effectively.
“We’re looking at independent practices that aren’t buoyed by … these large health systems and can support members in the community in the ways that they want to be supported,” Lisa Glenn, a vice president with Blue Cross Blue Shield of Massachusetts, told KFF.
4. Although value-based payment models were promoted as a cornerstone of the Affordable Care Act, fee-for-service reimbursement remains dominant more than a decade later. Some healthcare leaders say broader IPA participation could help primary care groups build the scale and infrastructure needed to take on financial risk and expand value-based arrangements.
5. While some IPAs are owned and governed by physicians, others are backed by hospital systems or private equity firms and may not focus primarily on preventive care. The American Academy of Family Physicians advises physicians considering IPA membership to evaluate governance structure and decision-making authority.
“Who’s calling the shots, who’s making the decisions, and is it really focused on the best interests and long-term benefit of physicians in practice and their patients?” Ms. Johnson sai
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