Physician practices face mounting financial pressures as operating costs rise and Medicare physician payments decline in inflation-adjusted terms. The percentage of physicians who own their practices fell from 60% in 2012 to 44% in 2024, while 56% now work for hospitals, health systems, or corporate entities. In this Industry Voices article, legal, clinical, and financial experts outline alternatives to private equity for practices seeking sustainable growth.
The authors identify four strategies: maintaining the existing practice model while making targeted improvements or acquiring smaller practices; expanding independently through financing, ancillary services, extended hours, competitive staffing, outsourced administrative functions, and AI-enabled tools; pursuing physician-led consolidation through partnerships, mergers, joint ventures, or shared management services; and considering external investment cautiously, with attention to investor expectations and the potential impact on clinical priorities.