Independence is now the scarce asset.
Physician-owned practices are now the minority. Owners who stayed independent hold something buyers want, and preparation decides what it is worth.
In this article
In January 2018, hospitals, health systems, and corporate entities owned 29.8 percent of U.S. medical practices. By January 2026 they owned 63.9 percent, according to the latest report from the Physicians Advocacy Institute and Avalere Health. Only 36.1 percent of practices are still physician-owned.
Physicians Advocacy Institute and Avalere Health, 2021 and 2026 reports
The physician numbers moved even faster. Eighty-two percent of U.S. physicians now work for a hospital or a corporate entity, up from 52 percent at the start of 2018, and in rural areas the figure is 80.2 percent. One caution from the study's own methodology: some physician-owned professional corporations may be counted as corporate, as Becker's pointed out, so true independence could be a little higher than the headline. The direction isn't in doubt.
Who is buying
Hospitals are still the biggest employer by far, with 59.7 percent of physicians on hospital payrolls. The fastest growth is on the corporate side: private equity firms, insurers, and other corporate entities grew their physician workforce by about 92 percent over the study period, from roughly 77,800 to roughly 149,600. Between them, hospitals and corporate buyers acquired about 85,000 practices from 2018 to 2026.
Physicians Advocacy Institute and Avalere Health
For independent owners, that creates an unusual position. Independent practices are getting rare, and rare things draw attention. An owner who stayed independent holds something buyers want: an established patient base, referral relationships, and physicians still invested in the practice they built.
Scarcity is not the same as value
A scarce asset is only valuable if it's ready to be looked at. Buyers pay for what they can verify. A practice with clean financials, stable payer contracts, and physicians committed to staying draws serious interest. A practice with messy records and uncertain retention draws discounts, or silence.
Preparation pays whatever you decide
Getting ready is worth doing even if you never sell. The same work that raises a valuation makes a practice easier to run and gives the owner real options: staying independent, affiliating with a larger group, or selling on terms the owner sets.
- Financials. Clean, normalized statements that show what the practice truly earns.
- Payer contracts. A clear picture of your payer mix and the terms of each contract.
- Providers. Agreements that reflect how the practice actually works, and a plan to keep key physicians and staff.
- Compliance. A coding and billing review before a buyer does one.
- Operations. Leases, systems, and data a new owner could take over without disruption.
Questions to ask any buyer
If you do talk to buyers, the conversation runs both ways. Ask how clinical decisions will be made after close, and by whom. Ask how physicians will be paid and how that changes over time. Ask what happens to your staff, your systems, and your practice's name, and what any non-compete covers and for how long. Then ask to speak with physicians at practices the buyer acquired a few years ago. Their answers will tell you more about life after a sale than the offer letter will.
Start before you need to
The owners with the most options are the ones who prepare before a buyer calls. Starting early gives you time to fix what a buyer would find, and to decide what you actually want.
Talk to Northstra Health.
Northstra Health's advisory team provides sell-side preparation, valuation readiness, and an independent read for owners of physician practices and research sites.
