What once set a successful medical practice apart — clinical reputation, patient loyalty, and operational efficiency, among other qualities — is no longer enough to guarantee long-term success. Today, the likes of size, scale, and strategic positioning matter more than ever.
Whether a practice is operating as a standalone entity or includes an integrated network of outpatient clinics and ambulatory surgery centers (ASCs), pressures in the market are mounting. Hospitals and health systems continue to acquire practices. Private equity is increasingly active. Payers are consolidating and negotiating harder. Costs — particularly for labor and supplies — continue to rise. The list of challenges grows, and also includes physician and staff shortages, increasing regulation, revenue volatility, persistent competition, and the emergence of telemedicine providers and wearable technologies, according to IBISWorld.
Amid these trends and barriers to success, many physician practice owners are asking the same question: Is now the right time to seek a strategic or financial partner?
Top Reasons Pushing Large Medical Practices Toward Partnership
Here are some of the top reasons why the answer is often yes.
1. Protecting market position
Across the country, hospitals and health systems, as well as private equity and large corporate platforms, are rapidly consolidating physician practices. For example, a Physicians Advocacy Institute and Avalere joint study found that nearly 60% of physician practices are now owned by hospitals, health systems, or corporate entities. Meanwhile, a 2025 JAMA Health Forum analysis similarly notes the fast-paced consolidation of practices by hospitals and private equity firms.
As these larger players expand, they often negotiate better contracts, invest more in marketing, and access referral pipelines that smaller, standalone practices may find difficult to compete with. A strategic or financial partner can give independent practices the scale and infrastructure needed to not only hold their ground but thrive in this increasingly consolidated landscape.
2. Accessing capital for expansion and strategic investments
Expanding a clinical footprint, acquiring complementary practices, building a new ASC, or investing in new technologies often requires capital beyond what most physician groups are comfortable investing personally. A partner can provide the financial resources to turn growth opportunities into reality and do so without exposing practice owners to excessive financial risk.
Beyond funding, partners may bring development expertise, operational support, data analytics, and supporting service lines that help practices better identify viable and profitable growth opportunities. The combination of capital and strategic support can empower practices to scale more successfully.
3. Strengthening payer contracting and revenue cycle management
Securing favorable payer contracts is increasingly challenging for independent groups. Larger organizations typically have better leverage and scale, more experience negotiating increasingly complex terms, and the analytics to back up rate and access requests. Partnering with an organization that has these capabilities can open doors to more advantageous reimbursement, improved contract terms, and access to payers that may have been previously out of reach. For practices expanding into new markets or adding service lines and/or facilities (e.g., ASCs), this type of contracting strength can have a substantial impact on financial performance.
In addition, as payers move toward value-based reimbursement and downside risk arrangements (e.g., accountable care organizations, capitated contracts, bundled payments), many independent practices lack the infrastructure, data analytics, and care coordination resources to participate effectively. A strategic partner can offer population health tools, risk stratification models, and care management support, while also helping practices navigate complex reimbursement structures, thus enabling them to stay competitive in an evolving payment landscape.
Alongside payer contracting comes the critical need for strong revenue cycle management. But many practices struggle with the intricacies of coding, billing, and collections, often relying on outdated systems or overburdened staff. This can lead to increases in claim rejections, denials, and delayed or lost payments. A strategic partner may be in a position to provide centralized revenue cycle operations that lead to improvements in cash flow, denials and appeals, and compliance. These partners often offer advanced analytics that further help identify trends and pinpoint areas for improvement. The result is a more efficient and predictable revenue stream that supports both short-term stability and long-term planning and investments.
4. Recruiting and retaining talent
Attracting and retaining top talent — both physician and staff — is one of the most urgent and difficult challenges facing practices today. From wage inflation to burnout, maintaining a high-performing team requires more resources than ever. Strategic partners can provide human resources (HR) support, competitive benefits packages, and workforce development programs that appeal to today’s healthcare professionals. An infusion of capital can also help practices recruit new physicians and fill critical staffing gaps. In addition, the right partner can support the development of a sustainable staffing model that promotes growth and quality while helping to decrease turnover and burnout across clinical and administrative roles.
5. Reducing administrative burden on physicians
As practices grow, so do the administrative demands on physician owners and clinical leaders. Managing everything from payroll to compliance to IT infrastructure can distract clinicians from their core clinical responsibilities and accelerate burnout. A strategic partner can assume some or much of this operational burden and introduce the likes of standardized systems, management teams, and support services that improve efficiency.
It is also important to note that some investments aimed at reducing physician workloads accomplish much more. Take digital health, for example, which one could argue is no longer an optional offering for large practices. From telemedicine to patient engagement platforms, practices are expected to provide their patients — and physicians — with tech-enabled access, convenience, and transparency. However, implementing digital health tools is often expensive and time-consuming. A partner can accelerate a practice's adoption of digital health solutions by providing existing infrastructure, capital, and technical support, thereby helping practices enhance patient and physician experience, streamline operations, and better future-proof the business.
6. Improving supply chain efficiency
Rising costs of medical supplies and equipment, along with ongoing and/or the potential for supply chain disruptions, make procurement more complex, expensive, and time-consuming for independent practices. A partner with purchasing scale can offer access to preferred pricing, often through group purchasing organizations (GPOs), stronger vendor relationships, more efficient procurement, and streamlined logistics. This can not only help reduce costs but also better ensure more reliable access to essential supplies. In turn, practices can improve margins and maintain consistent care delivery without the stress of supply shortages or inflated prices.
7. Supporting strategic growth and long-term planning
Many large practices have a vision for growth but lack the bandwidth or expertise to turn that vision into a fully developed and then executed plan. Strategic partners often bring experience in areas including market analysis, facility planning, and multi-site expansion, helping practices map out and then execute viable long-term growth strategies.
Whether expanding into new regions, adding service lines, or building new facilities, a partner can provide the guidance, capital, manpower, and operational support to move from idea to execution.
With consolidation and commoditization affecting many specialties, marketing, branding, and differentiation have become increasingly important. A partner can provide expertise, digital strategy, and data-driven outreach to expand awareness of a practice and its physicians and services, build patient loyalty and referrals, and further position the organization as a market leader. This is especially valuable in more competitive urban and suburban regions.
8. Creating financial security and future options
For many physician-owners, a partnership offers a way to realize some of the value they have built while remaining actively involved in their practice. A partial liquidity event can provide financial diversification, reduce personal risk, and support retirement planning. Meanwhile, practice owners can often continue practicing, leading, and participating in upside through ongoing equity or performance-based incentives. This model offers flexibility: the ability to "de-risk" without fully exiting, while aligning with a partner that can enhance the value of the owners' remaining equity.
9. Enhancing data security and compliance
With rising cybersecurity threats and increased HIPAA enforcement, practices must invest in secure IT infrastructure and strong compliance systems. As noted, these investments — and their implementation — can be complex and costly. A strategic partner can offer financial and personnel support, along with access to advanced technology, enhanced cybersecurity protocols, compliance training, and auditing tools that are often out of reach for independent groups. This helps reduce risk while strengthening trust among payers, patients, and partners.
10. Preparing for future transitions and succession
As partners approach retirement or transition out of leadership roles, succession becomes a critical issue. Without a concrete plan, practices may face instability or loss of direction that can quickly weigh on profitability, staffing, and patient care and retention. A strategic partner can help formalize governance, create pathways for leadership transition, and better ensure continuity of care and operations. This not only supports a smoother transition but also makes the practice more attractive to future physician recruits who will likely want to see a stable path forward.
Looking Ahead: Achieving Strategic Alignment in a Shifting Medical Practice Market
In today's environment, staying competitive often requires more for large medical practices than continuing to go it alone. Partnering with the right organization does not mean giving up complete control. Instead, it can offer a chance to grow stronger, more stable, and more sustainable while preserving the values and services that have made the practice successful.
If your practice is considering a strategic or financial partner, VERTESS can help. Our experienced managing directors work exclusively with healthcare organizations and bring the insight and support needed to prepare for a sale, help increase value, attract the right potential partners, and negotiate a successful transaction outcome. Reach out today — we are here to help you explore what comes next.
J. Blake Peart, RRT, CM&AA
I have had the opportunity of an extensive and diverse career in healthcare for over twenty years. In the past ten years, I have served as CEO for multiple hospitals of Fortune 500 companies and CEO for several large Ambulatory Surgery Centers. In addition, my operations and business development knowledge has allowed me to experience the entire M&A process from start to finish focusing primarily on private equity transactions. My history as both a CEO and clinician provides a unique perspective based on years of experience and empathy when working with business owners seeking M&A advice. My expertise is in Ambulatory Surgery Centers, Physician Practices, and independent hospital businesses. I am here to support healthcare business owners who select the M&A direction as one who has walked in their shoes. I know that every transaction is unique and tailored to a seller’s need in getting the best deal and providing a positive experience throughout the entire process.
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