Third quarter, 2026 edition
State of Independent Practice
The figures that describe the operating environment for physician-owned practices, pulled from the original publishers and refreshed every quarter. No estimates of our own, no figures we could not trace.
Most of what gets written about independent medicine leans on a single statistic and a conclusion that was decided before the research started. This page is the opposite: the published figures, the publisher, the year, and a short note on what each one means if you own a practice.
Last updated September 2026. Next refresh January 2027, or sooner if AMA, MGMA or MedPAC publish before then.
Who owns the practices
42.2%
of physicians worked in a physician-owned practice in 2024
Down from 60.1% in 2012. Hospital-owned practice share rose to 34.5% over the same period. Source 1.
82%
of U.S. physicians counted as employed by hospitals or corporate entities as of January 1, 2026
Including 22.3% employed by corporate owners such as insurers and investor-backed groups. This study uses a different method than the AMA survey and the two are not directly comparable, but they point the same direction. Source 2.
What this means for an owner
Ownership has shifted for a decade, and it has not reversed. It has also not finished: a large share of physicians still work in practices they own, and those practices are the ones setting their own schedules, contracts and staffing models.
What the work pays
About 33%
decline in Medicare physician payment in inflation-adjusted terms since 1998
The CY2026 fee schedule raises the conversion factor 3.26% for most physicians and 3.77% for qualifying alternative payment model participants, which helps without closing the gap. Source 3.
What this means for an owner
Reimbursement is close to flat in real terms. That single fact is why operating discipline stopped being optional for independent practices: the revenue line will not absorb a rising cost line for you.
What it costs to run
84%
of medical groups reported higher operating costs in 2026 than in 2025
Averaging close to 11%, in a June 2026 poll of 251 practice leaders. Labor is the leading driver. Source 4.
90%
reported higher operating costs in 2025 than in 2024
Averaging an 11.1% increase, which makes 2026 the second consecutive year near that level. Source 5.
65%
of practice leaders name labor as their largest cost driver
Ahead of supplies at 17% and technology at 12%. Compensation for clinical support roles rose between 12% and 38.4% over five years. Source 5.
What this means for an owner
Cost growth near 11% against roughly flat reimbursement is the arithmetic every independent practice is living inside. It also means every hour of rework and every unused slot is priced higher than it was three years ago.
How much of the ceiling you collect
Near 12%
average claim denial rate
Up from 9% in 2016, measured across roughly 124 million claim remits. 84% of those denials were potentially avoidable and 44% originated in registration and eligibility. Source 6.
$258 billion
in U.S. administrative cost avoided through electronic transactions in 2024
Practices still working eligibility and claim status by phone are paying that difference in staff hours. Source 7.
What this means for an owner
Contract rates set the ceiling. Denials decide how much of it reaches the account. The share of denials that start at registration is the part most practices can fix without touching a clinician's day.
Whether patients can get in
31 days
average wait for a new patient appointment across 15 large metro markets in 2025
Up 19% since 2022 and 48% since 2004. OB/GYN averaged 42 days, gastroenterology 40, dermatology 36.5 and cardiology 33. Source 8.
73%
of practices reported no-show rates holding steady or falling in 2025
In a poll of 265 practices, while 27% saw increases. Holding steady is not the same as solved. Source 9.
What this means for an owner
Patients are waiting about a month to be seen while slots go unused the same week. Access is the most common place we find margin sitting in plain view.
What is left at the end
48%
of practice leaders say operating margin per full-time physician is worse than the prior year
Flat reimbursement, staffing costs, denials and downcoding were the named causes. Source 5.
What this means for an owner
This is the figure that decides whether independence is comfortable or precarious. It is also the figure most practices measure least often.
Sources
Numbered to match the citations above. Every link goes to the original publisher.
- 1. Physician Practice Benchmark Survey: 42.2% of physicians in physician-owned practices in 2024, down from 60.1% in 2012. American Medical Association, 2025. View source
- 2. Physician Employment Trends and Practice Acquisitions, 2018 to 2026: 82% of physicians employed by hospitals or corporate entities. Physicians Advocacy Institute and Avalere Health, 2026. View source
- 3. Medicare physician payment trend and the CY2026 Medicare Physician Fee Schedule final rule conversion factor updates. American Medical Association, 2026. View source
- 4. MGMA Stat poll of 251 practice leaders: 84% report higher year-to-date operating costs in 2026, averaging roughly 11%. Medical Group Management Association, 2026. View source
- 5. MGMA Stat polls: 90% of groups reported higher 2025 operating costs averaging 11.1%, labor named the largest driver by 65%, and 48% report worse operating margin per FTE physician. Medical Group Management Association, 2025. View source
- 6. Revenue Cycle Denials Index: average denial rate near 12%, 84% potentially avoidable, 44% originating in registration and eligibility. Optum and Change Healthcare, 2024. View source
- 7. CAQH Index: 258 billion dollars in administrative cost avoided through electronic transactions in 2024. CAQH, 2026. View source
- 8. 2025 Survey of Physician Appointment Wait Times: 31-day average for a new patient appointment across 15 metro markets. AMN Healthcare, 2025. View source
- 9. MGMA Stat poll of 265 practices on 2025 patient no-show trends. Medical Group Management Association, 2025. View source
Figures are reported as published. Studies using different methods are not directly comparable and are noted where that applies. Nothing on this page is a projection of results for any individual practice.
Where does your practice sit against these figures?
The Operating Baseline puts your own measures next to these: denial rate, days in A/R, time to third next available appointment, cost per encounter and margin per physician. You get the comparison in writing, with a 90-day plan for the gaps that matter.