Unlocking the competitive edge: 3 advantages independent practices have over hospitals and corporations

As physicians continue to depart from independent practices to join larger healthcare organizations, the industry is experiencing a profound shift. The effects of this can be felt by physicians and patients alike. Faced with the growing challenge of attracting and retaining top talent, independent practices must find a way to compete with these larger organizations while maintaining the qualities that make private practice unique.

To support independent practices in this endeavor, Tebra surveyed 101 healthcare providers (including nurse practitioners, physicians, and specialists) in the United States. We aimed to determine the key differences among practice types. 

In this article, we'll dive into the findings to unveil why physicians leave private practices and pinpoint key benefits that independent practices can highlight to stay competitive.

Today’s healthcare providers face a multitude of challenges, including burnout and stress, intricate regulations, and staffing deficits. While the complex and imperfect healthcare system plays a significant role — either as a direct cause or by exacerbating pre-existing situations — administrators of practices, hospitals, and corporate healthcare facilities have the power to rectify them. 

Unfortunately, the effects of these challenges extend beyond the provider, negatively impacting patient care. These impacts are magnified in healthcare facilities that are not physician-owned, with 60% of physicians noting a decline in patient care quality. Despite this, many continue to flock to hospitals and corporations for better access to costly resources (such as scans and labs), guaranteed income, and reduced administrative load. 

So, which option is better for health care providers? The short answer: it depends. 

Deciding between private practice and larger health systems can be challenging for new and experienced healthcare providers alike. Ultimately, the decision comes down to your preferences and circumstances. 

To gain a deeper understanding of each practice type, Tebra surveyed healthcare providers from independent practices, hospitals, and corporations. We found the following insights:

The next section will dive deeper into why healthcare practitioners have a better experience or perception of physician-owned practices.

Owning an independent practice empowers healthcare professionals with a degree of autonomy that is not found in hospitals and corporations. This autonomy significantly enhances physician satisfaction and mitigates burnout, while positively influencing the overall experience for both practitioners and patients.

In private practice settings, healthcare practitioners have the autonomy to make healthcare decisions without interference from corporate entities. This is an invaluable benefit that is not often afforded to physicians at hospitals and corporations. In fact, 83% of physicians surveyed by the National Opinion Research Center (NORC) reported experiencing a loss of control over care decisions following changes in ownership. And 72% cited a noticeable shift towards prioritizing profits over patient well-being. 

Tebra’s Physician Survey further supports how valuable autonomy is for physicians. Nearly 90% cited increased control over work conditions, work-life balance, and the ability to choose patients (61%) as the primary reasons for choosing independent practices over hospitals and corporations.

Since the onset of the COVID-19 pandemic, physician burnout has surged. It now affects 49% of physicians, 42% of whom have been struggling with burnout for over 2 years. Although Tebra’s 2023 survey identified staff shortages (27%) and high stress (25%) as leading causes of burnout for both independent practices and larger health systems, their reported levels of physician burnout were quite different. 

In larger health systems, 100% of providers admitted to feeling at least some level of burnout. However, only 38% of independent practice providers were either somewhat burnt out (23%) or not at all burnt out (15%).

While the advantages of independent practice are evident for physicians, they extend to the patient experience as well. According to Tebra's Independent Provider Playbook, 51% of patients preferred independent practice providers to health system-based providers (40%) and corporate-based providers (9%). The reason? Quality of care. 

In independent practices, patient satisfaction is 23% higher than in health systems. 66% of patients stated quality time with their doctor made them feel that they were receiving a higher quality of care. 

Despite the numerous advantages that independent practices offer, a significant portion of physicians — 74% according to Tebra's research — worked for hospitals or corporations by 2022. This begs the question: why are physicians opting for employment in these larger institutions? 

It turns out, the primary driving force behind this trend is financial. According to the American Medical Association, 80% of physicians sold their practices because they required higher rates from payers to maintain financial viability. Another 53% of physicians who transitioned from independent practice to employment cited government and private insurer reimbursement cuts as the reason for their decision. 

While financial pressures have led many independent practices to integrate with larger organizations, there are reasons for optimism. Tebra's State of Independent Practice Ownership report found that 37% of owners anticipate increased revenue, with 27% planning to expand their teams. This highlights the resilience and potential success of independent practices in a competitive market.

As the healthcare landscape shifts towards larger institutions, independent practices have an invaluable opportunity to highlight their ability to deliver top-notch, personalized care. But to preserve the autonomy required for this level of care, your practice needs to be financially viable. In this market, that means you’ll need to compete with the services and systems that larger health systems and corporate entities provide. Ready to find out how?