How capital costs make it near-impossible to be an independent physician

Why, and how to fix it

About a month ago, I published a newsletter about the capital constraints on independent physicians:

It has become harder and harder to exist as an independent physician. The software and technology burden is high, the administrative burden is high, independent physicians have to do more work to get their claims reimbursed, and they’re paid less for those claims because they have less negotiating power.

We’ve constructed a system that encourages physicians to consolidate on the promise of efficiencies — but those efficiencies rarely materialize. Instead, study after study has shown that physicians are happier and provide better, lower cost care when they’re independent.

Out of practice

I also wrote that I was finishing a report on the cost of capital for independent physicians. I’m happy to share that it’s finally out.

You can find the executive summary here, and the full paper here.

From the introduction:

The once-common independent physician is increasingly rare. Consolidation driven by large hospital systems, insurance conglomerates, and private equity has systematically squeezed out the small practices that until very recently formed the backbone of American health care. The results are higher costs and worsened access for patients, while doctors are burning out under corporate medicine’s thumb.

Washington has had every opportunity to reverse the decline of the independent physician practice. Instead, it accelerated it. In 2025, the One Big Beautiful Bill Act delivered the killing blow to untold numbers of physician practices that were on the precipice, cutting crucial Medicare and Medicaid funding.

Independent physicians desperately need access to affordable capital to keep their practices afloat. But the loss of community banks to consolidation has made that difficult to obtain — even as health care conglomerates are increasingly operating as their own banks, offering predatory and unsustainable loans and vacuuming up the practices that are unable to stay afloat. Independent practices are better for patients and providers, and they serve as a bastion of lower-cost, higher-quality care, especially compared to monopolized Big Medicine. Independent practices should be allowed to flourish.

To achieve this, Congress must pursue two broad and related goals: making it easier for independent practices to access affordable capital, and righting the policies that favor corporate medicine and leave independent practices financially worse off. This includes increasing access to community banks and favorable loan terms, structurally separating vertically consolidated health care conglomerates that use their increased negotiating power to demand higher rates, and standardizing health care reimbursement rates while capping price growth.

In sum: independent physicians are beneficial to patients and the medical system alike, and those who want to practice independently shouldn’t be kept from it for want of affordable capital. Fixing the healthcare system requires righting the incentives that have led us here.