2026 Trends: The Future of Independent Practice and What It Means for Brokers
The doctor employment model is shifting. After years of consolidation that has pushed doctors into hospital systems, independent practice is showing renewed viability. Doctors are increasingly choosing or returning to independence—and they need brokers who understand this evolving landscape.
For brokers selling disability insurance and ancillary benefits, this shift creates significant opportunities. Independent doctors face different risks, have more complex income structures, and require specialized coverage that typical group long-term disability (LTD) policies don’t address. Understanding these seven key trends will position you as a trusted advisor to this growing market in 2026 and beyond.
1. Payment Reform Creates New Opportunities for Independent Practice
Site-neutral payment reforms continue to narrow the reimbursement gap between hospital-owned and independent clinics. In November 2025, CMS finalized site-neutral payment policies for drug administration services at off-campus hospital outpatient departments, reducing payments by 60% beginning in 2026. CMS also finalized the elimination of the inpatient-only list over a three-year period starting in 2026.¹
Changes to the Stark Law and Anti-Kickback Statute regulations in 2020-2021 created new exceptions for value-based arrangements and doctor-led coordination models.² Commercial payers continue expanding value-based and episode-based contracts tailored for smaller practices.
What this means for brokers: As payment disparities narrow, more doctors may consider or return to independent practice. They’ll need to rebuild their benefits packages—including disability insurance—outside the hospital system. Doctors who spent years under hospital benefits may not realize their coverage gaps until they’re independent again.
2. Innovative Practice Models Redefine Independence
Doctors are building micro-practices, direct specialty care models, membership-based primary care, and virtual-first hybrids. Tech-enabled MSO and back-office platforms reduce administrative burdens without sacrificing ownership. A 2024 analysis found that Medicare expenditures for beneficiaries under the care of physicians who adopted the MSO model dropped by nearly $1,000 per beneficiary in the 12 months following the transition from private practice.³
Facility-light care options—ambulatory surgery centers (ASCs), office-based labs (OBLs), mobile diagnostics—help practices capture revenue streams outside hospital systems. These models prove doctors can maintain independence without shouldering overwhelming administrative complexity.
Broker Tip: Doctors in innovative practice models often have complex income structures combining salary, production-based compensation, and ownership distributions. Ask: “How does your current disability coverage account for all your income sources?” Most traditional group LTD policies only cover base salary—leaving significant gaps for doctors with diversified earnings.
3. Hospital Employment Burnout Remains High, Driving Interest in Independence
Overall, physician burnout has declined from its pandemic peak of 62.8% in 2021 to 43.2% in 2024.⁴ However, burnout remains significantly higher among physicians than other U.S. workers. Independent practice physicians consistently report lower burnout rates and higher job satisfaction compared to hospital-employed physicians.⁵
Research found that 42% of hospital system employees were considering switching to private practice, primarily motivated by their desire for better work-life balance. Independent practice physicians rank burnout (39%) lower in their concerns than insurance difficulties (46%), rising healthcare costs (46%), and competition from larger organizations (44%).⁶
What this means for brokers: Doctors leaving hospital systems often carry misconceptions about disability insurance. They may believe their individual disability policy purchased early in their career provides adequate coverage. However, as incomes rise—especially with ownership stakes—that early policy rarely covers their current financial needs. Doctors transitioning to independence are ideal candidates for supplemental group LTD that addresses their evolved income and risk profile.
Broker Tip: When speaking with doctors who recently left hospital employment, ask about their current coverage. Phrase it this way: “Your income has likely grown significantly since you purchased your individual disability policy. Have you reviewed whether your coverage kept pace with your earnings?” This opens conversations about coverage gaps without implying they made a mistake.
4. Consolidation Continues—But Doctor-Controlled Alternatives Emerge
Hospital acquisitions continue, and private equity acquisitions of physician practices increased substantially from 816 practices across 119 metropolitan areas in 2012 to 5,779 practices across 307 metropolitan areas in 2021.⁷ However, private equity activity now faces increased regulatory scrutiny. In 2025, at least seven states (California, Indiana, Massachusetts, Maine, New Mexico, Oregon, and Washington) enacted new laws requiring more oversight over private equity acquisitions in healthcare.⁸
In response to consolidation pressures, doctor-owned super-groups and independent MSO structures are emerging as strong alternatives. Specialty-driven networks help independents compete on contracting, purchasing power, and technology. Rather than selling to hospitals or private equity, doctors now have viable alternatives that preserve ownership while gaining advantages of scale.
What this means for brokers: Doctor-owned groups represent significant opportunities. These groups need comprehensive benefits packages to attract and retain talent—competing directly with hospital systems. Group disability insurance becomes a competitive advantage, not just a compliance checkbox. Position yourself as the broker who understands doctor-specific needs rather than treating them like any other professional group.
5. Site-of-Care Economics Strongly Favor Independent Practices
The cost difference is substantial and well-documented. A 2023 Harvard study published in JAMA found that physician services delivered within health systems cost between 12% and 26% more compared with independent practices, while system-based hospital services cost 31% more on average than care delivered by independent hospitals.⁹
ASC procedures deliver significant cost savings. Research shows ASCs can offer surgical procedures at rates 35% to 50% lower than hospitals.¹⁰ A 2024 study of sports medicine procedures found that procedures performed at ASCs showed a 42% reduction in total costs compared to hospital outpatient departments.¹¹ Hospital facility fees can run significantly higher for identical procedures—Medicare data shows facility fees at hospital outpatient departments are often 80% to over 2× higher than independent practice settings, with no meaningful quality differences.¹²
As payers push site-neutral payments, independent practices and doctor-owned ASCs gain a competitive edge. Lower costs without sacrificing quality make these settings attractive to payers and patients alike.
Broker Tip: When working with doctor groups that own ASCs or OBLs, emphasize disability insurance that recognizes their facility ownership income. Many group LTD carriers reduce benefits when a disabled doctor continues receiving ownership distributions—even though the doctor can’t work. MGIS’s Disability Guard for Doctors™ uses lagged income provisions that differentiate between active earnings and passive ownership income, ensuring doctors receive appropriate benefits during disability.
6. Payers Increasingly Partner With Independent Practices
Payers see independent practices as lower-cost, high-quality partners. Narrow networks add independent specialists to reduce premiums and improve access. Growth in independent ACOs, IPAs, and specialty contracting collaboratives opens new revenue channels for independent doctors.
This represents a strategic shift in payer strategy—from defaulting to hospital networks to actively seeking independent alternatives as a cost-containment measure.
What this means for brokers: Doctors who secure favorable payer contracts often face a new challenge: scaling their practice to meet demand. This growth requires hiring more doctors or advanced practice clinicians (APCs), expanding facilities, and extending hours. With growth comes increased financial obligations—and greater need for income protection. Doctors building successful independent practices need disability insurance that scales with their success.
7. Advanced Practice Clinicians Power Practice Growth
Advanced practice clinicians (NPs, PAs, PMHNPs, etc.) enable independents to expand access without increasing doctor headcount. Modernized supervision laws and payer credentialing shifts enable more flexible team-based care models.
APCs help practices extend hours, add service lines (behavioral health, chronic care, women’s health, telehealth), absorb demand growth, reduce doctor burnout, and compete effectively with large systems on responsiveness and patient experience.
Broker Tip: As practices add APCs, they face new benefits challenges. Some doctors overlook disability coverage for their APC team members, focusing primarily on doctor benefits. However, comprehensive disability insurance for the entire clinical team demonstrates commitment to employee well-being—a powerful recruitment and retention tool. When discussing benefits strategy with doctor groups, always ask: “How are you protecting your APCs’ income alongside your doctors?”
The Broker Opportunity: Specialized Solutions for Independent Doctors
These trends converge on one reality: independent practice remains viable and is showing renewed strength. Doctors are choosing ownership, building innovative models, and competing successfully against consolidated health systems.
But independent doctors face unique challenges that standard group LTD policies don’t address:
• Complex income structures combining salary, production bonuses, and ownership distributions
• Higher-than-average income requiring substantial coverage limits
• Specialty-specific definitions of disability tied to actual procedures performed
• Physical and mental demands that create unique disability risks
• Financial obligations from practice ownership, student loans, and lifestyle expenses
Standard group LTD policies often fall short. They may cover only base salary, include restrictive contract language that limits mental health or self-reported condition claims, require mandatory rehabilitation, or reduce benefits when a disabled doctor receives ownership income.
MGIS designed Disability Guard for Doctors™ specifically for these challenges. This specialized group LTD policy combines the best coverage features of individual disability insurance with the cost and underwriting advantages of group insurance. Key features include:
• CPT code-based definition of disability that considers the actual procedures each doctor performs
• Lagged income provisions that don’t penalize doctors for ownership distributions during disability
• No self-reported symptom limitations for conditions like carpal tunnel, chronic fatigue, or migraines
• Per-occurrence mental health and substance abuse provisions rather than lifetime limits
• Optional riders for retirement plan contributions during disability
For brokers working with independent doctor practices—whether micro-practices, doctor-owned groups, or specialty networks—Disability Guard for Doctors™ addresses the coverage gaps that standard policies leave open.
Position Yourself for Independent Practice Growth
Independent practice shows renewed viability as payment reforms level the playing field and innovative models prove successful. As consolidation faces increased scrutiny and doctors seek greater autonomy, more will choose this path.
Brokers who understand these trends and offer specialized solutions will win this market. Don’t approach independent doctors with the same products you’d offer any professional services firm. Recognize their unique risks, income structures, and coverage needs.
The data confirms independent practice remains a significant and growing segment of the healthcare market. The question is whether you’ll be the broker these independent doctors trust to protect their financial security.
SOURCES:
1. Centers for Medicare & Medicaid Services. “Calendar Year 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule.” November 2025.
2. U.S. Department of Health and Human Services. “Regulatory Sprint to Coordinated Care: Final Rules.” November 2020.
3. Medical Economics. “Private practice is dying. Here’s how to save it.” November 2025. (Study reference: MSO model reducing Medicare expenditures by nearly $1,000 per beneficiary)
4. American Medical Association. “U.S. physician burnout hits lowest rate since COVID-19.” Based on AMA Organizational Biopsy data from nearly 18,000 physicians across 43 states in 2024.
5. Tebra. “Physician burnout by specialty 2024: Navigating stress in the healthcare industry.” February 2025. (Reporting on 2023 research findings)
6. Ibid.
7. Health Affairs. “Private Equity–Acquired Physician Practices And Market Penetration Increased Substantially, 2012–21.” March 2024.
8. Stateline. “New state laws tackle private equity’s growing role in health care.” November 2025.
9. Harvard Catalyst/JAMA. “Health system hospitals, physicians deliver ‘marginally’ better care at higher cost than independent peers.” January 2023.
10. Bain & Company. “Ambulatory Surgery Center Growth Accelerates: Is Medtech Ready?” (ASCs offering procedures at 35-50% lower rates than hospitals)
11. PMC (PubMed Central). “Cost Comparison of Sports Medicine Procedures in Ambulatory Surgery Centers Versus Hospital Outpatient Departments for Medicare Recipients.” 2024.
12. Medical Economics. “Hospital facility fees: Why cost may give independent physicians an edge.” (Citing Medicare Payment Advisory Commission data on facility fee differentials)
