At least 30 physician practices and ASCs closed or announced closures in the first half of 2026, and Becker’s reported 23 physician practice closures in all of 2025.
More practices are also going bankrupt. Clinics and physician practices made up almost 30% of healthcare Chapter 11 cases with at least $10 million in liabilities in the first half of 2026, according to Gibbins Advisors. That puts them on pace for their highest annual total since 2019.
Here are the forces behind the closures:
1. Pay isn’t keeping up with costs. Medicare physician pay has dropped about 30% after inflation, and staff wages rose 4.3% in 2025, according to Medical Economics, while median base pay for healthcare staff rose 4.3% in 2025, according to SullivanCotter.
“As costs increase and income remains static, there is an inflection point where providers in small practices either take a pay cut as a sacrifice for independence, exit the workforce (such as early retirement or alternate non clinical employment) or join a larger entity,” Surinder Devgun, MD, managing partner of Rochester (N.Y.) Gastroenterology Associates, told Becker’s.
John Donovan, MD, an otolaryngologist at ENT Salem (Ore.), was more direct: “Private practices cannot sustain themselves indefinitely given these conditions.”
Some physicians have kept practices open without paying themselves. Lisa Egbert, MD, went two years without a salary before closing Paragon Women’s Center in Centerville, Ohio, in March 2025. “Eventually, it got to the point that what I was being paid was less than what I had to pay,” she said. MaineGeneral closed its eye center in Fairfield, Maine, July 31 after losing up to $1 million a year. About 70% of its patients were covered by MaineCare or Medicare.
2. The fee schedule itself. David Eagle, MD, president of the American Independent Medical Practice Association, called the Medicare physician fee schedule “just a fundamental issue”. He said the budget neutrality rules attached to it “are going to need some relief.”
3. Denials and downcoding. Outpatient hospital claim denials rose 14% from 2024 to 2025, and 41% of providers report denial rates above 10%, according to Gibbins Advisors. Dr. Eagle said insurer downcoding “puts the burden on physicians” to recover proper payment.
4. Recruitment. Downeast OB-GYN in Bangor, Maine, closed July 2 because it couldn’t recruit new physicians.
“With the recent loss of two physician partners and a midwife, I now find myself on call 24 hours a day, 7 days a week,” owner Christopher Ramset, MD, said. “As much as I wish I could continue, this level of coverage is simply not sustainable long term.”
The Urology Group in central Indiana closed June 30 when only one full-time urologist was left. Enterprise (Ala.) Women’s Center closed March 31 after running with minimal staff.
5. Scale favors big systems. Only 18% of physicians still practice in physician-owned settings, and there are 81,100 fewer independently owned practices than in 2018, according to the Physicians Advocacy Institute and Avalere Health.
“Running an independent practice has become brutally difficult,” Alvaro Andrés Macias, MD, associate professor of clinical anesthesia at University of California San Diego, told Becker’s. “Insurance billing complexity, low reimbursements, electronic records mandates, regulatory requirements, staffing challenges — all of it favors scale. Young physicians graduate with $200,000+ in debt and often prefer a predictable salary over entrepreneurial risk. Large organizations negotiate better rates with insurers and spread administrative costs across more providers. It is a continuous loop that, for now, cannot be broken.”
Center for Specialty Care, a Fairmont, Minn., orthopedic practice that once employed 130 people, closed after 36 years. It cited the cumulative effects of the ACA, COVID-19 and growing local healthcare consolidation.
6. Policy pressure ahead. The One Big Beautiful Bill Act’s Medicaid cuts and upcoming work requirements are expected to hit safety-net practices hardest. Medicaid work requirements under the One Big Beautiful Bill Act can begin as early as January 2027.
“These beneficiaries are not going anywhere,” Medical Group Management Association leadership said. “Only now, under OBBBA, medical groups and hospitals will be left picking up the enormous tab.”
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
