Partnerships with management services organizations have become an increasingly common business strategy for physician practices struggling against a rising tide of corporate consolidation efforts and soaring operational costs.
According to the American Medical Association’s “Physician Practice Benchmark Report,” published in May 2025, private practice now represents less than half of physicians in most medical specialties, with participation ranging from 30.7% in cardiology to 46.9% in radiology.
Conversely, the share of physicians working in hospital-owned practices rose to 34.5% in 2024 — an 11-percentage point increase from 23.4% in 2012.
According to the AMA, the top reasons that physicians decided to sell their practices included a lack of negotiation power over payer contracts, the cost of necessary resources and managing administrative requirements.
Surinder Devgun, MD, managing partner for Rochester (N.Y.) Gastroenterology Associates, recently joined Becker’s to discuss his practice’s recent MSO affiliation and how it may benefit organizations similar to his.
Editor’s note: This response has been edited for clarity and length.
Question: What would you say to a leader at a smaller, private practice evaluating an MSO affiliation for the first time?
Dr. Surinder Devgun: These are very practice- and environment-dependent decisions. These are particularly effective platforms when you have smaller practices, or if you have a very fractured market where you need to align yourself somehow. And we were sort of in the latter boat. [We’re in] a small town, and there’s lots of players in town and, you know, just to seek some form of alignment that would give us some structure and growth over time. You have to look at your own situation. So, for example, if you have a mega group and you’re a dominant player in town, this may not be the right fit for you. But you know you’re seeking outside help, this is a way to transition over and transition over a lot of the liability that comes with owning a practice and finance. And personal liability, which we all sign for whenever we have any transaction worth any financial salt, we have to sign away personal guarantees and so on, so forth. Those are things that can mitigate some of that risk that you face with us with really a fixed we’re dealing with a fixed-income market. There’s a fixed-price market, and we don’t have leverage to increase prices when delivery costs go high and the supply companies increase their pricing because of the fuel costs.
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