With National Small Business Week here, it’s the perfect time to celebrate the various forms that small businesses take in our communities. It’s also an important moment in time to recognize the challenges they face in driving growth, particularly in the healthcare space, as the industry faces continued changes.
Independent physicians and clinical staff who run smaller practices face many similar challenges to those of retail business owners – they, too, are navigating and managing overhead costs, revenue management, and client retention. On top of these realities, fewer physicians are starting or joining independent practices – despite patients expressing a preference for visiting independent providers.
Small- to mid-sized businesses and health practices are strong contributors to local and national economic growth, and as larger health systems continue to expand their reach, it’s important to ensure that independent practices remain successful.[i]
Let’s examine the factors impacting their success – and the solutions that independent practices can consider leveraging to help stay competitive in this shifting marketplace.
Patients Prefer Independently Owned Practices – But Numbers Are Dwindling
Concerningly, over the past decade, we’ve seen a decline in the number of small- and mid-sized medical practices nationwide. This can be attributed to the number of physicians moving away from small practices to transition to larger health systems. According to the American Medical Association (AMA), the number of physicians working in small practices (defined as a staff of 10 or fewer providers) decreased from 61.4% in 2012 to 51.88% in 2022. In contrast, the number of physicians in large practices and hospitals (defined as 50 physicians or more), increased from 41.8% to 49.7% over the same period.[ii]
This is the opposite of what patients want. In fact, patients have reported a stronger preference for the personal relationships and individualized care that smaller, independently owned practices can offer.[iii]
Going deeper, a survey found that while most U.S. patients are not necessarily swayed by practice ownership, of the respondents who reported having a preference, the majority preferred smaller, independent private practices.[iv] These patients pointed to a proclivity for stronger patient-doctor relationships, as 78% reported that they have a more personal relationship with their provider, and 60% said that there is a stronger sense of trust among their care team. Further, 57% of patients reported that their independent primary care doctors provided overall higher quality care.[v]
But as I mentioned, it’s been an uphill battle for independent providers, who have faced various business challenges over the past decade. Data shows that due to economic, administrative and regulatory burdens such as rising practice costs, staff management, and patient retainment, physicians are now more inclined to work at larger, corporate practices over smaller, independent health sites.[vi]
For larger, corporate health systems, 66% of patients reported that they could schedule appointments faster, 51% said that doctors responded quicker, and 42% shared that the medical exams themselves were more time efficient.[vii] These numbers highlighted some factors patients consider when choosing where to seek care and may directly impact a practice’s patient retention rate, as patients look for the most convenient option.
How Third-Party Financing Solutions Can Help
To help independent providers keep up with patient demands and industry trends, it’s crucial that practices are equipped with seamlessly integrated financial tools that most effectively meet their business needs. Third-party financing solutions can help smaller practices thrive:
- Manage Practice Finances: By leveraging third-party financers, providers can stay on top of their accounts receivable more easily by ensuring that providers receive payment for outstanding balances faster. Further, these tools help to decrease revenue cycle delays caused by any missed patient payments or lagging insurance reimbursements. These financing partners also give patients the opportunity to pay off their out-of-pocket healthcare expenses over time, meaning they can seek and receive care without worrying about upfront costs.
- Harness Underwriting Tools: Partners like Synchrony also provide advanced underwriting capabilities, which means smaller businesses can reach larger patient cohorts. Capabilities like this give providers a more holistic view of a customer’s creditworthiness so that more people are given the opportunity to build their credit health, all while maintaining their overall health.
- Build Patient Relationships: Last but certainly not least, less time devoted to administrative tasks allows providers to focus more on developing the close patient relationships that are integral to small and mid-sized practices, further building patient loyalty and retention.
As the healthcare industry continues to evolve and corporate health systems shift and grow, it’s now more important than ever for small practices to focus on financial and business management. These tools will help to uplevel small business’ care capabilities and offerings to further advance the core mission to deliver personalized, quality patient care.
By Fan Montgomery, SVP and Strategy leader of Health & Wellness, Synchrony.
Photo by National Cancer Institute on Unsplash
[i] National Small Business Week. U.S. Small Business Administration. (n.d.). https://www.sba.gov/national-small-business-week.
[ii] “AMA examines decade of change in physician practice ownership and organization.” American Medical Association, 12 July 2023, https://www.ama-assn.org/press-center/ama-press-releases/ama-examines-decade-change-physician-practice-ownership-and. Accessed 29 April 2025.
[iii] Morris, Lisa. “Patients Want Fast Care from Corporate Practices, but Trust Independent Practices More.” Software Advice, 22 Aug. 2023, https://www.softwareadvice.com/resources/independent-corporate-healthcare/. Accessed 29 April 2025.
[iv] Morris, Lisa. “Patients Want Fast Care from Corporate Practices, but Trust Independent Practices More.” Software Advice, 22 Aug. 2023, https://www.softwareadvice.com/resources/independent-corporate-healthcare/. Accessed 29 April 2025.
[v] Morris, Lisa. “Patients Want Fast Care from Corporate Practices, but Trust Independent Practices More.” Software Advice, 22 Aug. 2023, https://www.softwareadvice.com/resources/independent-corporate-healthcare/. Accessed 29 April 2025.
[vi] “AMA examines decade of change in physician practice ownership and organization.” American Medical Association, 12 July 2023, https://www.ama-assn.org/press-center/ama-press-releases/ama-examines-decade-change-physician-practice-ownership-and. Accessed 29 April 2025.
[vii] Morris, Lisa. “Patients Want Fast Care from Corporate Practices, but Trust Independent Practices More.” Software Advice, 22 Aug. 2023, https://www.softwareadvice.com/resources/independent-corporate-healthcare/. Accessed 29 April 2025.
