Primary Care Is in Trouble. So Doctors Band Together To Boost Their Market Power.

Western Massachusetts, a patchwork of rural communities and low-income towns, is a difficult place to find a primary care doctor if you don’t already have one. Frustrated patients often turn to online forums to ask for leads or advice on how to find a practice that accepts new patients.

One name comes up repeatedly in these discussions: Valley Medical Group.

With four locations in the Connecticut River Valley, the practice has been a mainstay of family medicine since the 1990s. Valley Medical’s flagship office in Florence is right on Main Street, next to a pizza restaurant and near a Friendly’s.

Valley has 90 medical providers – including physicians, nurse practitioners and physician assistants – as well as on-site labs, x-ray and vision care. With tens of thousands of patients, it has become one of the largest independent practices in Western Massachusetts.

It is a key part of the region’s health care infrastructure, but Valley Medical has rarely been under as much pressure as it is today. In January, the firm laid off 40 employees, or 10% of its 400-person workforce, primarily in support roles.

Despite patient demand — there are waiting lists to be seen — primary care providers take on more clinical responsibilities and for lower pay than most specialist doctors, said the group’s CEO, primary care physician Paul Carlan. Prices are specified in the group’s contracts with insurers.

“This is because our contracts are not paying as well as we think,” Carlan said. “The cost of everything is increasing. »

Valley Medical Group is far from alone in this difficult situation. Thousands of primary care practices, a key gateway to the medical system, are fighting to remain financially viable and independent.

In response, many are banding together to form independent physician associations, or IPAs. The goal is to increase their market power, change how they are paid, and maintain control over how they treat patients.

Threats to physician autonomy

Primary care practices in the United States are in deep trouble, according to workforce surveys. The American Association of Medical Colleges estimates a shortfall of up to 86,000 primary care physicians by 2036, as more primary care physicians retire and fewer doctors enter the field.

The number of people who can’t find a primary care doctor has increased by 20% over the past decade, according to a recent JAMA Internal Medicine report.

Lower relative salaries and higher job stress are deterrents when medical students consider a career in primary care. New doctors can earn more in specialties such as cardiology or surgery.

Financial strains in the U.S. healthcare sector, exacerbated by the covid pandemic, have led to the closure of many primary care practices, according to the AAMC.

The Massachusetts Health Policy Commission released a report in 2025 attributing the crisis in part to relatively low insurance reimbursement rates for primary care. Primary care’s revenue problem is expected to worsen when Republican-backed Medicaid cuts begin to take effect later this year.

In search of financial security, many primary care practices have merged with large hospital systems, with physicians becoming employees of those systems.

But doctors at Valley Medical Group were determined to avoid that fate. Joining a health system takes away from doctors the autonomy they need to make the best clinical decisions for their patients, Carlan said. It also diverts revenue from the hospital system as a whole.

“Our priorities are confused,” he said. “And I think when you’re part of a health system, you’re constantly asked to bend to the needs of the organization. Hospitals get paid when their beds are full.”

In contrast, primary care providers need time and money to manage or prevent illness, Carlan said, and their insurance reimbursement rates should reflect that.

In December, Valley Medical Group announced plans to join an independent physician association. Like a union, an IPA groups together individual primary care offices, giving them power in numbers when negotiating contracts with Medicaid, Medicare and private insurance companies.

“It’s a time of transition,” said Lisa Bielamowicz, clinical director of TrustWorks Collective, an independent health care consulting firm that works with health systems and physician groups.

APNs are gaining momentum as older doctors retire, especially after the difficult years of the Covid pandemic, Bielamowicz said. “As baby boomers move away and younger doctors take on leadership roles, these types of role models become more attractive. »

The American Academy of Family Physicians, a professional group, hears from practice owners who joined hospital systems but now want to break away and become a smaller practice again.

“So if independent APIs can create the infrastructural support needed to make independent practice viable, then that’s a good thing,” said Karen Johnson, vice president of the AAFP.

IPAs can provide more leverage when negotiating rates with insurance companies. Some insurers say they enjoy working with these partnerships because they help stabilize primary care practices, maintaining access and options for insured patients.

Alternatively, some doctors are changing their business model to “direct primary care,” which bypasses insurance altogether.

“We’re looking at independent practices that are not supported by … these large health systems and that can support community members in the way they want to be supported,” said Lisa Glenn, vice president of Blue Cross Blue Shield of Massachusetts.

A different payment model

When these independent firms come together, Glenn said, Blue Cross can offer “value-based” contracts. Instead of receiving payment for each visit or procedure, the medical practice receives a budgeted amount for each patient’s care, which incentivizes them to stay healthy so they need fewer treatments.

Medical providers “are making different choices than they would if they were getting paid for every procedure, every visit, every widget,” said TrustWorks’ Bielamowicz.

If there is money left at the end of the year, it is shared between the firm and the insurer.

The problem, Glenn said, is that a value-based contract only works if there is a large enough patient pool to spread the risk, in case some get really sick. Otherwise, she said, “the risk of ending up over or under budget becomes somewhat subject to random variation rather than performance.”

Value-based contracting was supposed to be the next big thing when the Affordable Care Act passed in 2010, an innovative way to reduce costs for the health care system as a whole.

But it took them a while to understand; the traditional fee-for-service model was too entrenched. Experts say this could still change if enough primary care providers worked together to build market power through APIs.

“If we save people from going to emergency rooms and unnecessary hospitalizations, we save money for the system,” said Chris Kryder, CEO of Arches Medical IPA in Cambridge, Mass., the IPA specializing in value-based contracts that Valley Medical has signed up to. “And we create more revenue for PCPs [primary care providers]which is desperately needed.

These contracts also allow for greater flexibility in staffing, Kryder said, because nurses, physical therapists and physician assistants can take on some of the less complex medical tasks, saving the practice money.

IPAs can help, depending on who is in charge

But APIs are not a panacea for primary care’s problems, according to some health care executives.

There are hundreds of APNs, but not all offer the independence and autonomy that many doctors dream of. Some APIs are actually owned by hospital systems, or even private equity firms, and they are less focused on preventive care.

The American Academy of Family Physicians advises its members to seek out APNs with “integrity,” who give doctors a significant role in decision-making.

“Who decides, who makes the decisions, and is it truly focused on the best interest and long-term benefit of practicing physicians and their patients? » asked Johnson of the AAFP.

Arches Medical is 100% physician-owned and focuses specifically on primary care, Kryder said. But to be more effective, Arches needs to recruit more firms that want value-based contracts.

That can be a tough sell, said Glenn, of the Blue Cross. Under this payment model, physicians could see a lag of more than a year between when they provide care and when they realize savings.

“It doesn’t happen overnight and it requires investment,” she said.

That disconnect is one of the reasons Valley Medical Group had to lay off staff after joining Arches IPA, CEO Carlan said. But he is confident that after a while the practice will become more financially stable, be able to offer higher salaries and, most importantly, keep doctors in charge.

This article comes from a partnership with New England Public Media And NPR.